A decade ago, a gently rolling patch of land just north of the Porter County Municipal Airport and east of Ind. 49 was all corn and soybeans.

Today, those 180 acres are known as Eastport Centre and provide a home to such industry-leading companies as J and N Enterprises, Ivy Tech Community College and a host of other companies and nonprofit groups.

Local officials tally hundreds of jobs within the Washington Southeast Tax Increment Financing District, of which Eastport comprises the largest part.

Eastport could not have been developed without TIF financing, one of the few economic development tools available to local communities in Indiana, according to Stuart Summers, director of Valparaiso's economic development corporation.

"It's popular because it's still working," Summers said. "And Valparaiso is popular because it's a go-and-grow community."

A fresh look at TIFs

Local developers point to a long list of projects that would not have happened in Northwest Indiana without local tax increment financing or tax abatements. Those include the Cabela's outdoor outfitters in Hammond; Bass Pro Shops, in Portage; and Pratt Industries in Valparaiso.

But Indiana's property tax crisis is prompting a fresh look at TIFs, which critics say siphon away tax dollars from general revenues. The Indiana General Assembly is expected to consider legislation reforming TIF and tax abatement practices in its upcoming session.

Developers and business owners also are discussing the issue. They say they are well aware of the problems TIF can create for school districts and other taxing bodies.

Chester Inc., a design/build firm that has built numerous office and industrial buildings at Eastport, has seen close-up the good that TIFs and abatements can do, according to CEO Pete Peuquet.

But he believes Valparaiso may want to mimic Portage and start collecting fees from developers within TIF districts when a parcel is sold. When sewer and water service is brought into a TIF area, businesses also could pay a fee.

That would lessen the need for TIF and abatements and could resolve some of the conflicts with school districts, Peuquet said.

Peuquet is not against TIFs or abatements, having won a $1 million abatement four years ago for the new Chester headquarters building at Eastport.

A new way to finance

In Lake County, Precision Construction Inc., of Highland, has been one of the region's most aggressive real estate developers. Many of the newer stores along U.S. 41 are there because of Precision's efforts. It also is one of the regions' premier home builders.

But despite undertaking hundreds of millions of dollars in development, it never has used TIF financing until now, according to Robert Super, Precision's principal partner for real estate development.

The company recently was granted a TIF for its planned Oak Street Commons lifestyle center in Schererville. It also been lobbying since 2005 for legislation to establish the use of sales tax increment financing in Indiana.

One only has to look to Illinois, which has tax increment financing, to see the good it can do, Super said. He estimates at least 20 retail projects have been initiated there using TIF sales tax financing since Precision first proposed the idea for Indiana.

"You don't want to throw these things around like candy," Super said. "You only use them when they make sense for all parties involved."

A taxing situation

Summers and other economic development officials point out that although TIFs eliminate 100 percent of any increased property taxes on a piece of property and real estate, they do not eliminate taxes period.

The property continues to be taxed on its original assessed value before improvements. Also, and probably more importantly, Indiana taxes personal property. In the case of the recently established Memorial Hospital TIF in Valparaiso, $20 million to $30 million in personal property such as hospital equipment will be taxable, Summers said.

Portage has used TIFs and abatements to benefit both outlying areas and its downtown, according to Chris Stidham, executive director of the city's Economic Development Corp.

TIF was instrumental in the establishment of Ameriplex at the Port, an industrial park just north if Interstate 94, a decade ago. A $17.5 million TIF package there was instrumental in landing Bass Pro Shops last year.

"Those big fish, they require it," Stidham said. "Only because of the competitive nature of their coming into any area."

Now, some of the TIF money generated yearly at the Ameriplex will be used to pay for construction of a $15 million building for Ivy Tech Community College downtown on Central Avenue.

The college will be a linchpin for downtown development, Stidham said.

A TIF boom

Valparaiso is going through a veritable TIF boom, with the City Council recently establishing TIF districts for South Bend Memorial Hospital, Cumberland Crossing (former County Seat Plaza) and East Lincolnway, directly north of Valparaiso University and Porter hospital.

Valparaiso's Redevelopment Commission expects to spend $16 million on projects this year alone and $50 million through 2010, according to Summers. That money is raised mainly in lieu of tax payments in the TIF districts.

Summers said there are some changes in state TIF legislation he would not take issue with, such as shortening the authorized bonding period for TIF projects. But any wholesale changes that eliminate a large portion of the benefit to businesses would be mistake.

"At some point in time you have to have faith in local elected officials, who are looking out for the community as a whole," Summers said. "We don't need Indianapolis telling us what to do."