Town To Test TIF

Error message

  • Notice: Undefined index: taxonomy_term in similarterms_taxonomy_node_get_terms() (line 518 of /home/middleton/www/www/sites/all/modules/similarterms/similarterms.module).
  • Notice: Undefined offset: 0 in similarterms_list() (line 221 of /home/middleton/www/www/sites/all/modules/similarterms/similarterms.module).
  • Notice: Undefined offset: 1 in similarterms_list() (line 222 of /home/middleton/www/www/sites/all/modules/similarterms/similarterms.module).
MTT News Desk's picture
By: 
Kevin Murphy

The Middleton Town Board is considering creating a tax increment financing (TIF) district to attract redevelopment to a 28-acre portion of the town along Seybold Road.

In a 4-1 vote Monday, with board supervisor Bill Kolar dissenting, the board asked Vierbicher Associates to prepare estimates of the increase in tax base that could result from redevelopment of Seybold Road.

The town can create a Tax Increment District (TID) under state statute or, under its intergovernmental agreement with the City of Madison.

TIDs are often used to attract redevelopment of blighted areas. The several blocks  of Seybold Road between the Beltline Highway and Gammon Road would be considered blighted and qualify for TID financing, according to backers of the plan before the town.

TIDs are public-private ventures that often allow municipalities to borrow money to finance the cost of roads and utility improvements. Developers would repay the cost of the improvements from revenue eventually generated by taxes on the incremental increased value of the property with the TID.

Kolar opposed the TID, saying the risk was too great for a possible payoff that wouldn’t occur for at least 10 years. He added that with no developer interested yet and the property set to become part of the City of Madison in 30 years, why bother?

Attorney Michael Lawton said the agreement with Madison would have to be amended to prevent annexation of a TID before 30 years occurs and a TID would have to be approved by the city and Dane County.

“This isn’t easy,” said Gary Becker, an economic development specialist with Vierbicher Associates.

Lawton called it “an elaborate procedure,” that includes closed session negotiations between the multiple property owners, town and city staffs and public hearings for comment on the proposed TID boundaries and costs.

“It sounds like you’re trying to spark some economic development with the 30 years left in the agreement with Madison,” said Lawton.

Upfront costs to the town include engineering, planning, surveying, infrastructure and bond insurance, said Becker. A developer may even ask the town to help with the cost of the property, as lenders have been more reluctant to give developers financing, he said.

Board supervisor Tim Roehl compared the Seybold Road site to the TID the City of Middleton created for the Tribeca Village neighborhood. That TIF initially included raw land north of Airport Road but also snakes down to Allen Boulevard, too. (The City of Middleton currently has two open TIF districts.)

Seybold is valued at about $20 million, said Roehl. The city hopes Tribeca’s value will someday approach  $280 million. (The Tribeca project stalled for several years but development activity at the site is currently taking place.)

“It’s still a lot of work and risk for a 10-year payback benefit” before the land becomes part of Madison, said Kolar.

“This is a better location than Tribeca, it could be a $300 million development; … you need numbers to show you how this would make sense,” Roehl responded.

Also, increasing the town’s tax base through new construction is the only way to increase the levy limits on the town, said Roehl.

The town taxes property approximately at $2 per $1,000 assessed value, said Roehl. Even a $180 million Seybold TID would generate $360,000 for the town over its lifetime, which equals what the town receives annually from the construction of 24 homes, he said.

Towns have had difficulty in making rural TIDs work because town tax revenues are low compared to school districts and other taxing entities, said Lawton.

Town chairman Milo Breunig asked: What if the town spent the money to create a TID but no developer was interested?

Extensions to the payback period are possible and the town could use other revenue to pay a failing TID’s cost, said Lawton.

Discussion of a possible TID seemed stalled until town engineer Rod Zubella said no redevelopment along Seybold Roard would require the town alone to fund reconstruction of the deteriorating street.

Deputy town clerk Sara Ludtke said Madison is “not going to take [Seybold] the way it is now.”

Breunig then said, “let’s get the numbers and see if it’s reasonable to go forward.”

Rate this article: 
No votes yet