EAST CHICAGO | Reconstruction of the closed Cline Avenue Bridge as a toll road can now proceed after the City Council on Monday night approved a package of financial incentives sought by private developers.
Florida-based Cline Avenue Bridge LLC offered the city an investment of between $150 and $250 million to rebuild 1.25 miles of the former state highway over the Indiana Harbor Ship Canal between Riley Road and Indiana Harbor Drive.
The overpass, which once carried more than 35,000 vehicles per day, was closed by Indiana highway officials in 2009 due to safety concerns, with no money to restore the span forthcoming from the state.
Developers proposed giving the city 10 cents from each toll collected, and in return asked for 10 years of tax abatement on the new private property and 25 years of financial leverage through creation of a so-called economic revitalization area and related tax increment financing district.
The TIF district allows for the capture of growing property tax revenue as the land's assessed valuation increases due to the investment, and would be used by the developer to leverage construction bonds for the project.
"It comes down to your desire to have the bridge rebuilt," said Karl Cender, the council's financial adviser. "The company has made it pretty clear that if we didn't do this, they wouldn't do the project."
The city's Redevelopment Commission approved designating the economic development area last month, a decision upheld by the city's Plan Commission Monday afternoon.
"How fiscally responsible is this?" asked Councilman Juda Parks, D-at large.
The city, its schools and libraries aren't losing any tax revenue through the abatement, said council attorney Stephen Bower, since as state-owned property the land under the overpass has never generated any taxes.
"And, depending on traffic, the project could bring in revenue of between one-half and one million dollars per year," Bower said.
Parks and Myrna Maldonado, D-at large, voted against the tax abatement, but joined their council colleagues in unanimously approving the economic revitalization area and the use of TIF money by developers for the project.
Current project timelines call for completing the new overpass by the end of 2014.