Portage officials and a developer hope the city council’s move to offer the first-ever residential property tax abatement plan will jump-start interest in the Marina Shores at Dunes Harbor, an upscale property on the northeast side.
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Interested buyers who build a home within an 18-month window will see their property taxes gradually increase to 100 percent after five years, said Andy Maletta, economic development director. The idea is to help offset an extra tax homeowners now have to pay toward the bond that built the marina at the center of the development.
Without the abatement, homeowners face paying their full property tax bill and hundreds of dollars a month toward the bond, which could discourage building, Maletta said.
It’s hoped more interest will be generated in the development by giving new homeowners a tax break up front, and the developer paying the first year of the special assessment, and setting a time limit, said Councilman Scott Williams (D., 3rd District).
“Our concern was this situation different enough to involve a special tax abatement,” said Williams, who led the charge on the measure along with Council President Mark Oprisko (D., At-Large) and Clerk-Treasurer Chris Stidham. “Then, we put together this ordinance to hopefully stimulate economic growth and new home development in that area.”
For years, city officials have been marketing the area to potential home buyers in Northwest Indiana and the Chicagoland area. The development is bordered on the north by Lake Michigan the South Shore train line, which soon may become a double-main train, a planned sports resort to the west and easy access to highways. The development’s marina links to the Portage Marina and Lake Michigan.
Started in 2003, the development hit rough water during the 2008-2009 recession, and has not drawn the interest officials expected, Maletta said.
“Hopefully, [the abatement] is enough of an incentive to get people to say, ‘Yeah, I want to do it now,” and, it gives more of a sense of urgency to it,” he said.
David Bresnahan, one of three developers who bought Marina Shores three years ago, said the marina has done well financially, but home construction has been well below expectations. There is room for about 235 single-family homes, condominiums, town homes and villas, but, so far, there are only about 24 homes, Bresnahan said.
“What we need here is we need five or six homes going up at the same time, so people will be convinced this project is here to stay. That will instill confidence in people,” he said.
“I think this tax abatement will help. I think a double track on the South Shore will help. I think the sports resort will help, and so will low interest rates. It’s not just one thing but a combination of things will be contributing positive factors to Marina Shores development completing its build-out,” Bresnahan said.
The City Council will review the ordinance’s effectiveness in five years. Other residential developers will have to prove they have a special assessment or other deterrence to drawing homeowners to their properties if they want an abatement, Maletta and Williams said.
Michael Gonzalez is a freelance reporter for the Post-Tribune.