The Platteville Common Council will hold a special meeting to discuss its Tax Incremental Financing districts Thursday.

The work session with the city’s economic development partners, including the Platteville School District, Grant County and the Southeast Wisconsin Technical College district, will be held in the Mound City Bank Motor Branch starting at 6 p.m. Those three groups must approve any changes in the city’s TIF districts.

Other expected participants include the Platteville Main Street Program, the Downtown Redevelopment Authority, the Platteville Area Industrial Development Corp., UW–Platteville, the Platteville Area Chamber of Commerce, the Grant County Economic Development Corp., the five-county Prosperity Southwest Wisconsin, and Wisconsin Economic Development Corp.

The meeting is a follow-up to a work session held before the council’s April 23 meeting with Vandewalle & Associates of Madison, which is advising the city on its TIF district issues.

The city’s TIF districts currently occupy 10.6 percent of the city’s total equalized value. The city is projected to exceed the state maximum of 12 percent of equalized value when the Emmi Roth USA cheese plant is added next year.

The limit is only one of the issues the city’s TIF districts face. Other issues are the weak state of TID 7 downtown; the council’s desire to close TID 8, the former Southwest Health Center that now is Park Place Senior Living; and the amount of vacant land in TID 6 on the city’s southeast side that isn’t under the control of the TIF district.

The city has until Aug. 14 to make additions to the city’s TIF districts, and the process takes 45 to 60 days, according to Vandewalle & Associates.

TIF 101

TIF districts are one of the most commonly used economic development tools in Wisconsin. 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.

“The basic principle with TIF is capturing the tax revenues from added property values within a defined area to promote development within that area,” said Scott Harrington of Vandewalle & Associates in a memo to city administration.

“During the life of a district, all property taxing districts continue to collect taxes from the base value, but taxes levied against any increases in value (or “value increment”) flow to the district to be used for eligible projects.”

Those “eligible projects” include capital costs, such as infrastructure improvements; grants to developers as part of development agreements; costs associated with creating a project plan, such as engineering and legal costs; site preparation costs; and marketing costs associated with a TIF district.

The school district, county and technical college district receive increased property tax revenue from the growth in property value in the TIF district when the TIF district closes.

TIF math

As of Jan. 1, 2012, the value of all of Platteville’s TIF districts totaled $58.5 million, about 10.6 percent of the city’s total equalized value. The 12-percent limit leaves the city about $7.7 million of land that could be added to a TIF district.

The Emmi Roth plant is expected to have an assessed value of about $15 million when the plant is completed in 2014. The plant’s value is estimated at $5 million as of this year. The city also is in the process of adding about $1.9 million of property to TID 7 in the downtown area.

Even though TID 4, the Platteville Industry Park, is scheduled to close in 2018, with an estimated value increment — the difference between the land value at the opening and closing of the district — of $7.8 million, “the potential general increase in values across all of the districts over the next five years due to inflation and/or new projects could easily equal or exceed this amount,” wrote Harrington. “This would leave the city without the ability to create new districts or add property to existing districts until one or more of the other districts closes, which is not currently scheduled to occur until 2025.”

Just as a result of Emmi Roth and the proposed TID 7 expansion, “the city will be well above its TIF capacity in 2014,” said Harrington in the report.

The city’s TIFs

Platteville’s two TIF districts in the best financial shape are TID 4, the Platteville Industry Park, and TID 5, the Keystone development, including Walmart and Menards.

TID 4 is the biggest TIF district in terms of jobs. The district is fully built out, with 21 companies with a total of 1,100 jobs within its boundaries. The city is currently using tax revenue from TID 4 as a donor to TID 7.

TID 5 has grown by $36 million since the district opened in 2005. Most of that growth has been in commercial property. The mixed-use district was supposed to have residential development north of Walmart and Menards, but no homes have been built there yet.

The TIF district with the biggest challenges may be TID 7 downtown, which has had infrastructure improvements, but only $2.3 million in property value growth. TID 7 has a negative fund balance of more than $1.5 million, and is projected to close with a negative fund balance of more than $2.4 million without additional redevelopment.

TID 7 may have added to it the Library Block, the block of West Main, Chestnut, West Pine and Elm streets that currently houses the Platteville Public Library. The Library Block is part of a group of 21 parcels of land the city is considering adding to TID 7. TID 7 also may have added to it the proposed UW–Platteville Innovation Center.

TID 6, the largest of the city’s TIF districts in land area, is “the one with the greatest development potential,” wrote Harrington. However, the TIF district had a projected negative fund balance at the end of 2012, and has “significant long-term outstanding debt that the district may not be able to fully satisfy prior to its close with existing development alone. As a result, the district lacks funds of its own to advance additional public and private projects.”

Vandewalle & Associates’ recommendations for what the city should do with its TIF districts include:

•    Develop a more broad strategy for the city with its TIF districts, along with detailed strategies for each TIF district.

•    Continue transferring revenues from TID 4 to TID 7, and consider transferring revenues from TID 5 to other TIF districts.

•    Discuss with developers whether residential development in TID 5 is still viable.

•    Identify other possible projects within TID 5, or within one-half mile of TID 5’s boundaries. (TIF district boundaries can be changed up to four times within a TIF district’s lifetime, according to state law.)

•    Work with “partners to secure land” and create a “funding strategy for land and improvements” within TID 6. That could include moving the Stoneman’s Mill site from TID 4 to TID 6.

•    Proceed with changing TID 7’s boundaries.

•    Work with the RDA on a plan to develop TID 7.

•    Close TID 8 next year, or develop a new strategy for TID 8.