EAST CHICAGO | Another piece in the foundation for reconstruction of the Cline Avenue Bridge received preliminary approval Monday night from the City Council.
The council created an economic revitalization area composed of the 48.6 acres beneath the existing span, paving the way for incentives developers have sought to rebuild the former state highway, Ind. 912, as a toll road.
Indiana transportation officials declined to provide a local match for federal funding to replace the span over the Indiana Harbor and Ship Canal after it was closed by the state for safety reasons in 2009.
That refusal created the opening for a private group, which wants to build and manage the 1.25-mile stretch between Riley Road and Indiana Harbor Drive, and charge a fee to drivers using the extension.
In return for its estimated investment of $150 million to $250 million to rebuild the bridge, United Bridge Partners has asked East Chicago for 10 years of tax abatement and 25 years of financial leverage through creation of a tax increment financing district beneath the overpass.
The TIF district would capture 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.
According to the development plan, the city would receive 10 cents from every toll charged, estimated at about $2, though a final figure would be based on construction costs.
The TIF district is expected to be created by the East Chicago Redevelopment Commission later this month through the designation of the property as a so-called allocation area.
The revitalization proposal then will be brought back before the City Council for a public hearing, possibly as soon as June 25, prior to a council vote for final confirmation.
"There will be more details like this," council attorney Stephen Bower said.
As a state highway, Cline Avenue generates no property taxes, said Karl Cender, financial adviser for the City Council. As private property, however, it will increase the city's assessed valuation, though with an abatement of tax collection for the first 10 years.
Project timelines call for completion of the new overpass by the end of 2014.