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Approval stalled on new Germantown TIF

May 27, 2014

Germantown — A decision on whether or not Germantown will have a new tax-incremental financing district has been delayed.

In spite of the the ongoing interest from industrial companies in the proposed TIF, the representatives from the taxing entities on the Joint Review Board on May 22 opted against putting their stamp of approval on the project plan for the new district, located in a 192-acre triangle encompassed by Appleton Avenue and Maple and Lannon roads.

The 3-2 JRB vote to delay a decision followed lengthy discussions by members of the Germantown school and village boards on May 19. The village board approved the plan with an 8-1 vote, with trustee Art Zabel voting "no" based on concerns about the potential for expenses to outweigh development.

The school board did not change its stance on May 19, but ultimately it was school district representative and Director of Business and Auxilliary Services Ric Erickson who made the motion to stall a decision. Citizen representative Dan Wing, who at the May 19 school board meeting made a presentation urging board members to do more research on the effect of a TIF on a school district, also voted to delay the decision.

Al Shoreibah from Milwaukee Area Technical College was the final vote to delay, leaving Village Board President Dean Wolter and Washington County representative Tim Michalak as the two voting against stalling the decision.

Late hours

The school board reviewed its stance after a lengthy conversation that involved Wing and representatives from the village, but did not at that time rescind its support for the TIF. The meeting went late into the evening, which School Board President Robert Soderberg said contributed to the discussion ending as it did that night.

Apart from school district concerns, members of the village board asked a lot of questions regarding the financing within the plan.

"To do it the way this is laid out, it is so tight and if something goes wrong, I think it's not going to work," said Zabel.

He was not alone in his commentary, particularly as it pertains to the need for improvements on Appleton Avenue and negotiations to purchase land within the district currently owned by the Wisconsin Department of Transportation. Trustee Al Vanderheiden also voiced concerns, along with plan commissioner Tom Stauffacher, who has been against the idea since the start.

No room for error

"Everything has to work," said Stauffacher, who voted against the plan at the Plan Commission meeting in April. "I'm very conservative and maybe that's part of the problem, but I would say on a scale of 1 to 10, 10 being the most risky, this is an 8. I'm not opposed to TIF, but the numbers scare me."

TIF is a mechanism that allows municipalities to borrow money to fund infrastructure improvements for an area that otherwise would be difficult to develop or redevelop. The increased property tax revenue from the improved land is then diverted from the tax roll to pay off the loan.

"There is always a component of gamble ... we have the ability to plan for it and only put out for the costs for those that come," said Village President Dean Wolter. "We are managing it based on the growth. We are not putting in the infrastructure and waiting for it to come. Those are lessons we've learned from, especially, TIF No. 4."

TIF No. 4, which contains the Germantown Industrial Park, struggled for several years before things started to turn around in 2010. Now the park only has three small parcels remaining, which Village Administrator David Schornack said demonstrates the need for the creation of TIF No. 6.

The plan proposes almost $10 million in infrastructure improvements, but Schornack said phasing of these improvements makes the TIF a win-win situation for the village.

Looking at the risk

"This board is very conservative and very watchful, but this risk is very well managed… this is going to work," he said, reminding the board that the plan projects a resulting $38 million in private development. "To me we don't have a choice. If we want to keep growing we've got to do this."

Two such businesses include Ultra Tool and Manufacturing, Inc., of Menomonee Falls, and Machining Concepts, Inc., of Cedarburg. Both presented plans to relocate to Germantown to the Plan Commission earlier this month, the latest in a slew of companies wishing to move into village.

Ultra Tool is moving forward with its plans to remodel and expand Forrer Supply's former 41,800-square-foot headquarters on McCormick Drive into a 84,820-square-foot facility that will employ about 100 people and allow room for future expansion.

Meanwhile, Machining Concepts is planning to double the size of its current facility in Cedarburg, building a 32,000-square-foot building on 8.4 acres at the northwest corner of Maple and Freistadt roads.

"We have the momentum," said MLG Realtor Barry Chavin, an agent for the industrial park. "We are the go-to community right now. We have the need, but we don't have the product."

NEXT STEP

WHAT: reconsideration of support of TIF No. 6 by the Germantown School Board

WHEN: 7 p.m. Monday, June 9

WHERE: district administrative offices, W13840 Donges Bay Road

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