Council approves new tax financing district at former AMF bowling site
Long debate about using TIF precedes vote

By Matt Masterson - Freeman Staff

Sept. 18, 2015

 The proposed 214,000-square-foot industrial building at the former AMF bowling center site, 801 Northview Road.
Submitted rendering

WAUKESHA - While a proposed amendment to one tax incremental financing district brought dozens of concerned citizens to Tuesday’s Common Council meeting, the creation of another drew considerably less public outcry.

But even so, it was the latter that dominated discussion among the 14 aldermen.

Debate centered on the formation of TIF No. 25, an industrial district highlighted by the former AMF Bowling Center building at 901 Northview Road. Mount Pleasant-based developer HSA Commercial has proposed to raze that building, clear the site and replace it with a 214,000-square-foot industrial building.

The council ultimately voted 9-5 for the project, but not before a healthy debate over the use and misuse of TIF funding.

The city intends to offer the developer incentives structured as a $1,150,000 grant paid during the facility’s construction and as a “pay as you go” grant, meaning that as increment is realized in the district, reimbursement will be made to the developer up to $1,650,000.

Community Development Director Jennifer Andrews said Tuesday that if it weren’t for the TIF district, the developer would not be doing business in Waukesha.

While the plan was ultimately approved, some aldermen raised concerns about the “slippery slope” tied to the continued use of public funds to help grow private businesses.

“If we’re setting the standard of ‘Come here, do business here and we will give you a whole bunch of tax money’ ... to start fostering business, it’s the beginning of a habit I don’t know that I can get behind,” Alderman Corey Payne said. “If this is the direction of the role of government, to always give handouts constantly to people or they aren’t going to do business here, what is the value of the business truly?”

Alderman Daniel Manion shared those concerns, and cited a recent op-ed from state Sen. Duey Stroebel, in which the Saukville Republican said the abuse of TIF would lead to a “black eye” for the tool.

He also drew a comparison to the previously hotly-debated amendment to TIF district No. 22 - voted down Tuesday - that would have paved the way for the city making a $1.6 million loan to the Sunset Homes condominium association.

“I find it interesting that in the last two weeks, a firestorm has erupted in the city and there are a number of people out here in the gallery tonight who are vehemently opposed to the city giving a $1.6 million loan to a condo association to correct a blighted situation,” Manion said.

“But I am not hearing a lot of opposition to us giving a $2.9 million incentive in the form of a grant - a gift that isn’t being paid back - to a developer.”

A new format

Public comment at the last two council meetings has been dominated by opinions on the Sunset Homes project, but not a single local resident spoke either in favor or against the AMF TIF.

The PAYGO grant payouts will also be dependent on the number and salaries of the jobs held at the site.

HSA will need to create 26 new jobs over the next 15 years to realize 100 percent of the grant reimbursement.  The developer would be eligible for smaller percentages of the funds if it cannot reach that goal.

The site’s job creation numbers would be reviewed by the city on an annual basis.

As is, the property has an assessed value close to $5 million, but with the creation of the TIF district, HSA has guaranteed the land will reach an assessed value of $12.5 million by 2018, or the developer will be forced to pay taxes to cover the difference.

If that value is attained, it means taxes paid to the city would increase by $217,000 each year.

City Administrator Kevin Lahner said tying these different factors together may be something new to Waukesha, but he has structured TIFs similarly in the past.

Andrews said the bowling alley has sat vacant for approximately two years, and due to the building’s configuration and age, “there is no viable reuse of the existing structure.”

Projects in the district would include: demolition of an existing shuttered bowling facility; city-required architectural upgrades and site preparation; environmental testing; storm sewer upgrades on site; and land acquisition.

While he agreed Payne and Manion raised valid concerns, Council President Andy Reiland believes that what the project ultimately comes down to is being competitive in bringing in outside businesses - because if Waukesha won’t be, other communities will.

“This TIF is allowing us to be competitive, bring in this developer, other developers, so that we don’t look at that building being vacant for the next 10 years,” he said. “We can sit here ... and we play the card and say there is going to be another developer down the road. And then we sit here 10 years down the road and we’ve lost a couple million dollars, potentially, while the building sits and continues to deteriorate.”