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West Allis debates how to handle debt from redevelopments

Feb. 1, 2013

West Allis - A proposal to transfer funds from one special taxing redevelopment district that is doing well to two others that are not hasn't exactly built a solid foundation with the city's elected officials.

Based on the resistance it faced this week before the Community Development Authority, the proposal was expected to again raise a debate before the Common Council about whether the money should instead be used entirely for property tax relief.

The council meets Tuesday, when the issue is expected to be discussed.

All about taxes either way

Although the CDA passed the plan on a narrow 4-3 vote, those voting against generally favored putting all of the money toward property tax relief instead. The proposal does call for $255,000 in tax relief, but those voting against said it wasn't enough.

"Give it to the people who paid the taxes. All of it," said Alderman Dan Roadt, speaking from the audience at the CDA's Jan. 29 meeting.

Supporters of the plan argued that using the money to pay more of the debt generated by those two lagging redevelopment areas is a wise conservative move to avoid any financial trouble down the road.

"We need to be safe," said Alderman Gary Barczak, who serves on the CDA. "This makes all the sense in the world."

Others, including aldermen Michael May and Michael Czaplewski, favored a middle course: helping one redevelopment area out but giving the money earmarked for the other to taxpayers, instead.

Whatever tax relief is given would not go to taxpayers directly. It would be shared with the schools, Milwaukee County, the Milwaukee Metropolitan Sewerage District and MATC, all tax-levying jurisdictions that individually would determine how to use the tax revenue.

The districts involved

The special taxing area - known as a tax incremental financing district (see sidebar story) - that is doing well is the home of Quad/Graphics, which built a $12.5 million printing facility on the site of the former Kearney & Trecker Corp. on Highway 100 and Theo Trecker Way.

Quad/Graphics will pay off the debt this year, but there is extra money remaining in the TIF district.

City planners propose using $1.4 million of those excess funds to pay down the debt in the 11-acre lime pit TIF at 1960 S. 67th Place, labeled as TIF 6, and using $1.3 million for the debt involving the redevelopment of the Six Points area, labeled as TIF 5.

The TIF 6 area is now known as the 67th Place Research Park in the Juneau Highland neighborhood. This is the TIF district that should get the money, some aldermen said. Although ready for redevelopment, the economy falling on rough times has made redevelopment an uphill fight. The site is currently vacant.

TIF 5, by comparison, has already attracted major redevelopment, though it still has a way to go to full build-out. It includes the mixed use condominium and retail space built along Greenfield Avenue in recent years.

Bringing down debt

Currently, the city is helping pay debt service on both TIFs 6 and 5 until more development takes place and they become self-sustaining, said Patrick Schloss, community development manager. Self-sustaining would mean that property taxes on the new development are enough to cover annual debt payments.

But rather than using excess funds to reduce the debt on both, May, speaking from the audience at the CDA meeting, suggested a different strategy.

The city can get TIF 6 in better shape and then reassess TIF 5 area in a couple of years, May suggested. Meanwhile, taxpayers could get the money that would have gone to that other TIF district, he said.

How the city ultimately determines to use the excess funds from the Quad Graphics TIF district will be up to the entire Common Council.

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