Two TIF districts close with mixed results
Taxes gathered will start contributing more to city revenue, slightly easing taxpayers’ burden

By Hannah Weikel - Freeman Staff

Oct. 27, 2017

 A 50-home subdivision off White Rock Avenue near Frame Park was one of the largest projects completed in TIF 9 during the 15 years it was open. The district, along with TIF 16, closed this year.
Hannah Weikel/Freeman Staff

WAUKESHA — Two of Waukesha’s Tax Increment Financing districts — created to incentivize and promote development in those areas — closed this year and will start to have a positive impact on tax bills next year, city finance officials say.

Now that both districts have closed, taxes gathered in those areas will no longer go toward the cost of redeveloping the district, but will instead help ease the burden on taxpayers and offset expenses generated by the city, area schools, the county, technical colleges and the state, beginning next year. While TIF 9 came out more than $12 million ahead in property value, TIF 16 to the southwest opened just as the recession hit; developers backed out and property values dropped.

There are now 12 active TIFs in Waukesha, according to city Finance Director Rich Abbott.

Waukesha uses TIF to incentivize development that would likely not happen without it. Each project is analyzed before the district is created to verify there is a true gap in financing that makes a

TIF necessary, said Community Development Director Jennifer Andrews.

TIF 9 was created in 1993 when the former General Castings Foundry on Main Street site shut down and the city acquired the land for $730,754. The ground was contaminated with metals and chemicals, so the city cleaned it up and granted the property to a developer who built a 50home single-family subdivision off White Rock Avenue on Phoenix Drive and Lombardi Way. When TIF 9 was created almost 15 years ago, all the property in the district was worth about $2 million. Now, the property is worth $14.8 million. While the district was open, the city spent $4.5 million in that area on riverwalk improvements, land acquisition, projects, loans and capital expenditures.

With TIF 9 closed, the area’s tax rate — $21.38 per $1,000 — will go toward the city’s budget instead of loans and expenditures from redevelopment.

“When we create a district like that, we estimate the costs. We try to be comprehensive in our budget but those numbers fluctuate,” Andrews said.

In the last couple of years, city officials approved $275,044 from TIF 9 to be loaned to TIF 16 so the two districts could close at the same time, Andrews said.

TIF 16 was created in 2007 when the area seemed ripe for development, Andrews said.

“We had some project proposals and we thought some would happen, but the recession hit and financing for those projects dried up,” she said. “The impact from 16 was negligible because those projects didn’t happen.”

Proposed projects included townhouses on South Street, commercial redevelopment on South Street and Barstow, redevelopment of the train depot and Family Dollar.

Instead, the city loaned money to homeowners for improvements of older homes in the district.

“We are always trying to maintain our older housing stock. That was the best thing that came out of the district,” Andrews said, adding that all homeowners except two have fully paid back the loans.

She said it’s possible to reopen the district if a developer comes forward with a project in the future, but “we wanted to take this opportunity [to close the district] and hit the reset button and possibly come back with a smaller district.”

TIF districts are complex to explain and are often criticized by those who view them as the city giving taxpayer money to fund for-profit developments.

Each project is looked at carefully by community developers to make sure there will be as much of a return on investment for the city as the developer claims, Andrews said.

“I think sometimes people only look at one side of it, the side where the city is helping a developer with a project,” she said. “The other side has many benefits for the community that sometimes get overlooked.”

TIF district workshop on Monday

WAUKESHA - Interested in learning more about TIF districts?

UW Extension-Waukesha County is offering an information workshop for Plan Commission members and the public on Monday.

There will be a presentation and panel discussion to inform people how TIF is used in Waukesha and neighboring communities. The workshop will be held from 6:30 to 8:30 p.m. in Waukesha City Hall's council chambers, 201 Delafield St.

Registration is required to participate in the event. The cost is $30 per person and registration closes at 4 p.m. today. Space is limited.

Contact Ann Wied at 262-548-7788 or awied@waukeshacounty.gov for more information. Register online at http://uwex.maxgalaxy.net.