The Whitestown Town council is considering an ordinance establishing an excise tax known as a food and beverage tax to fund a $135 million development project.
Whitestown announced plans earlier this year to develop the former Wrecks Inc. automobile junkyard along Indianapolis Road to create a youth sports environment, hotel, water park, housing, retail space and other amenities.
Town councilors said the food and beverage tax would fund incentives for the project and unburden Whitestown residents and property owners by making the tax “pay to play” by taxing all who use applicable Whitestown services instead of taxing only residents.
The project’s developers are Milhaus, a retail developer, and Homefield, a Kansas City-based company.
“We wanted a facility that the facility helps pay for and is not fully town supported and functioned but (the developers) have to bring in to see the reward,” said Nathan Messer, the town’s director of operations and economic development. “They are buying the bonds on this. They are backing them, and it is being helped paid for by the food and beverage increase that they intend to bring.”
According to the proposed ordinance, the tax will be 1 percent of the gross retail income received by a merchant from food or beverage transactions. Many other counties and municipalities in Indiana have a 1 percent food and beverage tax, including Boone County, Lebanon and Zionsville. If the ordinance is adopted, the tax would continue until the town council votes to revoke or eliminate it, town officials said.
Council members said they expect the majority of revenue collected from the tax to come from visitors, not Whitestown residents, as a result of an expected tourism boost from the development.
“We are going to see an increase, an influx of individuals and their families coming to Whitestown, which means our infrastructure will be impacted by the increased utilization,” Whitestown Town Council President Clinton Bohm said during a Feb. 22 public hearing. “This is an item that will be able to generate revenue from those individuals coming in and utilizing our infrastructure and also purchasing meals from our eateries.”
Bohm said the town would use the revenue to not only fulfill incentives to the development project and maintain and improve infrastructure but also create residual incomes that the town could devote to future projects. He also said the income could be used as local matching funds for two projects on Interstate 65 that the town is partnering with the Indiana Dept. of Transportation to complete. The projects are an interchange modification at Ind. 267 and a new interchange at C.R. 550 S. to allow create entry points into the town.
The town council heard a first reading of the ordinance during its Feb. 10 meeting and held a public hearing for it on Feb. 22. The council is expected to vote whether to adopt the ordinance after a second reading during its next meeting.