Financial report is good news for Elkhart Lake

THE BOND MARKET WAS good to the village of Elkhart Lake this month and tax incremental finance districts continue to be good for the village as well.

The village sold bonds earlier this month to refinance existing and new TIF debt with positive results.

Phil Cosson of Ehlers and Associates, the village’s financial advisors, reported to the Village Board that the bond issue sold at a lower interest rate than the village had been paying on the previous loan from the State Trust Fund. Not only did the village save money on interest payments – almost $200,000 – but the bond itself was for $100,000 less than originally expected, adding more savings for the village.

Cosson also updated the status of the village’s three existing TIF districts, which he said are all in good shape.

He did concede that two of the districts – TIF 2 for the Sargento expansion and Victory development and TIF 4 for the Wolf Motorsports development – are likely to have negative cash flows in the short term.

Both, however, should be able to work into the black in a very short time, and village officials said the village’s reserves are strong enough to cover any immediate revenue shortfalls until the TIFs are strong enough to meet the debt load and repay the village.

Cosson also noted that the village has a strong developer’s agreement with Sargento for TIF 2 that safeguards the village against insufficient increased valuation for the expansion, should that happen. And there is a solid letter of credit in place for the TIF 4 development that should keep the village on solid financial footing there as well.

As for the developments within the TIFs, Sargento’s expansion is moving ahead on pace and other development in the district should follow shortly. Meanwhile, the Wolf Motorsports development is going up – and filling up – rapidly, at a faster pace than were used in the TIF projections by Ehlers, which is even more good news for the village.

The tax incremental finance district – which uses additional property tax revenues from new development in the district to pay off the cost of borrowing for infrastructure and other improvements by the village to support that development – has been a solid, successful tool for the village in the past.

One need look no further than The Osthoff Resort, which came into being more than 20 years ago thanks in large part to the support of the village’s first TIF.

When that district closed out several years ago – ahead of schedule – it resulted in a financial windfall for the village, the school district and the other taxing entities involved, along with a solid boost to the tax base in the village.

Beyond that, the success of The Osthoff helped spur a revitalization of the tourism industry in the village and sparked other new businesses and development.

Tourism continues to grow in Elkhart Lake, thanks to the revitalized resorts and the growth of Road America with new events and new attractions.

Growth continues to spur more growth in Elkhart Lake, helped along by successful TIF districts, and that was reflected in the good news from the recent bond sale.

It should only get better in Elkhart Lake.

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