Fort plan panel advances two new TIDs

By Chris Spangler

The Fort Atkinson Plan Commission on Tuesday advanced creation of two new Tax Incremental Districts (TIDs) for the city.

Commissioners approved project plan and district boundaries for TID Nos. 9 and 10, both located on the city’s north side.

Specifically, TID No. 9 will support the Banker Road residential development and nearby northwest infrastructure, while TID No. 10 will assist business properties in the Blackhawk Drive/Edward Street area, and areas both east and west of Ralph Park.

Both districts will be presented to the full city council on Oct. 18 and, if approved, brought before to the Joint Review Board Nov. 1.

A TID is a designated and bounded land area which has met certain legal requirements, allowing it to be designated as a district that needs financial assistance to induce and attract development and redevelopment activity. Tax Incremental Financing (TIF) is the financial tool applied within the district, allowing municipalities to fund improvements and redevelopment projects.

The value of the land before the TID is created  — which is frozen when the TID is created — is considered the tax or TID base value. New value achieved over the life of the TID above the base value is called an “increment.” Increments are created through improvements made to the properties within the TID boundaries. 

Taxing entities — municipality, school district, county and technical school — continue, over the life of the TID, to receive their share of tax revenues predicated on the base rate. Taxing entities agree to participate in the TID before the base is frozen. The TID uses monies developed through the increment value to fund projects within the district during the TID’s expenditure window. Depending of the type of agreements developed by the city with potential developers within the TID, incremental dollars can be used for infrastructural improvements made to properties within the TID’s boundaries. When the TID closes, typically some 20 to 30 years after it was created, the incremental value is paid to the taxing entities. 

TID No. 9

TID No. 9 includes the Banker Road residential development, Crown of Life Christian Academy and Fort Atkinson High School properties and extends beyond the State Highway 26 bypass to the recently annexed land currently owned by Fort HealthCare.

The church- and school-related properties only are included to meet state land area requirements. Per law, municipalities are restricted to 35% of land within a mixed-use TID that can be used for new residential development.

TID No. 9 also overlaps a portion of TID No. 8 to extend the latter’s timeframe for development.

According to City Manager Rebecca Houseman LeMire, the district encompasses 21 parcels totaling 267 acres with a base value of $22.8 million. 

In notes provided to the Plan Commission, LeMire said that under TID law, the city can spend money on infrastructure within one-half mile of the boundary of the TID, which means additional sidewalk installation or other projects could proceed. 

“The city will work with developers and property owners to provide infrastructure improvements and incentives for development. Public infrastructure and property improvements will be financed by a combination of TIF increments and debt financing,” according to the notes. 

LeMire stated that TID No. 9 is being created as a “Mixed-Use District,” with a maximum life, unless extended, of 20 years.

The city anticipates public improvement expenditures of about $23,326,350, including financing/interest costs. 

“As a result of the TID, the city projects a preliminary and conservative $29,432,020 in increments,” according to LeMire. “They primarily will be used to pay the debt service costs of the TID, project costs within the TID, and project development incentives. The increment will also be used for park improvements and street/sidewalk improvements within the vicinity of the district.” 

The city projects land and improvement values (incremental value) of approximately $75 million to be created in the TID by the end of 2042. If the project generates less than anticipated, any shortfall in paying off the loan incentive would be borne by the developer. 

Projects targeted for TID No. 9, with their estimated costs, are:

• Montclair Place overpass of the State Highway 26 bypass to allow access for future urban development to the west, $2.5 million.

• Madison Avenue water utility extension, $500,000.

• Northwest sanitary inceptor, $1.5 million; 

• Banker Road development pressure zone, $750,000.

• Above-ground water storage for the northwest side of town, $2.125 million.

• Madison Avenue improvements, $75,000.

• Banker Road geothermal system, $600,000.

• Banker Road and Madison Avenue intersection improvements, $400,000.

• City land purchases, $750,000.

• Park improvements, $125,000.

• Regional stormwater improvements, $650,000.

• Pedestrian/bike path extensions, $1.6 million.

• Road/utility installation, $4.85 million.

• Direct developer assistance, $3 million.

• Financing and interest, $3,581,350.

• Administrative and organization fees, $320,000.

No one spoke during the public hearing for TID No. 9.

During the commission’s discussion, LeMire further explained the configuration of the proposed district.

“This is primarily, at this point, to serve the development for the city-owned parcels along Banker Road we intend to develop with our new development partner, Hoffman Development Group LLC, so creating the Tax Increment District allows the financing mechanism for public infrastructure in that area,” she said.

“In order to meet the 35% threshold … we had to make the district a little bit larger, which is why we included the high school parcels, as well as the Crown of Life parcel. Those have no negative impact or positive impact … and they won’t see a change in any sort of value due to their inclusion in the Tax Increment District,” LeMire added.

Commissioner Davin Lescohier reiterated that if and when the time comes to finance projects in the TIDs, there are ways to minimize the city’s exposure to incurring debt.

Commissioner Roz Highfield made the motion to approved the plan and boundaries. This was seconded by Lescohier and unanimously approved.

TID No. 10

TID No. 10 is being created as a “Blight District” based on findings that at least 50% of the area is blighted by reason of dilapidation, deterioration, age or obsolescence; inadequate provisions for ventilation, lights, air or sanitation; high density of population and overcrowding; or the existence of conditions that endanger life or property by fire and other causes. 

The maximum life, unless extended, of the TID No. 10 is 27 years. Developer-financed tax incremental financing is being proposed for the entire TID within the city limits. 

Combined, there are 33 parcels for a total of 120 acres with a $22 million value.

The city anticipates various public improvement projects costing approximately $14,561,350, including financing/interest costs during the TID’s 22-year expenditure period. 

