Whitestown City Council is considering an ordinance introducing 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. junkyard along Indianapolis Road to create a youthful sports environment, hotel, water park, apartment buildings, retail space, and other amenities.
City councils said the food and drink tax would help incentivize the project and take the burden off Whitestown residents and owners by making the tax “pay to play” by taxing everyone who uses the appropriate Whitestown services, rather than just tax residents.
The developers of the project are Milhaus, a retail developer, and Homefield, a Kansas City-based company.
“We wanted a facility that the facility can be paid for and that is not fully supported and functioning by the city, but (the developers) have to bring it in to see the reward,” said Nathan Messer, director of operations and economic Development of the city. “You buy the bonds for it. You support them, and the increase in the cost of food and drink that they want to bring helps. “
Under the proposed regulation, the tax is 1 percent of the gross retail income a merchant receives from food or beverage transactions. Many other counties and parishes in Indiana have 1 percent food and beverage tax, including Boone County, Lebanon, and Zionsville. If the ordinance is passed, the tax will stay in place until the city council decides to repeal or eliminate it, according to city officials.
Councilors said they expect most of the tax revenue to come from visitors rather than Whitestown residents, reflecting an expected tourism boost from the development.
“We’re going to see an increase, an influx of individuals and their families to Whitestown, which means our infrastructure will be affected by the increased traffic,” said Clinton Bohm, President of Whitestown City Council, during a public hearing on February 22nd. “This is an item that can be used to generate income from people who use our infrastructure and also buy meals in our restaurants.”
Bohm said the city would use the proceeds not only to incentivize the development project and maintain and improve infrastructure, but also to create residual income that the city could use for future projects. He also said the proceeds could be used as a local matching fund for two projects on Interstate 65 that the city is working with the Indiana Department of Transportation to complete. The projects are an exchange modification for Ind. 267 and a new exchange for CR 550 S. in order to create entry points into the city.
The city council heard a first reading of the ordinance at its February 10 session and held a public hearing on it on February 22. The city council is expected to vote on the adoption of the regulation after a second reading at its next session.