The City of Platteville’s issues with its Tax Incremental Financing districts got a wide public hearing Thursday.
The Common Council special work session was attended by representatives of every group affected by TIF districts — the Platteville School District, Grant County and Southwest Wisconsin Technical College — along with all the economic development organizations with which the city works and one TIF district developer.
A report from Vandewalle & Associates introduced at an April 23 Common Council meeting laid out which TIF districts are doing well — TID 4, the Platteville Industry Park, and TID 5, the Keystone development — and which are not — TID 6, the Platteville Industry Park expansion, and TID 7 downtown.
The other main TIF issue is the fact that the state maximum TIF district size of 12 percent of equalized value is projected to be exceeded when the Emmi Roth USA cheese plant is added next year.
The 12-percent limit leaves $7.7 million in property value the city can add to TIF districts, and gives the city limited time to rearrange its TIF districts. A timetable prepared by Scott Harrington of Vandewalle & Associates gives the city a deadline of Aug. 14, because of state requirements, to approve TIF district changes and submit them to the state Department of Revenue.
The plan discussed at the meeting would shift revenue now going from TID 4 to TID 7 into TID 6, which is within the one-half mile limit allowed by state law for out-of-TID expenditures. TID 5 revenues would go to TID 7.
TID 6 would be expanded by adding four properties. TID 7 would be expanded by adding the Library Block, formed by West Main, Chestnut, West Pine and Elm streets that currently houses the Platteville Public Library, along with property north of the Library Block.
“It doesn’t mean you have to spend it, but it gives you the opportunity, which you’re going to lose pretty quickly if you don’t,” said Jim Schneller of Platteville Development Corp. “It makes total sense to me to modify this.”
Platteville Ald. Barb Daus, chair of the city’s Downtown Redevelopment Authority, described the Library Block as “valuable space that’s underperforming in terms of its potential for tax revenue.”
Jack Luedtke, executive director of the Platteville Main Street Program, said TID 7 needs retail space because “none of the existing spaces fit the needs of 21st-century retail.”
Melissa Pahl, executive director of the Platteville Area Industrial Development Corp., laid out a plan to expand TID 6 by adding four properties — L&M Corrugated Container Corp., 32 Means Dr.; the vacant lot at HyPro, 1000 Phillips Road; the former Stoneman’s Mill property, 1540 Vision Dr.; and Timmerman Supply Inc., which is moving from Kieler to 355 Enterprise Dr.
Harrington said the city can add Stoneman’s Mill, now valued at $2 million, to TID 6, along with the $1.9 million in property estimated to be added to TID 7, “without violating 12 percent if you do it this year.”
Pahl said the Stoneman’s property might need an incentive to find a buyer. “It was set up for a business that is longer there,” she said, likening it to “a custom home for someone with odd tastes.”
Ron Brisbois, executive director of the Grant County Economic Development Corp., said the Stoneman property was “priced to sell,” and added, “This TID needs increment … you need every single inch of land to create increment for the TID.”
“TID 7 and TID 6, we put infrastructure dollars in early on so that the infrastructure would be there to support it,” said Platteville City Manager Larry Bierke. “The increment hasn’t developed to pay for that quite yet. There’s plenty of time left.”
“It may be quite a while before the general fun gets that debt load lifted,” said Harrington of the city’s TID 7 spending. “The majority of it will be needed for each project to get that project rolling.”
The meeting included more general discussion of the benefits of TIF districts, and their consequences. A TIF district allows a city or village to develop “blighted” or undeveloped land, financed by the growth of the value of the property within the district. That growth only goes to the municipality — the City of Platteville in this case — and not to the school district, technical college district or county until the TID district closes.
Harrington called TIF “far and away the most powerful economic tool that communities have. … When the market is not responding, that’s why we have TID.”
Platteville School District superintendent Connie Valenza pointed out that development that brings in jobs but not families doesn’t benefit the school district. The school district’s state aid decreases when land values increase; the school district receives more state aid when enrollment increases, up to a capped amount.
“When districts are growing in numbers of students, they’re in very good position,” she said. School districts benefit by residential growth, “families with two or three kids. That’s the real benefit of TIDs for our school district.”
Valenza asked that the city “look for ways to make these TIDs attractive to families,” she said. TID 5 has had significant retail development, including Walmart, Menards and the future Benvenuto’s Italian Grill, but no residential development yet.
“As most communities grow their economy and economic development, that’s going to bring families in,” said Schneller. “There’s no less tax revenue coming in there than when the district was set up.”
“We’re all looking to grow jobs,” said Pahl. “The ultimate goal is to get them to live here too.”