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Members of the Caledonia planning commission and village board will host a public hearing at 6 p.m. Tuesday about whether or not the village should establish a tax incremental financing district to better attract commercial/industrial development.

This district – better known as a TID or TIF – is a special growth tool communities can use to increase their tax bases. Property taxes generated by development over a specific amount of time are used to pay back the monies borrowed to put in the necessary infrastructure like sewer, water and roads. Once the loans are paid in full, property taxes from the new business tenants turn to the municipal budget.

If approved, the new tax incremental financing district will consist of about 765 acres in the southwest corner of the village. The area is roughly bordered by Highway V to the east, I-94 to the west, Highway K to the north and the border between Caledonia and Mount Pleasant to the south.

If the new TIF district is ultimately approved by the village board, Caledonia will connect sewer and water through the Highway 20 pipeline in Mount Pleasant and come north along Highway V. This way, when a developer comes knocking, the village can quickly get infrastructure in the ground for the proposed new business.

The hearing is part of the regularly scheduled Planning Commission meeting that starts at 6 p.m. Tuesday at the East Side Community Center, 6156 Douglas Avenue.