City giving up on TIF District No.2
Lack of development leads Cedarburg to close taxing district on property on Highway 60

By Denise Seyfer - News Graphic Staff

March 12, 2015

CEDARBURG — With a unanimous vote at Monday’s Common Council meeting, members closed the city’s second tax incremental finance district, having to write off $190,000.

“If another (development or TIF district) started tomorrow, we’d have $1.2 million to make up” due to the decline in market values since the date the district was created, said council member Paul Radtke, who served as acting mayor at the meeting due to Mayor Kip Kinzel’s absence.

The total district was to achieve an estimated $118,538,000 in projected value had the development occurred. The base value of the property in the district was $2,924,600 on Jan. 1, 2007.

Owners of the privately held parcels are Clyde Wirth, who was to develop commercial and senior residential property; Duey Stroebel, who was to build two-family residential and senior housing; city of Cedarburg planned on building a business park; and Rettmann Trust, whose parcel was later sold to the Grob family and now is Covered Bridge Field. It was to install offices and a conservation subdivision; Baehmann Family Trust owns a portion of the district that was to build commercial, single and two-family residential and a business park.

In a TIF district, funds that would have gone to taxing entities such as the city or the school district, instead go back into a fund used for improvements to the district.

The present value of the 2008-2027 increment of the project and bond should have totaled about $12.2 million at an average interest rate of 5.35 percent, according to the TIF district plan.

However, since the district was created, no development has occurred on the land that sits on Sheboygan Road and Highway 60 since the project was approved in January 2007. None of the projected increment has been captured to date. In fact, the city lost money, said Cedarburg City Administrator Christy Mertes.

The TIF funds should have paid for water mains, a sanitary sewer system, a stormwater management system, streets south of Highway 60 and business park improvements and electric service, which would have included street lighting, gas, telephone lines, an emergency warning siren and fiber optic utilities.

The city did not want to further burden the taxpayers with steep infrastructure costs, Radtke said, adding the TIF district plans for development halted when the economy fell.

“There is no easy way to service the area with stormwater sewers or water for that matter,” said Public Works Director Tom Wiza, about the idea for the city to put in the infrastructure ahead of any residential or commercial development. “It would be a financial loser for the taxpayers.”

Stagecoach Inn owner Brook Brown said he would like a discussion with Ehlers to see if the city could regain the $190,000 loss.

Mertes said she asked Ehlers the same question, and the response was the city would not be able to recoup costs. Yet, if another TIF does well, then the city could get the funds back after paying other involved parties.

Common Council member Patricia Thome read a statement expressing her disappointment about the original TIF No. 2, saying it did not happen because the council members in 2001 did not follow the financial advise from Ehlers.

The TIF was developed with the idea that the city had experienced a limited amount of new industrial development and industrial expansion, thus limiting growth in the industrial tax base. Further, the city experienced decreased job availability along with less indirect local spending by employees and employers.

Therefore, the city sought to improve its economic development opportunities to attract an industrial development and private investment at a 60acre site the city purchased in 1998. The city business park was considered a necessity at the time, because there were no large publicly-owned or privately-owned sites available to offer existing businesses or to attract new businesses. The business park was also a component of the city’s master plan for many years.

The land along Highway 60 lacked public utilities and internal streets, according to project plan documents, so the creation of TIF No. 2 was deemed necessary to provide the funding for the business park and other development nearby, said council members at the time.

Further, the city had no developer engaged specifically to finance development. Adding to the mix, the city had no budgeted funds available to pay the costs of needed infrastructure improvements.

City officials said they remain hopeful that a different, more viable development would be possible on the properties.

Denise Seyfer can be reached at .