Hortonville considers TID expansion
By John Faucher
Hortonville continues to explore options for expanding and creating additional Tax Incremental Districts within the village.
Village Administrator Diane Wessel and Village President Traci Martens brought board members up to speed on their progress at the board’s Dec. 1 meeting.
“As you know we’ve been moving forward with potential TID developments, and now we’ve come to a crossroads where we need the blessing from the village board to continue moving forward,” said Wessel.
Martens reported that Clem Sofranek of MSA Professional Services attended the Nov. 21 Economic Development Committee meeting to present information on TID development.
“It was very helpful and encouraging,” said Martens. Sofranek told the committee that the village had room for TID development and amendment under the current rules governing TID development. However, he said the current rules would change Aug. 1, 2017.
According to the Wisconsin Department of Revenue, a TID is a geographic area within the municipality consisting solely of whole property units assessed for general property tax purposes.
TIDs are declared and developed under municipal resolution where projects are indentified to encourage and facilitate the desired development.
TIDs allow municipalities to use Tax Incremental Financing as a financing tool available to encourage economic development that would not occur without public assistance. Creation of TIDs is a partnership between the taxing jurisdictions that allow municipalities to invest in infrastructure and other project improvements.
The investments are funded by collecting property tax revenue from the newly developed property. As the values rise, the property tax paid on the development is used to pay for the eligible project costs.
After the costs are paid off, the TID is closed and the municipality, school, county and technical college shares the whole value of the expanded tax base.
Wessel passed out a map with six areas highlighted for potential TID development. There were two areas highlighted on the village’s west side, one downtown, another south along County Trunk M and the Wiowaush Recreational Trail, and two on the east side between Nash Street and State Highway 15.
“We are on somewhat of a time crunch because the law set a maximum of 12 percent of a community’s assessed value that can be included in a TIF,” said Wessel. “Ours right now is at 9.5 percent, so we want to make use of this tool while we still can.”
Wessel said some of the areas highlighted on the map were areas where the village anticipates growth and others are areas where the village wants to encourage and stimulate growth where there currently is not growth happening.
She said one such area is a smaller parcel located between Main Street and Michael Ritger Street on the village’s west side behind Charlie’s Drive-In.
“That was is one that has kind of pushed our time frame up even further,” said Wessel.
She told the board of an interested developer that would be attracted to build if that parcel were located in a TID, and she said Commonwealth Development Corporation would be applying for state tax credits in order to build the development.
Wessel said the deadline for applying for those credits is the end of February.
“We’re looking for approval from the board directing Carl [McCrary, Public Works Director] and I to work with MSA, Ehlers Financial and the developer to put together a draft incentive package for the development, with the condition it would be in a TID,” said Wessel.
The developer also asked for a letter of commitment from the village that can be used as part of its application for tax credit.
Wessel said any incentives would be minimal and not involve any cash capital outlay. Improvements to the parcel would include work on roads, utilities and infrastructure only.
“It’s all stuff we wanted to do anyway,” said Wessel.
“We’re looking for creative ways to get stuff done, and this is a creative way,” said McCrary.
Martens said the parcel the developer is interested in is already zoned properly for the proposed development, and by putting it back into the TID, the village would lose the tax liability of the street and infrastructure improvements. “It would be on the TID,” she told board members.
“We gain the control that we didn’t have before and we don’t have the financial liability,” said Martens.
Wessel said the proposed development would include 40 affordable housing units, 10-cottage style and one three-story apartment building.
The developer anticipates 25 percent of the units would consist of seniors, 15 percent would be market value rentals and the others affordable housing units. The developer would use WHEDA credits for its proposed developments.
Wessel noted that there is a “big difference” between affordable housing developments and “low income” housing.
“They are not to be mistaken,” she said.
According to the Landlord Protection Agency (LPA), affordable housing would be for tenants who earn three to four times the rent amount in income, therefore the rent they are paying is affordable to them.
According to Affordable Housing Online, the U.S. government regards housing costs at or below 30 percent of one’s income to be affordable.
Low-income housing would more likely involve renters who barely make two times their monthly rent in income.
The board gave Wessel and McCrary authorization to continue working with consultants and the developer on draft letter of commitment, and encouraged continuing the work on TID development.
At the Dec. 8 board meeting, Wessel said staff continues to work on a letter of commitment for the developer, and she hoped to have a draft ready for the board soon.