Arbor Homes subdivision in jeopardy

May 11—TIPTON — A 300-plus housing subdivision proposed for the far west side of the city of Tipton is in jeopardy after the developer terminated its purchasing contract with the owner of the 140-acre property.

Tipton Mayor Tom Dolezal said at Monday's City Council meeting it was his understanding that Arbor Homes, the Indianapolis-based builder, had terminated its purchasing contract with the owner of the property targeted for the development. The 140-acre property is located just west of Indiana 28, directly west of the new Tipton County Jail.

An email sent Monday seeking comment from Austin Schille, vice president of land acquisition and entitlements at Arbor Homes, was not returned as of Tuesday evening, though Schille told the Tipton Tribune late last week "anticipated costs and economics are what deterred us."

The cost to build new homes has skyrocketed within the last year. According to the U.S. Census Bureau, single-family home construction costs went up by 17.5% from 2020 to 2021, the largest yearly spike since 1970, largely due to the cost of lumber increasing.

According to a concept plan presented to the public by Arbor Homes, the subdivision, dubbed Canal Run, would have included 338 homes and two retention ponds. Construction was expected to begin in spring 2023, with full build-out expected by 2029.

While the purchasing contract has been terminated, Dolezal said the city is considering offering incentives to try and salvage the development, including possibly designating the 140-acre property as a residential tax increment financing district (TIF), as he believes new residential development should remain a top priority for the city. Dolezal has praised the project in the past and has made attracting new housing developments a main priority for his administration.

"I think, in regard to the housing market, it may take more incentives than normal for us to land this first one," Dolezal said.

Dolezal said he has had talks with Arbor Homes and the company told him to keep them updated on possible incentives.

"I plan to stay in contact with them (Arbor Homes)," Dolezal said, adding he's also been in discussion with other housing developers before and after Arbor Homes publicly announced their plans to build a subdivision in Tipton.

Historically, TIF districts have been used to fund infrastructure projects and as an incentive to bring commercial developments to town. Historically, TIFS were not be to be used for residential developments, but the Indiana General Assembly changed that in 2019 to subsidize the cost of building new housing units.

While a residential TIF within the city of Tipton is still merely a possibility at this stage, residential TIF districts have, in the last few years, been used by cities and counties to use the increase in property taxes generated by the new development to pay off the debt the city took on to either pay for land acquisition or infrastructure, such as a new roads, water and sewer, or both.

Tyler Juranovich can be reached at 765-454-8577, by email at tyler.juranovich@kokomotribune.com or on Twitter at @tylerjuranovich.