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Poised on the brink of a major decision affecting the city’s growth, Onalaska Plan Commission members stepped back from recommending a tax increment financing district to ignite waterfront development.
The delay is temporary. When the commission takes the issue up in October, it will more than likely move it on to the Common Council’s agenda in November.
The temporary delay is due to the uncertainty of property value changes between now and Sept. 30, the final date for a decision if the city wants to use 2009 property values for the base value of a TIF district.
According to Mayor Mike Giese, the city is waiting for the Wisconsin Department of Transportation to complete the purchase of five properties along Highway 35 at the Main Street intersection. The properties are being purchased as part of the process of the DOT’s Highway 35 re-construction around that intersection scheduled for 2012.
Those properties are valued at about $700,000 as private property. When the DOT purchases them, they become public land, eliminating the tax revenues.
The property in the proposed TIF district is worth $13.4 million including the future road right of way. If the city created the TIF district before the land were sold, it would soon be behind by $700,000 at the start in trying to generate new tax revenue to pay off TIF district expenses.
On the other hand, development proposals between now and Sept. 30 might generate enough revenue to offset the loss of the $700,000. Since the city has until Sept. 30 to make a decision, waiting a few months will give planners more confidence in the estimates.
“We have time to make the decision that is in our best interest as things develop,” Giese said.
However, a delay means the city might have to use 2010 property values to determine the base value of the TIF. Depending on the economy’s performance, property values could then be higher or lower.
Jason Gilman, the city’s land use and planning director, said the city is fighting two unknowns: the tolerance the city has for taking on new debt and how much investment developers are willing to make.
The city has about $12 million worth of proposed projects that would require going into debt. The city is not obligated to go through with all of those projects. However, without the advantages of a TIF district, which often provides for installation of infrastructure normally paid for by developers, prospective builders might not be as attracted to bring new projects to Onalaska and the waterfront.
If a TIF district is approved, land owners would continue to pay taxes on the base value to all taxing agencies, including city, school district, county and technical college district.
Taxes collected on the property value above the base — called the increment — would be directed to paying for costs associated with promoting development within the TIF district.
Nevertheless, Giese is confident the council favors the creation of the TIF district. “This is not something brought forward by a developer with a 30-day timeline,” Giese said. “It’s been happening since 1992-94. This is so well thought out, the risk is mitigated by the pay as you go method proposed and how well it’s planned. It’s unlikely anyone (on the council) would find this unfavorable.”
Judging from the May 26 public hearing on the TIF district, the public has no objections either. Two residents, Joyce Diveley, a resident, business owner and chair of the city’s Long Range Planning Commission, spoke in favor of creating a TIF district because it will be a catalyst for waterfront development.
“The future of Onalaska can begin to bloom and the TIF can set the stage,” Diveley said. “It’s important to move to the next stage.”
Developer Mike Tooke remarked he already sees developers’ interest peaking in anticipation of a TIF district.
“I can’t think of a better way to create tourism and excitement for the waterfront,” Tooke said. “If I can do anything to help, please let me know.”
No one spoke in opposition.
In other business, the commission Tuesday voted to recommend to the council that a change in the design of the Savannah Village development meets the definition of a substantial change and therefore requires a public hearing on the change. The commission will hold a public hearing at its June meeting with a council decision in July.
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hank wrote on May 28, 2009 11:17 PM: