#5 Project plan for TIF #34 at Southern Wisconsin Regional Airport (File Res. #2009-596)Economic Development Memorandum
Date: May 4, 2009
TO: Janesville City Council
FROM: Doug Venable, Director of Economic Development
SUBJECT: Action on a Proposed Resolution Re-Approving the Project Plan for and
Establishing the Boundaries for Tax Increment Finance District No. 34 at the
Southern Wisconsin Regional Airport (File Res. No. 2009- 596)
I. Summary
The City Council adopted Resolution 2009 – 577 approving the creation of and
setting the boundaries for TIF No. 34. In preparing documentation for submission to the
Wisconsin Department of Revenue, Staff discovered that the required Class 2 notice of
the Plan Commission public hearing was not properly published. Therefore, proper
notice was published and a second public hearing was held.
II. Recommendation
The Plan Commission held a second public hearing on the proposed TIF No. 34
Project Plan at their April 20, 2009 meeting. The Plan Commission found TIF No. 34 to
be consistent with City plans and recommended that the Council adopt the Project Plan
for TIF No. 34
Staff recommends that the City Council adopt Resolution No. 2009 – 596,
reapproving the Project Plan and establishing the boundaries of TIF No. 34 at the
Southern Wisconsin Regional Airport. If the Council approves the creation of TIF No. 34,
then the Project Plan will go to a Joint Review Board for consideration and approval
before going to the Wisconsin Department of Revenue for certification.
III. City Manager Recommendation
The City Manager concurs with staff’s recommendation.
IV. TIF No. 34 Description
TIF No. 34 will be an industrial TIF district designed to stimulate the development
of aviation related companies at the Southern Wisconsin Regional Airport. The land
within the TIF District is owned by Rock County and leased to companies that maintain
businesses that require access to airport facilities. When the Airport annexation became
effective in 2007, it created the opportunity for the City to use TIF development incentives
to stimulate additional airport related investments.
TIF No. 34
May 4, 2009
Page 2
While no specific development proposals are pending at this time, it is hoped that
the possibility of TIF incentives will encourage existing companies to expand operations
and will support marketing efforts to attract new businesses to the area. The expenditure
of any TIF funds would be linked to a specific development agreement where the
company receiving the assistance, guarantees the property value and tax increments the
City will need in order to recover its TIF costs.
The Project Plan includes funding for the marketing of the Airport to aviation-
related businesses. TIF funding for development incentives in support of new
businesses and/or business expansions is also included. The Plan also provides funding
for transportation improvements along USH 51 as needed to improve traffic safety.
The Project Plan also provides for the use of TIF incremental revenues on projects
located within ½ mile of the proposed TIF District. This type of expenditure is allowed by
a recent change to the TIF law and is designed to provide a mechanism for using TIF
funds to support development projects along the east side of USH 51 as these properties
annex to the City.
The total estimated cost of TIF Projects is $892,000. Interest charges and
financing costs will add an estimated $250,485 bringing the total anticipated TIF
expenditures to $1,142,485. The TIF Project Plan anticipates that between 2009 and
2016, $4,500,000 in new incremental property value can be created by the successful
development of properties within the TIF district. This new value is projected to generate
$1,470,363 in new property tax revenue over the 20-year life of the TIF District, exceeding
TIF costs by $327,878 (See Page 17).
The TIF No. 34 Project Plan is a planning document and does not commit the City
to implement any of the projects set forth in the Plan. As is the Council’s policy, the
expenditure of any TIF funds would be linked to a specific development agreement where
the property owner guarantees the property value and tax increments the City will need in
order to recover its TIF costs.
V. Development Potential
The proposed boundary for TIF No. 34 includes three main areas on the Airport
property where future development projects may occur. The City has had discussions
with a two existing companies that may expand in the future as the economy improves.
The County owns several lots along USH 51 where new aviation related companies could
locate facilities.
The large capital investment that the taxpayers have made in the Southern
Wisconsin Regional Airport has resulted in an excellent facility that should be attractive to
firms that need direct access to airport facilities. Developing this resource is one
component in the strategy to diversify the area economy.
Economic Development Department ? 18 N. Jackson St. ? Janesville, WI ? 53547-5005 ? 608-755-3181
TIF No. 34
May 4, 2009
Page 3
Staff recommends that the Council adopt Resolution 2009 - 596 re-approving the
Project Plan and establishing the boundaries for TIF No. 34.
Douglas Venable
Attachments: Resolution 2009 - 596
Planning Dept. Report
TIF No. 34 Project Plan
Cc Jacob Winzenz
Eric Levitt
Economic Development Department ? 18 N. Jackson St. ? Janesville, WI ? 53547-5005 ? 608-755-3181
Community Development Department Memorandum
May 4, 2009
TO: Janesville City Council
FROM: Al Hulick, Development Specialist
SUBJECT: Creation of TIF District 34, Designation of District Boundaries and
Adoption of Project Plan.
RECOMMENDATION
The Plan Commission and Community Development Department recommend
that following a public hearing, the City Council support a motion to approve the
creation of TIF 34 along with the designation of the district boundary and
adoption of the Project Plan.
SUGGESTED MOTION
To designate the boundaries and adopt the project plan for the creation of TIF 34
REQUEST
One of the City’s development strategies is to diversify the local economy. The
Southern Wisconsin Regional Airport is a key part of the area’s transportation
infrastructure and is a definite asset to those types of companies that rely on air
transportation. When the annexation of the airport to the City became effective
in 2007, the use of tax incremental financing to stimulate development projects at
the airport became possible.
The new redevelopment TIF District will include the developable land at the
airport north, east, and south of the existing runways. The land is owned by
Rock County and leased to private aviation-related businesses. While the land is
tax exempt, the private business hangars are taxable as personal property. The
proposed TIF District is being created to stimulate continued development of
aviation-related businesses in this area. While no specific development
proposals are pending at this time, it is hoped that the possibility of TIF incentives
will encourage existing businesses to expand and attract new company facilities
within the TIF district.
The expenditure of any TIF funds would be linked to a specific development
agreement where the business owner guarantees the property value and tax
increments the City will need in order to recover its TIF costs.
State law requires that prior to the creation of a Tax Increment Finance District
and approval of project plans, the Plan Commission must hold a public hearing.
Following the Plan Commission hearing, the Commission will be asked to
forward a recommendation on the creation of the TIF District and its designated
boundaries to the City Council and then adopt the district’s project plan.
BACKGROUND
On February 16, 2009 the Plan Commission held a public hearing and
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unanimously recommended approval of TIF District 34. On March 9 the City
Council adopted the Project Plan and boundaries for TIF 34. Following that
action, staff determined that the public hearing notice as submitted by the City
and required under state law did not get published. Consequently, the Plan
Commission and City Council will both need to hold another public hearing and
take action on this matter to satisfy the statutory requirements for the creation of
TIF 34. Review and approval actions by the Joint Board of review for TIF 34 will
be required again. The boundaries for TIF 34 and Project Plan included in this
review remain unchanged from the previous approval. The Project Plan has not
been attached to this report but copies are available in the Community
Development Department if the Commission would like to review.
ANALYSIS
A. Function of TIF District:
State Statutes allow cities to create TIF
Districts for industrial development, downtown redevelopment and blight
elimination, and to stimulate and support mixed-use redevelopment. TIF
allows cities to recapture the upfront costs of public improvements (e.g.
land acquisitions, transportation and utility improvements) from property
taxes created by new development in a TIF District occurring as a result of
improvements. Once all public expenditures have been repaid by the “tax
increment” from new development, the TIF District is dissolved and all of
the taxing jurisdictions can collect taxes levied on the new property value
created.
B. TIF 34 Boundary Review:
Part of the process for the creation of a new
TIF District involves review and approval of the TIF by a Joint Review
Committee which is comprised of representatives from the school district,
County, Vo-tech district and the City. The Joint Review Board had an
opportunity to review the proposed project plan on February 11, 2009.
Wisconsin Statutes provide that the City may propose an amendment to
the TIF boundaries up to 4 times over the life of the TIF district.
Therefore, if a project were to come forward in immediately surrounding
area not currently included in the Project Plan boundaries, the City could
propose an amendment to the TIF 34 boundary to include the
redevelopment site.
C. Location of TIF 34:
Proposed TIF 34 is being created to stimulate
continued development at the Southern Wisconsin Regional Airport
located on the far south side of Janesville. The proposed TIF District is
predominately zoned and used for industrial airport related purposes. The
land included with in the proposed TIF District is zoned M1-Light Industrial
and A-Agricultural.
D. Purpose of TIF 34:
The attached Project Plan describes TIF 34
expenditures and development. The project plan for TIF 34 has been
created to stimulate continued development at the Southern Wisconsin
Regional Airport. The airport is currently home to several small
businesses that are related to the aviation industry. Rock County owns
additional land at the airport that can be leased for new development and
expansion projects. Although the land is owned by Rock County and is
subsequently tax exempt, the building improvements on the leased lots
are taxable as personal property. The proposed Project Plan includes
activities to provide appropriate development incentives to encourage the
retention and growth of existing employers, to attract new industrial
businesses and to improve the infrastructure serving this developing area.
The implementation of the Project Plan will increase property values in the
area as development occurs and help create and retain jobs in this area.
City staff has had discussions with several developers regarding projects
within the proposed TIF 34, though none have committed to any specific
development proposal at this time.
E. Appropriateness of Project Plan:
The attached Project Plan is
economically feasible and serves as the appropriate guide for
development in this area. The proposed TIF District Project Plan is
intended to capture increases in valuation resulting from renovation and
redevelopment and in turn use the increase in tax increments to pay for
public improvements and potential blight elimination activities within the
TIF District. Public improvements will be linked to private development
within TIF 34 with increases in property value sufficient to generate the
property tax increment needed to cover the cost of public improvements
within 10 to 15 years. State law allows a redevelopment TIF District to
have a maximum life of 20 years. Planned projects are based on
dissolving the TIF District within year 18 of the Plan, or 2026. This
approach allows for a two-year cushion in case future revenues fall short
of projections.
F. Appropriateness of Proposed Boundary:
The City of Janesville is
proposing to create TIF No. 34 to support continued airport related
development at the Southern Wisconsin Regional Airport along US
Highway 51 on the City’s far south side. The TIF District includes land to
the north, east, and south of the Airport. While there may be an
opportunity to develop other industrial uses east of USH 51, this land is
currently located in the Town of Rock. The Project Plan includes
language that would allow the expenditure of TIF funds on projects located
within ½ mile of the TIF No. 34 boundary. If the land along the east side
of USH 51 is annexed to the City for a new development project, the City
could then use TIF funds to provide development incentives within this ½
mile area or amend the TIF boundary.
G. Consistency with City Plans:
The proposed TIF District is consistent
with City plans and policies including the City’s Zoning Ordinance, Growth
Concept Plan, draft Comprehensive Plan Update, and General
Development Plan.
The Project Plan for TIF 34 includes the following objectives:
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Promote industry retention and expansion through the continued
development of an existing industrial area, thereby retaining jobs
and increasing the tax base.
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Provide appropriate financial incentives to encourage industrial
expansion both for development projects located within TIF no. 34
and for projects located in the City of Janesville and within ½ mile
of TIF No. 34.
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Help to diversify the economic base of the community by utilizing
the Southern Wisconsin Regional Airport to attract aviation related
businesses.
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Reduce the financial risk to the taxpayer by timing implementation
of the Project Plan with the creation of additional property value
through industry expansions and negotiating development
agreements with tax guarantees for specific projects.
?
Generate sufficient new property tax increments from each specific
development project within the TIF District to fully repay the City’s
TIF project expenditures associated with the development project.
H.
The Community Development Department finds the proposed TIF District
No. 34 consistent with the goals and objectives of established City plans.
The Project Plan allocates monies for land acquisition and site
improvements in support of redevelopment projects. The types of projects
contemplated for redevelopment in this district are appropriate and should
compliment this area.
IV. PLAN COMMISSION ACTION – 20 April 2009
Al Hulick, Development Specialist, presented the staff report.
The public hearing was opened and no one appeared to speak on this
item. The public hearing was closed.
There was a motion by Commissioner Voskuil with a second by
Commissioner Zolidis to approve Resolution No. 2009-02 and forward the
creation of TIF District 34 to the City Council with a favorable
recommendation.
The motion carried on a 5-0-0 vote.
TAX INCREMENT FINANCE DISTRICT No. 34
PROJECT PLAN
May 11, 2009
Prepared By:
Economic Development Agency
Finance Division
City of Janesville, Wisconsin
18 N. Jackson St.
Janesville, WI 53545
CITY OF JANESVILLE
TAX INCREMENT FINANCE DISTRICT No. 34
TABLE OF CONTENTS
I. WISCONSIN TAX INCREMENT LAW AND PROCESS .................... 1
II. PURPOSE AND OBJECTIVES ..................................................... 2
III. BOUNDARIES OF TIF No. 34 .................................................... 3
IV. EXISTING ZONING AND PROPOSED LAND USES ........................ 5
V. PROPOSED TIF PUBLIC WORKS PROJECTS AND ....................... 8
IMPROVEMENTS
VI. DETAILED LIST OF ESTIMATED PROJECT COSTS ......................13
VII. ECONOMIC FEASIBILITY AND METHODS OF FINANCING ...........15
VIII. PROPOSED CHANGES IN ORDINANCES, CODES, & PLANS .......19
IX. LIST OF ESTIMATED NON-PROJECT COSTS ................................20
X. METHODS FOR RELOCATION OF DISPLACED PERSONS ...........20
XI. PROMOTION OF THE ORDERLY DEVELOPMENT OF .................20
THE CITY
MAPS
1. Map 1 TIF No. 34 Boundary Map ……………. .................................. 4
2. Map 2 TIF No. 34 Zoning ..................................................... 7
3. Map 3 TIF No. 34 Existing Conditions and Land Use ....................... 8
4. Map 4 TIF No. 34 Proposed Improvements .......................................11
5. Map 5 TIF No. 34 Property Within ½ Mile of Boundary ....................12
LEGAL AND PROCEDURAL
1. Legal Opinion From City Attorney on Project Plan
2. TIF No. 34 Plan Adoption and Creation Resolutions
3. Joint Review Board Resolution
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City of Janesville
Tax Increment Finance District No. 34
Project Plan
WISCONSIN TAX INCREMENT LAW AND PROCESS
I.
In the Legislative Declaration that accompanied Wisconsin's Tax Increment Law
(section 66.1105), the Legislature found that the, "accomplishment of the vital and
beneficial public purposes of (the promotion of industry) Section 66.1101 is being
frustrated because of a lack of incentives and financial resources. Consequently, in
1975 the Legislature enacted Wisconsin's Tax Increment Law, "to create a viable
procedure by which a city or village, through its own initiative and efforts, may finance
projects which tend to accomplish these laudable objectives."
The Tax Increment Finance District Law allows a community to use the property
taxes generated by new development within a TIF district to pay for the costs of the
public improvements needed to stimulate the new development. Fundamental to the
TIF law is the concept that new development will benefit a taxing area broader than the
municipality in which the development occurs. However, an inequity occurs because
the community must finance the entire cost of public improvements needed to facilitate
the development, while receiving only a portion of the total taxes generated from the
development. The TIF law recognizes that without the city-financed improvements, the
development would not have occurred.
Thus, the TIF law provides that all property taxes levied on increased property
value in a TIF district are retained by the community to finance the costs of
improvements within the TIF district. The property value existing at the time of the
creation of a TIF district (base value) continues to provide the same level of property
tax revenues to other overlying taxing jurisdictions. Once all of the TIF improvement
costs have been repaid, the TIF district is dissolved and all taxing jurisdictions can
collect taxes levied on the new property value created within the TIF district.
State statutes are very specific as to how a TIF district is created. First, a TIF
Project Plan containing the information required in Wisconsin Statutes 66.1105 (4)(f) is
developed and presented to the City Council. Notice is sent to chief executive officers
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of all affected taxing jurisdictions informing them of the proposed TIF Project Plan and
the required public hearing. Next, the Council refers the proposed TIF Project Plan to
the Planning Commission for a formal public hearing. The Commission makes a
recommendation on the TIF Project Plan to the City Council. The Council then must
pass a resolution adopting the TIF Project Plan and establishing the TIF boundaries.
Finally, a Joint Review Board is created with members from the City, school district,
county, vo-tech district, and one member-at-large. The Joint Review Board reviews the
TIF Project Plan and public hearing comments and approves the creation of the TIF
district.
This document will meet the statutory requirements for a Project Plan for Tax
Increment Finance District No. 34.
II. PURPOSE AND OBJECTIVES
TIF No. 34 is being created to stimulate continued industrial development at the
Southern Wisconsin Regional Airport. With the closing of production at the General
Motors plant, the City needs to become more aggressive in seeking to diversify the
local economy. The Airport is currently home to several small businesses that are
related to the aviation industry. Rock County owns additional land at the Airport that
can be leased for new development and expansion projects. In today’s competitive
development environment, TIF incentives are often needed to retain existing
businesses and facilitate their growth. Similarly, development incentives are generally
expected by new companies looking to site a new facility.
The TIF District includes the existing businesses and developable land to the
north, east, and south of the Southern Wisconsin Regional Airport. While there may
be an opportunity to develop other industrial uses east of USH 51, this land is currently
located in the Town of Rock. The Project Plan includes language that would allow the
expenditure of TIF funds on projects located within ½ mile of the TIF No. 34 boundary.
If the land along the east side of USH 51 is annexed to the City for a new development
project, the City could use TIF No. 34 funds to provide development incentives within
this ½ mile area surrounding TIF No. 34, or could amend the boundary of TIF No. 34 to
include the development project.
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The TIF Project Plan will include activities to provide appropriate development
incentives to encourage the retention and growth of existing employers, to attract new
industrial businesses and to improve the infrastructure serving this developing area.
The implementation of the Project Plan will increase property values in the area as
development projects occur and help create and retain jobs in the area. TIF No. 34 will
advance the City of Janesville's development objectives and specifically will:
A. Promote industry retention and expansion through the continued
development of an existing industrial area, thereby retaining jobs and
increasing tax base.
B. Provide appropriate financial incentives to encourage industrial expansion
both for development projects located within TIF No. 34 and for projects
located in the City of Janesville and within ½ mile of TIF No. 34.
C. Help to diversify the economic base of the community by utilizing the
Southern Wisconsin Regional Airport to attract aviation related
businesses.
D. Reduce the financial risk to the taxpayer by timing the implementation of
the Project Plan with the creation of additional property value through
industry expansions and negotiating development agreements with tax
guarantees for specific projects.
E. Generate sufficient new property tax increments from each specific
development project within the TIF District to fully repay the City's TIF
project expenditures associated with the development project.
BOUNDARIES OF TIF No. 34
III.
A tract of land located in Section 23-2-12; in the Northwest ¼ of Section
26-2-12; and in the Northeast ¼ of Section 26-2-12, in the City of Janesville, Rock
County, Wisconsin, whose boundaries are shown on the attached Map 1 and described
as follows:
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Beginning at the Northwest corner of the NW ¼ of said Section 26; thence
o
S030’30.46”E, 1724.80 feet along the West line of said NW ¼; thence
oo
N3254’22”E, 437.09 feet; thence N6855’42”E, 748.41 feet; thence
oo
S4914’24”E, 476.11 feet; thence N4134’34”E, 862.07 feet; thence
oo
N4008’05”E, 194.71 feet; thence N4855’10”W, 46.74 feet; thence
o
N4104’50”E, 546.98 feet; thence along the arc of a curve to the right whose
o
radius is 135.00 feet and whose chord bears N8736’25”E, with a chord length of
o
195.94 feet; thence S4552’00”E, 1301.03 feet; thence along the arc of a curve
o
to the left whose radius is 690.00 feet and whose chord bears S6744’35”E, with
o
a chord length of 514.19 feet; thence S8937’10”E, 690.08 feet; thence
oo
S020’18”E, 119.54 feet; thence N8955’39’76”E, 575.72 feet to the West Right
o
of Way line of US Hwy 51; thence continuing N8955’39”E, 168.42 feet to the
East right-of-way line of US Highway 51; thence in a Northerly direction along
the East right-of-way line of US Highway 51approximately 4048 feet to its
intersection with the North right-of-way line of Enterprise Dr.; thence in a
Westerly direction approximately 107 feet to the Northwest intersection of the
North right-of-way line of Enterprise Dr. and the East right-of-way line of US
Highway 51; thence in a Northerly direction along the Easterly right-of-way line
of the original US Highway 51 approximately 2610 feet to its intersection with the
North Line of Section 23, T.2N., R.12E.; thence in a Westerly direction along the
North Line of said Section 23 approximately 5255 feet to the Northwest Corner
of said Section 23; thence in a Southerly direction along the West line of said
Section 23 approximately 5295 feet to the Southwest Corner of said Section 23,
said Corner also being the Northwest corner of the NW ¼ of Section 26 and the
point of beginning.
EXISTING ZONING AND PROPOSED LAND USES
IV.
The City of Janesville is proposing to create TIF No. 34 to support continued
airport related development at the Southern Wisconsin Regional Airport along US
Highway 51 on the City’s far south side. The proposed TIF District No. 34 contains
769.9.acres of land including two (2) large parcels of tax exempt land totaling 758.7
acres owned by Rock County and used for the Southwest Wisconsin Regional Airport
and 11.2 acres of US Highway 51 street right-of-way. There are 14 parcels of land that
have been leased by Rock County to a variety of airport related businesses that have
been improved with buildings. Since the land owned by Rock County is tax exempt, the
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building improvements on the leased lots are taxed as personal property.
The proposed TIF district is predominately zoned and used for industrial airport
related purposes (See Map 2). The two (2) parcels of land within TIF No. 34 total 757.5
acres of land (99.8%) and are zoned M-1 Light Industrial. A small 1.2 acre (0.2%)
triangular shaped portion of one parcel is zoned A-Agricultural. The City Community
Development Department may initiate a rezoning request to amend the zoning map to
make all of the land within TIF No. 34 zoned M-1 Light Industrial. Such a zoning
change will make the zoning boundary consistent with existing parcel lines and place
all of the Glen Erin Golf Course within the Conservation Zoning District..
Rock County is also developing an Airport Overlay Zoning District plan which will
regulate land uses in proximity to the airport. Land uses permitted under the M-1 Light
Industrial zoning classification will be subject to a further review under the Airport
Overlay Zoning district to ensure compatibility with airport operations. Generally, land
uses closest to the glide path of approaching and departing aircraft are more heavily
regulated.
No major changes are proposed for land uses which are shown on Map 3.
There are three main areas available for airport related development projects within TIF
No. 34 – one 37 acre area north of the main runways; one 70 acre area east of the
main runways; and one 50 acre area south of the main runways. Vacant land within
these areas may be improved with additional roads, water and sewer utilities, parking
areas, and taxiways to accommodate expansion of existing business or construction of
additional airport related companies..
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PROPOSED TIF PROJECTS AND IMPROVEMENTS
V.
The TIF No. 34 Project Plan recognizes that the existing industrial uses located
in this TIF district may need financial incentives and infrastructure upgrades to continue
their growth. Extensions of the internal road network and water/sewer utilities may be
needed to develop vacant land for additional airport related businesses. In addition,
as activity at the Southern Wisconsin Airport increases, transportation improvements
along US Highway 51 such as intersection upgrades to accommodate turning
movements may be needed to improve transportation safety.
TIF transportation improvements and incentives will facilitate development
projects that will increase property values and will generate new tax increments
allowing the City to recover its TIF costs. The type, kind, number, and location of all
proposed improvements proposed for TIF No. 34 are shown on Map 4 - Improvement
Plan.
A. Transportation and Utility Improvements
Transportation improvements may include the extension of internal roads,
taxiways, and paved parking areas to provide access to development sites for both
automobiles and planes. Primary access to the Southern Wisconsin Regional Airport is
provided from US Highway 51. As activity at the Airport increases, deceleration lanes
and intersection improvements may be needed to increase traffic safety.
In addition, new facilities will need to be connected to municipal water and
sewer services and extensions of utility mains may be needed as growth occurs. The
transportation and utility improvements will be phased along with the specific
development projects as needed. The design, engineering, and construction costs will
be included as TIF expenditures.
B. Project Financing and Development Incentives
Where a specific industrial development project has been identified,
project financing and development incentives may be necessary to ‘close the deal’.
Project financing and development incentives may include the direct reimbursement of
specified development costs, below market rate loans, forgivable loans, funding for
9
relocation and unique start-up costs like employee training, and/or similar financing
programs. Financing may go directly to a development project or to capitalize a
revolving loan fund to provide financing assistance for projects throughout the TIF
district. The use of project financing and development incentives will be secured by a
developer agreement with appropriate guarantees for future property value, property
tax payments and job creation to ensure that the cost of the incentive can be recovered
through future property tax increments.
C. Development Projects within ½ Mile
Changes to State Law also allow the expenditure of TIF funds within ½ mile of an
existing TIF boundary. While much of the land within ½ mile of TIF No. 34 is currently
located outside the City of Janesville corporate limits, the City does have a boundary
agreement with the Town of Rock, and land surrounding the airport will be annexed to
the City of Janesville as development occurs. Where industrial development projects
occur on land annexed to the City within this ½ mile boundary, funding from TIF No. 34
may be used to support the development project. If the development project is
contiguous to TIF No. 34, the City may propose a boundary amendment to the TIF
No. 34 Project Plan. The development projects located within ½ mile of proposed TIF
No 34 may need project financing and/or development incentives to maintain
employment levels or to undertake future expansion projects. (See Map 5).
D. Administrative Costs and Marketing Costs
In order to attract development opportunities within TIF No. 34, it may be
necessary to implement a marketing program. Marketing activities may include the
development of brochures, photographs, topography profiles and maps for use with
industry prospects. Marketing may also include architectural and feasibility studies.
Once the marketing materials are available, a direct mail program may be
implemented to attract new aviation related development projects. Marketing activities
may also include the payment of real estate commissions where a private “buyer’s
broker” facilitates a new development in TIF No. 34.
The TIF No. 34 project plan includes the cost incurred for administrative,
professional, organizational, and legal services related to the creation and
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administration of the TIF district. Direct engineering costs shall be charged to the
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specific construction projects within the TIF District. Direct legal and planning costs will
be charged as administrative costs. Finally, the cost of the three TIF audits required
under Wisconsin Statutes ss.66.1105 and the Department of Revenue’s TIF review fee
will be included as TIF project costs.
DETAILED LIST OF ESTIMATED PROJECT COSTS
VI.
In order to determine the economic feasibility of the proposed TIF District No.
34, total project costs must be estimated and compared to the projected tax increments
that will be generated by the new development in the TIF district. Based on 2008
construction costs, TIF No. 34 improvement costs are estimated as follows:
A. Transportation and Utility Improvements $187,500
B. Project Financing & Develop. Incentives $475,000
C. Development Projects within ½ Mile $187,500
D. Administration & Marketing $ 42,000
Total Cost of Improvements $892,000
The estimated cost of TIF expenditures is $892,000. Since the project costs
may be incurred over the first fifteen (15) years of the TIF district, while TIF revenues
will be collected over a maximum of twenty (20) years, the City will have to finance any
negative TIF fund balance through interfund borrowing. Based on conservative
projections, debt service and interfund borrowing will add an additional $250,485 in TIF
financing costs, bringing the total estimated TIF No. 34 project costs to $1,142,485.
All project costs and interfund borrowing estimates are based on the most
current cost data available in January, 2009 and may be adjusted within the total
amount shown without modification or amendment of this TIF No. 34 Project Plan.
All of the TIF No. 34 project costs except debt service and interfund borrowing
will be incurred during the first fifteen years of the TIF District. Table No. 1 shows the
schedule and timing of the proposed expenditures. The actual timing of expenditures
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will be contingent on the commitments from industries expanding their facilities and
guaranteeing a minimum property value that will generate sufficient tax increments over
the life of the TIF district to cover the TIF project costs.
Table No. 1
Tax Increment District No. 34
Summary of TIF Costs By Year
Year Type of Cost Cost
2009 Development Incentives, Administration $110,100
2010 ½ Mile Projects, Marketing & Admin. $ 66,850
2011 Development Incentives, Administration $159,000
2012 Transportation, Utilities, ½ Mile Projects, $ 191,850
Marketing & Administration
2013 Development Incentives, $118,000
Marketing & Administration
2014 ½ mile Projects, Marketing Admin., $63,850
2015 Development Incentives, Administration $115,000
2016 Transportation & Utilities, Administration $67,350
Total Cost of Improvements 892,000
Debt Service and Interfund Borrowing $ 250,485
Total Estimated TIF No. 34 Costs $ 1,142,485
--------------------------------------------------------------------------------------------------------
Prepared By: Economic Development Agency
14
ECONOMIC FEASIBILITY AND METHODS OF FINANCING
VII.
A. Economic Feasibility Analysis
Under Wisconsin's Tax Increment District Law (ss. 66.1105), 100% of the
property taxes levied against new property value created within a TIF district is retained
by the City to pay for improvement costs that were incurred to attract the new
development. Implicit in the law is the concept that without the improvements, the
attraction of new development, the creation of new jobs, and the expansion of the tax
base would not occur.
The Wisconsin TIF law allows the City fifteen (15) years in which to make
the improvements needed to stimulate and support development. The property tax
increments generated by the new development are retained by the City until all TIF
costs are paid, or up to a maximum of five (5) years after the last expenditure is made.
In no case shall the TIF district have a life longer than twenty (20) years.
The City of Janesville's Tax Increment District No. 34 will be created by
Council action in March, 2009. Therefore, all TIF project improvements must be
completed by March, 2024. The taxes on any increased property value in the district
between 2010 and 2028 will be retained by the City to repay the TIF project costs. TIF
No. 34 will be dissolved when all TIF project costs are repaid, or in March, 2028
whichever comes first.
In order to determine the economic feasibility of the proposed TIF district,
estimated TIF costs must be compared to projected TIF property tax increments.
Where tax increments exceed TIF costs over the twenty (20) year life of the TIF district,
the TIF district is considered economically feasible.
The City of Janesville has made conservative assumptions about the
future to determine the economic feasibility of TIF No. 34. All TIF costs related to
development projects are incurred according to the schedule shown in Table No. 1.
TIF property value increases for are shown for development projects that may occur
adding $4,500,000 in new value between 2009 through 2016.
15
The actual pace of development may be different than expected. Where
possible, the expenditure of TIF monies will be phased and linked to known
development projects. The City will enter into binding contracts with the developers
locating projects within TIF No. 34 that will guarantee the minimum amount of
investment needed to fully amortize all TIF costs associated with each project. The
th
overall TIF District should be able to recover all costs by the year 2025, the 17 year
of the TIF district.
The equalized value property tax mill rate levy is projected to increase
2.5% annually due to inflation. This assumption is conservative since equalized
property values have increased an average of 5.35% over the past seven (7) years.
The equalized value mill rate is projected to decrease by 1.0% per year. This too, is a
conservative assumption given the rapid increase in municipal costs for health care
and petroleum, and the increasing cost of debt service for major capital projects.
Based on these assumptions, the $4,500,000 in new property value generated by
development within TIF No. 34 will create sufficient new property tax increments to
repay all planned TIF project costs. The City will limit the implementation of TIF
expenditures until the actual levels of new property value are known and increases in
property tax increments are guaranteed through developer agreements or already
completed projects.
Table 2 shows TIF costs including financing of $1,142,485. If $4,500,000
of new property value is created as projected in Table 2, the TIF district will generate a
total of $1,470,363 in property tax increments over the 20 year life of the district. Since
property tax increments are projected to exceed TIF costs by $327,878 TIF No. 34 is
found to be economically feasible. Projected TIF revenues will cover TIF costs within
17 years and the City projects that TIF No. 34 may be dissolved by 2025.
16
1/22/09JDV
TIF No. 34 - Southwest Wisconsin Regional Airport
City of Janesville
Tax Increment vs. TIF Cost Comparison
Equalized Long Admin.
Const.TotalValueTaxTermDebt & OtherInterfundTIF
YearValueTID ValueMill RateIncrementDebtServiceCapital DirectInterestBalanceYearTIF
Increment ProceedsCostsExpend.CostsCosts Year
2008 - - 0.020583 - - - - - - -2008
2009 - - 0.020377 - 100,000 - 100,000 10,100 -(10,100)20091
2010 750,000 768,750 0.020174 - 62,500 14,000 62,500 4,350 253(28,703)20102
2011 - 787,969 0.019972 15,508 150,000 22,350 150,000 9,000 718(45,263)20113
2012 1,250,000 2,088,9180.019772 15,737 187,500 42,700 187,500 4,350 1,132 (77,707)20124
2013 - 2,141,1410.019574 41,302 112,500 67,700 112,500 5,500 1,943 (111,548)20135
2014 1,250,000 3,475,9190.019379 41,912 62,500 81,450 62,500 1,350 2,789 (155,225)20146
2015 - 3,562,8170.019185 67,359 112,500 87,750 112,500 2,500 3,881 (181,998)20157
2016 1,250,000 4,933,1380.018993 68,352 62,500 100,800 62,500 4,850 4,550 (223,845)20168
2017 - 5,056,4660.018803 93,695 - 106,400 - - 5,596 (242,146)20179
2018 - 5,182,8780.018615 95,077 - 103,000 - - 6,054 (256,123)201810
2019 - 5,312,4500.018429 96,480 - 99,600 - - 6,403 (265,646)201911
2020 - 5,445,2610.018245 97,903 - 86,200 - - 6,641 (260,584)202012
2021 - 5,581,3930.018062 99,347 - 76,950 - - 6,515 (244,703)202113
2022 - 5,720,9280.017882 100,812 - 59,200 - - 6,118 (209,208)202214
2023 - 5,863,9510.017703 102,299 - 38,300 - - 5,230 (150,439)202315
2024 - 6,010,5490.017526 103,808 - 25,650 - - 3,761 (76,042)202416
2025 - 6,160,8130.017350 105,339 - 18,450 - - 1,901 8,946202517
2026 - 6,314,8340.017177 106,893 - 6,500 - - -109,339202618
2027 - 6,472,7040.017005 108,470 - - - - -217,809202719
2028 - 6,634,5220.016835 110,070 - - - - -327,878202820
4,500,000 Totals:$1,470,363 $ 1,037,000 $ 42,000 $ 63,485
Assumptions:
1. Eq. Value Growth1.025
2. Mill Rate Growth :0.99
3. Interfund Cost :0.025Expenditures:AmountYear
4. G.O. Bond Rate :0.04Debt1101002009
Debt668502010
Debt1590002011
Debt1918502012
New Construction Debt1180002013
2009750000Debt638502014
20100Debt1150002015
20111250000Debt673502016
20120 Project Costs892000
20131250000 Interest Costs250485
20140 Total TIF Costs1142485
20151250000
Prepared By: Economic Development Agency
17
B. Methods of Financing
Wisconsin Statutes provide several methods of financing the cost of
improvements in tax increment districts. For smaller amounts, financing through the
general fund may be feasible. Transfers can be made from the municipal general fund
account into the TIF expenditure account to cover the cost of TIF improvements. This
method of financing avoids the interest cost associated with municipal borrowing.
However, since the General Fund balance is
reduced, the General Fund loses interest income, an interfund borrowing cost is
charged to the TIF account.
State law also provides for municipal borrowing. Community borrowing is
divided into two forms -- that subject to a statutory limitation and borrowing not subject
to limitation. Possible funding sources include:
1. General Obligation Borrowing - Is sometimes referred to as a local
promissory note from a bank, State Trust Fund, or other lending
institution. This form of borrowing requires little effort or legal costs
and works well for smaller sums. This sort of borrowing is included
in the municipal borrowing limitation.
2. General Obligation Bonding – Is a irrepealable
property tax obligation of the community. General
obligation bonds can often be sold at lower interest
rates than other forms of borrowing. However, there
are additional regulations and requirements that make
G.O. Bonds suitable for larger projects. G.O. Bonds
are included in the municipal borrowing limitation.
3. Mortgage Revenue Bonds - Are repaid through the revenue
generated by a public utility like a water or sewer utility. Revenue
bonds also have regulatory and legal requirements that make them
suitable for larger project costs. Since revenue bonds do not
pledge the community's taxing capacity, they are not subject to a
municipal borrowing limitation.
4. Federal and State Grant or Loan Programs - Like Community
Development Block Grants or State Transportation aids are
sometimes available to supplement local funding sources.
However, the amount of grant dollars available is limited and state
and federal funding is uncertain given the need to balance budgets.
18
The actual method of financing specific TIF projects will be determined by
the City based on the current fiscal condition of the City, anticipated non-TIF capital
needs, municipal borrowing rates and terms, and the amount of financing needed.
Where general obligation borrowing is used, TIF financing costs have been calculated
assuming financing over ten (10) years, with equal principal payments.
The City will not proceed with any phase of the planned public
improvements until a developer or business is committed to construct a new building or
renovate an existing building with a value sufficient to generate the property tax
increments needed to cover the cost of the improvements. Therefore, the actual City
expenditures in TIF No. 34 may be substantially different.
C. Additional Economic Benefits
The economic feasibility analysis has shown that the property tax
increments will be sufficient to cover all TIF project costs over the twenty (20) year life
of the TIF district. The development of TIF No. 34 will facilitate development projects,
increase property values, and create new jobs in the City of Janesville. These jobs will
help diversify the local economy and the increased payrolls will have a positive
multiplier effect in the trade and service sectors.
PROPOSED CHANGES IN ORDINANCES, CODES, & PLANS
VIII.
The proposed TIF No. 34 project plan is in conformance with the City of
Janesville's present zoning ordinance, with the City's Industrial Development Plan and
the General Development Plan. The proposed Project Plan is also consistent with the
City’s draft 2008 Comprehensive Plan which is going through the public review
process. All development in TIF No. 34 will have to conform to the State Building
Codes and will be subject to the City's permitting and inspection procedures. The
proposed land uses will also have to conform to the planned Airport Overlay Zoning
District. The TIF No. 34 project plan conforms to all relevant State and local
19
ordinances, plans, and codes, thus, no changes to the existing regulations are
proposed or needed.
20
LIST OF ESTIMATED NON-PROJECT COSTS
IX.
All of the public improvements and other project costs included in this project
plan are TIF eligible costs as defined in Wisconsin Statutes ss. 66.1105, the Tax
Increment District Law. Some expenditures are envisioned outside the boundaries of
but within ½ mile of the proposed TIF district. These expenditures are now allowed by
recent changes to Wisconsin’s TIF law. Where possible, the City will use a
combination of federal and state funding sources to construct the planned
transportation improvements. The use of these federal and state funding sources will
reduce the portion of the improvement cost allocated to the TIF district.
METHODS FOR RELOCATION OF DISPLACED PERSONS
X.
The TIF No. 34 Project Plan does plan land acquisition for future industrial site
development. There should not be any displacement of persons or business needing
relocation assistance. If, for any reason, relocation should be necessitated by the
City's involvement in the implementation of this Project Plan, it will be undertaken
pursuant to Wisconsin Statutes Section 32.19 and 33.195, and according to a
Relocation Plan, as approved by the Wisconsin Department of Commerce. Where
federal dollars are used for the planned transportation improvements, federal relocation
laws will be followed as well.
PROMOTION OF THE ORDERLY DEVELOPMENT OF THE CITY
XI.
The creation of TIF No. 34 and the implementation of the projects in the TIF
Project Plan will promote the orderly development of the City of Janesville by
encouraging the expansion of existing industries already served by municipal
transportation and utility infrastructure. Such expansion projects reduce the need to
21
purchase and develop additional farmland into industrial parks.
By promoting development of aviation related industries by the Southern
Wisconsin Regional Airport, the community can more fully realize the benefits of the
investment in the airport infrastructure and increase aviation related activity that will
improve the long term financial stability of this important transportation facility.
By providing financial incentives to stimulate private development projects, the
City is able to ensure that economic growth continues to occur, thus offsetting the
inevitable loss of jobs and incomes when economic conditions force the closure of
other employers in the community.
By utilizing the provisions of the Tax Increment Finance Law, the City can
increase property values through development projects that result in increased tax
base. TIF No. 34 will add to the tax and employment base of the community, and will
generate positive secondary impacts in the community through increased local
disposable incomes.
22
CITY ATTORNEY’S OFFICE MEMORANDUM
April 6, 2009
MEMORANDUM
TO: J. Douglas Venable, Director of Economic Development
FROM: Wald Klimczyk, City Attorney
RE: Legal Opinion -- T.I.F. No. 34 Project Plan
Sec. 66.1105(4)(f), Wis. Stats., of the Tax Increment Financing Law mandates that
the project plan for a proposed tax increment financing district "include an opinion of the
city attorney or an attorney retained by the city advising whether the plan is complete and
complies with this section.” You have asked me to review a certain proposed “Tax
Incremental Finance District No. 34 Project Plan,” dated May 11, 2009, for Tax Increment
Finance (T.I.F.) District Number 34 and determine if, in my opinion, it is complete and
complies with the requirements of Wisconsin's T.I.F. Law. This memorandum constitutes
my legal opinion.
Sec. 66.1105(4)(f), Wis. Stats., sets forth those components of a T.I.F. project plan
which are required by state law. They are as follows:
1. A statement listing the kind, number, and location of all proposed public
works or improvements within the district or, to the extent provided in Section 66.1105(4)(f)
1. k, Wis. Stats., outside the district;
2. An economic feasibility study;
3. A detailed list of estimated project costs;
4. A description of the methods of financing all of the estimated projected costs;
5. The time when the costs or monetary obligations related thereto are to be
incurred;
J. Douglas Venable
April 6, 2009
Page 2
6. A map showing the existing uses and conditions of the real property in the
district;
7. A map showing the proposed improvements and uses in the district;
8. Proposed changes of:
a. Zoning ordinances.
b. The master plan, if any.
c. The master map, if any.
d. Building codes.
e. City ordinances.
9. A list of estimated non-project costs;
10. A statement of proposed methods for the relocation of any person(s) to be
displaced; and
11. How the Tax Increment Financing District promotes the orderly development
of the City.
I have reviewed proposed “Tax Incremental Finance District No. 34 Project Plan,”
dated May 11, 2009, for Tax Increment Finance (T.I.F.) District Number 34, prepared by
the City of Janesville Economic Development Agency and Finance Division. It is my legal
opinion that said project plan as prepared by the Economic Development Agency is
complete and does comply with Section 66.1105(4) (f), Wis. Stats. According to the terms
of the above cited statute, this legal opinion should now become the final component of
that project plan amendment.
Wald Klimczyk
City Attorney
wk
cc: Jean Ann Wulf, City Clerk-Treasurer
Resolution No. 2009 – 596
RESOLUTION RE-APPROVING THE PROJECT PLAN AND CREATING TAX
INCREMENT FINANCE DISTRICT No. 34 WITHIN THE CITY OF JANESVILLE
ROCK COUNTY, WISCONSIN
WHEREAS, the Common Council of the City of Janesville previously adopted
Resolution 2009 – 577 creating Tax Increment Finance District No. 34; and
WHEREAS, the public notice of the Plan Commission Public Hearing was not
published as required by Section 66.1105; therefore, the City needs to re-do the TIF
creation process; and
WHEREAS, the Plan Commission has now held a properly noticed public hearing on
the proposed creation of Tax Increment District No. 34 and the proposed boundaries
thereof, and on the proposed Project Plan for Tax Increment District No. 34 which is
attached hereto by reference; and
WHEREAS, the Chief Executive Officer of Janesville School District, Rock County
Board, Blackhawk Technical College, and the other entities having the power to levy
taxes on the property located within the proposed Tax Increment District No. 34 have
been notified under Section 66.1105 (4) (a) and (e), Wisconsin State Statutes; and
WHEREAS, the Joint Review Board required by Section (4m) of Chapter 66.1105 of
Wisconsin State Statutes has been convened; and
WHEREAS, the City Attorney has determined that the Project Plan for TIF No. 34 is
complete and complies with Wisconsin Statutes; and
WHEREAS, the adoption of the Project Plan and the creation of TIF No. 34 by the City
of Janesville, pursuant to the Tax Increment Law finds that:
A. There is hereby created a Tax Increment District to be known as Tax Increment
District No. 34, in the City of Janesville, as described in the above referenced and
herein incorporated TIF No. 34 Project Plan.
B. Such TIF District No. 34 is created with an effective date of January 1, 2009.
C. Not less than 50% of the area of real property within such TIF District No. 34 is
suitable for industrial development and that TIF No. 34 shall be classified as an
“industrial” district for the purposes of Section 66.1105 (4) (gm) 6.
D. The improvement of such area by implementing the TIF No. 34 Project Plan is
likely to significantly enhance the value of substantially all other real property in
such district and the surrounding neighborhood.
Resolution 2009 – 596
Page 2
E. The proposed Project Costs relate directly to promote industrial development
consistent with the purpose for which the TIF District is created under Sub-section
66.1105. (4) (a).
F. The aggregate equalized value of taxable property within proposed TIF District
No. 34 plus the value increment of all existing Janesville TIF Districts does not
exceed 12% of the total equalized value of all property within the City of
Janesville.
G. Such Project Plan for TIF District No. 34, City of Janesville is economically
feasible.
H. The Project Plan for TIF District No. 34 is in conformance with the City’s Plans.
BE IT FURTHER RESOLVED, that the Common Council of the City of Janesville
approve the district boundaries as described in the attached Project Plan, and further,
approve the Project Plan for TIF District No. 34 pursuant to the provisions of Section
66.1105 of the Wisconsin State Statutes.
ADOPTED:
Motion by:
Second by:
APPROVED:
Councilmember Aye Nay Pass Absent
Brunner
McDonald
Eric J. Levitt, City Manager
Perrotto
Rashkin
ATTEST:
Steeber
Truman
Voskuil
Jean Ann Wulf, City Clerk-Treasurer
APPROVED AS TO FORM:
City Attorney
Proposed by: City Manager
Prepared by: Economic Development Director