It plans to fund project costs with dollars received from future TID No. 10 tax increments and to issue a developer grant/loan to provide direct or indirect financing for the projects to be undertaken. 

The city projects a preliminary and “conservative” $26,690,690 in increments. It projects land and improvement values (incremental value) of approximately $50 million to be created in the TID by the end of 2049. 

The district does not include the Fort Memorial Hospital campus, but does include some of Fort HealthCare’s outlying clinics and facilities, which could be part of its future expansion to remain in the current location. 

In addition, it includes the former Thomas Industries building, owned by DB Oak Limited Partnership, which was damaged in a fire in August 2021. The owner has expressed interest in rebuilding the north portion of the building that was destroyed. 

The district also includes the former Loeb-Lorman metal-recycling site, which now is owned by the city, and the former W.D. Hoard and Sons printing plant that is slated to be redeveloped into the new BASE headquarters. 

Specifically, projects eyed for TID No. 10 include:

• Remediation of environmental contaminants at former Loeb-Lorman metal-recycling site.

• Bike/pedestrian Infrastructure that includes potential projects to extend the existing Glacial River Trail north to this area of the city, connecting with High Street and the off-street trail along State Highway 26.

Other projects might include infill sidewalk, on-street bike paths and off-street bicycle and pedestrian paths within neighborhoods. 

• City entrance feature at High Street.

• Potential Klement Parkway improvements,  pavement removal and replacement, a reconfiguration and/or replacement of the boat ramp, lighting, and other appropriate enhancements.

• Potential street and utility installation along East Cramer Street, the extension of Oak Street north to East Cramer Street, the extension of Hake Street, improvements and extension of Handeyside Lane, and future other public rights-of-way to serve new development within the TID and a half-mile of its border.

• Stormwater improvements could take place in the area around McMillen Street to the east and west, in Ralph Park, and other areas within the TID where stormwater infrastructure have been or may be identified.

• Potential park projects include improvements to Ralph Park (parking, shelters, accessibility, playground equipment, additional recreational uses) and possible additional park(s) .

• Direct developer assistance and incentives may be utilized through TIF in order to take advantage possible development opportunities.

• The cost of issuance and interest on borrowing needed for projects, along with interest due to development for any developer incentive loan.

• Administrative and organizational fees for city staff and consultants planning, engineering, legal, and administrative fees, along with organizational fees, state Department of Revenue annual fees, and the costs associated with the creation of this TID. 

In 2051, the final year of revenue collection for the TID, it is projected to have repaid all expenditures and is left with a positive surplus balance. 

During the public hearing, Curtis Abendroth, who with his wife, Diane, resides at 1000 N. Main St., asked that their nearly 14-acre property — which includes wetlands — be removed from TID No. 10.

He also asked why Opportunities Inc. is not included in the TID.

LeMire pointed out that Opportunities is a nonprofit organization and, thus, exempt from property taxes.

“We did not include those because, for the most part, they are taking up the majority of the space on the parcels already,” LeMire said of the Opportunities buildings. “So there’s not a lot of space for additional development and there’s not increment that would be added because those parcels are tax-exempt.”

Abendroth voiced concern about the city shouldering more and more debt.

LeMire noted that this is a project plan, so items are things that might be possible in the future, depending on development, but not written in stone. There are several financing options for projects that advance, among them borrowing, with revenue from the TID paying back the debt and interest over 27 years.

“That’s a long time to be paying interest,” Abendroth said.

He also addressed his own property.

“My wife and I do not feel our property is blighted. We would like to get it removed from this district. We have lived there for over 45 years. Part of the land is wetland …,” he told the commission.

He said the state has said his property cannot have any entrances or driveways off of North Main Street. The rest of it is green area he likened to a “private park.”

“The parcel you are referring to is needed for contiguity for the TID,” LeMire said. “We cannot use the right-of-way to get to other parcels, so that means the road or railroad right-of-way.”

During the commission’s discussion, city engineer and member Andy Selle explained that the Abendroths’ property, which borders North Main and East Cramer streets, must be included in the district.

“The contiguity issue that we noted is that we can’t bring in these parcels to the north through a right-of-way, so we have to have this land in between in order to maintain the continuity,” he said.

Responding to a question by Lescohier, Selle cited Green Bay Packaging and Hoppe North America as the Blackhawk Avenue businesses in question.

Commissioner Jill Kessenich clarified that an environmental corridor could be privately or publicly owned and asked if there is a protection provided by the state so it could not be developed.

LeMire said that due to law, no development can be done on wetlands. 

“Any of these parcels or none of these parcels could be developed in the future,” she stated. “We are creating a district that allows for opportunities for development or redevelopment and allows the city to use Tax Incremental Financing for infrastructure or for development incentives within the district.

“So, it is better to think of this as a whole district versus as just parcel-by-parcel. It is not that we are choosing parcels to develop or redevelop; we are just choosing the Tax Increment District to support future development and redevelopment in the area. Being in a Tax Increment District does not negatively impact property values or any other ownership of a parcel.”

Lescohier asked what impact the owner of a property within a TID might notice over the years.

LeMire said he or she would not notice a difference in a tax rate or tax bill, and it would not change the property’s value. 

“It would provide an opportunity for incentivized development in the future …,” she said.

A motion to approve the plan and TID boundaries was made by member Eric Schultz. This was seconded by Lescohier and unanimously approved.

In other business, the Plan Commission:

• Approved exterior touch-up paint colors for Dude’s Card Shop, 130 N. Main St.

• Approved signage for Fort Transportation, 1600 Janesville Ave., and R&H Services Inc., 710 Highland Ave.

An earlier story including maps and the full TID proposals is here: https://fortatkinsononline.com/part-2-tifs-fort-eyes-new-districts/.