Hobart is targeting a bond to avoid a potential tax disaster

HOBART — The city is preparing for a property tax refund to Southlake Mall.

The city council took interim action Wednesday to approve a general commitment statement not exceeding $5.8 million.

“The reason we’re doing this today … relates to the possibility that the mall’s tax refund will be withheld from the city’s tax distribution in December,” Bond adviser Randy Rompola said Wednesday. “If that were to happen at the proposed level, it would be catastrophic for the city.”

Rompola said the Hobart Redevelopment Commission is following a similar bond issue that is before the council.

The bonds are in response to separate cases in which Indiana courts ruled to reset the mall’s ratings for tax years 2011 through 2016 to their 2010 rating.

City leaders have estimated Hobart could suffer $9 million in financial damage if the mall is given a property tax refund.

People also read…

  • Pot grower, explosive devices and guns found in Porter County home, police say
  • JERRY DAVICH: 5-year-old boy with ‘Childhood Alzheimer’s’ doesn’t know he’s sick: ‘All he knows is he’s happy’
  • Whiting man seriously injured in tree fall while hunting deer
  • A Jasper County man dies after falling into a manure lagoon on a dairy farm, the sheriff says
  • Merrillville shooting injures one, damages vehicles and buildings, police say
  • Winfield father charged with neglect after infant suffers brain injury
  • Lake County man guilty of illegally dumping more than a ton of catfish into Illinois lake
  • Sister pleads guilty to 10-year-old brother’s painful death
  • Porter County man joins wife behind bars after potted plants, explosives and guns found in home, cops say
  • Portillo is planning the grand opening Tuesday in Schererville
  • Man pleads guilty to double homicide near Hammond Bar
  • Bank teller admits she teamed up with man to steal $190,000
  • The state can seize all property of Indiana local governments, court judgments
  • Notre Dame recruit Drayk Bowen runs for 358 yards and 5 TDs to lead Andrean back to state
  • The trial begins Monday for 2 defendants in connection with murder outside the bar

If the city decides to issue bonds, they would be bought by the Indiana Bond Bank, Rompola said.

The bonds would provide a financing mechanism whereby Hobart could be reimbursed for past expenses and provide working capital at the end of the year.

“So if the tax distribution is withheld by the county auditor to pay the tax refund, then the city would have cash going forward,” Rompola said.

He said the maximum rate on 10-year bonds would be 6%, but the rate is expected to be around 4%.

The bonds require a public hearing that could take place during the December 7 city council meeting. The board may consider adopting the bond regulations at this meeting.

Though Hobart is continuing to pursue bond issuance, Rompola said Hobart is exploring other potential funding options if the December tax refund is withheld.

“Think of [the bonds] as a failover in case it becomes necessary,” he said.

Source