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Use of former CRED funds for downtown Tech Center approved by city council

By Lucas González

Posted April 13, 2023

(From left) Bloomington City Council member Stephen Volan, Director of Economic Sustainability and Development Alex Crowley and Mayor John Hamilton. (Lucas Gonzalez, WFIU/WTIU News)

Correction: A previous version of this article misstated the exact amount of former CRED funds approved for the Tech Center.

All but one member of Bloomington City Council voted in favor of appropriating more than $3 million for the construction of the Tech Center in the city’s downtown Trades District.

The only holdout at the body’s Wednesday meeting was District 6 representative Stephen Volan, who abstained from voting on the ordinance.

Volan criticized the city’s plan to use former CRED (Community Redevelopment Economic Districts) funds for the project instead of TIF (Tax Increment Financing) funds. Both can be used to fund economic development projects, but CRED funds were designated for the downtown area, which is in the sixth district, and an area south of downtown.

“I agree with the purposes of it, but I do not agree in any way with the cavalier way that the mayor — and I’ll put it squarely on his shoulders — thinks about this money, and the way that he has instructed his staff to respond to questions,” Volan said.

However, the CRED Districts — established in 2003 under former Mayor John Fernandez — have expired. Therefore, that money moved into the city’s general fund, as required under state law.

“The CRED was created to consider areas that needed extra help to revitalize,” Volan said. “This is sort of a bygone fund. It’s not wrong to end it, but the administration … they have a very convenient definition of what they can do (with it).”

TIF funds are also confined to certain areas within the city, but those districts are much larger and more scattered. TIF funds consist of property tax revenues whereas CRED funds collected sales and income tax dollars.

In a Tuesday memo to city council members, Mayor John Hamilton wrote that he plans to reserve TIF funds for the redevelopment of the former IU Health Bloomington Hospital site, now known as the Hopewell neighborhood.

Hamilton Memo to City Counc... by Indiana Public Media News

“We anticipate TIF funding may be needed to address future infrastructure costs for the development of the remaining parcels (some of which may be reimbursed from future development),” the memo states. “The use of the former CRED funds to complete the Tech Center is very appropriate and fully consistent with the purpose and prior uses of those funds. Drawing on CRED funds to complete the Tech Center follows our ongoing goal to maximize the use of all funds available to complete projects intended to spur future economic vitality.”

Volan also said was frustrated by the city’s lack of answers to questions he asked at Wednesday’s meeting and one on April 4, when the item was first introduced but a vote was delayed.

“I feel incredulous because on April 4 I wanted to ask somebody these questions,” Volan said. “I was told we’d get answers, but there was no one present on April 4 to answer accounting questions; and now I’m being told by the administration ‘Well, we can get you that stuff.’ But you want the vote now. You want us to vote now on something when we don’t have complete information to understand why you made the decisions you made.”

Present Wednesday from the mayor’s administration was Alex Crowley, director of economic and sustainable development. He said former CRED funds do not have to be invested in projects within the now-expired districts.

“We really should be thinking about CREDs, especially now that the districts were retired, as being benefits to the whole city,” Crowley said.

Hamilton himself was also present for the first section of Wednesday’s meeting but left before the discussion of the appropriation ordinance.