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December 17, 2013 | 04:34 PMWILLIAMS BAY — This is not the first time the village board has contemplated creating a tax increment finance district, said Village Administrator Bob Carlson.
However, this is the most serious the village board has been about it.
On Monday, the village board voted unanimously to request a proposal for a TIF feasibility study from Vandewalle & Associates Inc., Madison.
Should the village decide to proceed with a feasibility study, it would cost $1,500, said Trustee William Duncan, who chairs the board’s building, zoning and ordinance committee.
The feasibility study would be used to determine whether the village should go ahead and create a TIF district.
Size and location of the TIF hasn’t been proposed.
Village President John Marra said the village board wants to look at creating a TIF very carefully. He said the TIF would be used to help the village business district. He said if a TIF district is created, it would include most of the business district.
While there is an active business community in Williams Bay, the village downtown has some vacant and underused sites, in particular the location of the former Kegroom Tavern. The Kegroom burned down more than 10 years ago, leaving behind what is still an empty lot.
The village has also noted that the restaurant at the corner of Geneva and Williams streets has changed operators several times in a matter of a few years.
Past studies and architectural tours of the Williams Bay downtown has noted a lack of streetscaping and deteriorating curb and gutter in some areas.
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Scott Harrington of Vandewalle presented the trustees with an overview of how a TIF district might help the village’s business district during a special village board meeting on Dec. 11.
A TIF district must be a single unit, all parcels must be contiguous, said Harrington. He said a TIF district is a vehicle to pay debt and its purpose is to pay for public improvements and developer incentives.
Harrington said the state allows for seven basic TIF districts: Industrial, mixed use, blighted/conservation, environmental remediation, distressed and severely distressed, and town tourism, agricultural and forestry. Each has its own spending period and life-times that vary from 20 to 27 years.
Harrington made no recommendations but spent time talking about mixed use and blighted/conservation TIFs. He pointed out that “blighted” has legal definitions that do not necessarily mean the properties within it are all rundown or abandoned.
The ultimate test of a TIF district project is “but for,” as in, “but for the TIF district funding, the project would never be done,” Harrington said.
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Should the village decide to create a TIF district, it would take at least 60 days to complete the paperwork and put together a draft plan. Harrington said.
The village would then have to create a TIF district plan or budget, showing what projects the village wants to fund with TIF money.
Harrington said a Joint Review Board would also be created to represent all taxing districts affected by the TIF district. This would include the village, the county, the state, the technical college and the school district.
The review board would approve the TIF district budget. If the village were to change the TIF district boarders or amend its plan, it would have to get approval from the joint review board.
Once created, TIF money could be spent outward to a half mile of the district borders, Harrington said.
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A TIF district is created to generate revenue that will be spent according to a plan and budget developed by the village. The specific goal in most cases is to finance public improvements in “blighted” areas and create opportunities for developers and property owners to invest in private improvements that will further improve the image and value within the district.
Once established, a base value is set for the district.
All taxing districts would collect taxes from the base value.
As the annual valuation within the district increases, the taxes collected on the increase, called the increment, goes to a TIF district fund.
Although managed by the village, the fund would be a segregated account, separate from the village’s general fund.
The fund either pays off the projects directly or pays off loans taken out to pay for projects.
Harrington said a village might adopt an aggressive plan, in which is borrows money up front for projects, counting on the completed projects to generate the increased increment to pay off the loans.
Or a municipality might create a “pay-as-you-go” TIF district, in which the district pays off one project at a time as money comes into the TIF fund.
Duncan indicated the village would consider a “pay-as-you-go” style TIF district.
Among the considerations Harrington left with the village were:
n The process of creating a TIF district is onerous. The number of parcels in a district doesn’t affect the process in the least, so the village should include as many parcels as it deems needs the help of a TIF district plan.
n Most parcels in the TIF district should have development and tax growth potential.
n At least one parcel should have a short-term, significant development potential, to kick off TIF financing.
n The village should determine in advance the types and locations of needed improvements.
n Potential revenues need to cover proposed expenses. Timing of projects and the amount of funding needed are important.
Harrington also told the trustees that a TIF district is a tool, and it does not obligate the village to do anything. He added that the TIF district must be actively managed to achieve the best results.