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#2 Council Policy Statement #61 (Economic Development) CITY OF JANESVILLE Policy No. 61 Page 1 of 12 COUNCIL POLICY STATEMENT Date Issued 6/13/1994 Revised 10/28/2003 General Subject: Administration Revised 11/14/2006 Effective Date 11/14/2006 Specific Subject: Economic Development Cancellation Date _________ Supersedes No. ___________ I. Overall Goal : To diversify the economic base of the City of Janesville through the retention and expansion of existing businesses, the attraction of growing industrial and large regional service sector employers, and the redevelopment of the downtown and older commercial areas in order to create new employment opportunities for Janesville's citizens and which will expand the City's tax base. II. Primary Objectives : 1. To implement a high profile proactive approach to local economic development through a public/private partnership. 2. To provide a range of development incentives as needed to retain local employers and to stimulate their expansion and to facilitate the redevelopment and revitalization of the downtown and older commercial areas. 3. To attract smaller, fast growing manufacturing and regional office employers in business sectors with projected growth. 4. To provide both existing and new employers with a consistent set of guidelines for the City Administration's approach to incentive programs for projects located on private and/or publicly owned industrial sites. 5. To facilitate the use of federal and state development incentive programs and grants for local development projects. 6. To maximize the effectiveness of the City's limited resources in stimulating job-creating development projects. CITY OF JANESVILLE Policy No. 61 Page 2 of 12 COUNCIL POLICY STATEMENT Date Issued 6/13/1994 Revised 10/28/2003 General Subject: Administration Revised 11/14/2006 Effective Date 11/14/2006 Specific Subject: Economic Development Cancellation Date _________ Supersedes No. ___________ 7. To compete on an equal basis with other communities for an increased share of new development projects. III. Implementation : The City Administration shall be responsible for implementing this economic development policy. The Economic Development Agency will have a lead role in facilitating development projects and coordinating efforts with the private sector. As development projects arise, the Administration shall have the authority to negotiate the types and level of development incentives needed in accordance with the provisions of this policy. The Administration shall regularly inform the City Council of the progress of negotiations. Both the City Administration and the City Council shall maintain the confidentially of all such negotiations. The City Council shall have the final authority to review and approve all negotiated agreements and shall act on them in a public meeting. IV. Industrial Development Policy : The City of Janesville shall concentrate its industrial development efforts on retaining its existing industrial firms and facilitating their expansion. In addition, the City shall work with private sector and regional marketing initiatives to attract new employers and shall utilize the available development programs to remain competitive in the attraction of new industrial employers. This industrial development policy acknowledges that in many cases, successful development projects can occur without any public sector involvement. Consequently, the City Administration shall market equally both private and public development sites, and should utilize public incentive programs only when needed to successfully accomplish economic development objectives. The following criteria shall be used to guide decisions involving the use of industrial development incentives: CITY OF JANESVILLE Policy No. 61 Page 3 of 12 COUNCIL POLICY STATEMENT Date Issued 6/13/1994 Revised 10/28/2003 General Subject: Administration Revised 11/14/2006 Effective Date 11/14/2006 Specific Subject: Economic Development Cancellation Date _________ Supersedes No. ___________ A. Project Facilitation The City of Janesville's Economic Development Agency will be available to assist local industries and new industrial prospects to facilitate development projects. Assistance can take the form of providing information on available industrial sites and buildings; determining the necessary permitting for proposed projects; packaging development financing; or helping firms complete proposals for state and federal development assistance. In addition, the Agency will coordinate the City's response to specific requests for development incentives such as the sale of City-owned industrial sites or the creation of new industrial TIF Districts. All requests for development incentives shall be made in writing. B. Financing 1. Industrial Revenue Bonds- The City of Janesville will consider the adoption of initial resolutions in support of eligible industrial projects where the project financed will have a positive impact on the City's tax base and employment opportunities and where the company using the bond proceeds is shown to be financially secure. Applicants for the use of industrial revenue bonds shall present evidence of financial resources sufficient to cover the costs involved. 2. Federal/State Programs- The Economic Development Agency will provide assistance to existing industries and industrial prospects in identifying federal and state financing programs. Where appropriate, the Agency can take a lead role in developing a financing package for development projects and can help the firm complete the necessary application materials. C. Industrial Parks/TIF Districts 1. Existing Industrial Areas Janesville shall continue to actively promote existing industrial CITY OF JANESVILLE Policy No. 61 Page 4 of 12 COUNCIL POLICY STATEMENT Date Issued 6/13/1994 Revised 10/28/2003 General Subject: Administration Revised 11/14/2006 Effective Date 11/14/2006 Specific Subject: Economic Development Cancellation Date _________ Supersedes No. ___________ parks and smaller sites for businesses that do not need additional incentives for expansion projects. Both public and privately owned sites will be treated equally, with the site location decision left to the business planning the development project. By promoting the use of existing sites that are currently served with public utilities, the overall cost of development to the City can be minimized. a) In order to enhance and make marketable privately owned industrial and commercial properties, the City of Janesville, upon written request, may install water mains, sanitary sewers, storm sewers, and roadways as improvements to properties fronting on public streets. Payment for the improvements requested shall be as follows: 1) A ten (10) year deferment at the interest rate prevailing in the year in which the improvement was ordered, becoming due on sale, use, or in ten (10) years whichever comes first. A business which purchases a development parcel from the original owner granted the ten (10) year deferment, may elect to make payment for improvements on a five (5) year payment plan. 2) Interest payments will be delayed until payment of the special assessment. 3) If a property is split without platting, the amount of special assessments shall be apportioned to the resulting parcels. b) In order to improve the marketability of vacant industrial, all owners are encouraged to maintain them in a presentable condition. c) The City may offer to buy privately owned and industrially zoned development sites at the fair market value as CITY OF JANESVILLE Policy No. 61 Page 5 of 12 COUNCIL POLICY STATEMENT Date Issued 6/13/1994 Revised 10/28/2003 General Subject: Administration Revised 11/14/2006 Effective Date 11/14/2006 Specific Subject: Economic Development Cancellation Date _________ Supersedes No. ___________ appraised by the City Assessor, or by an independent appraiser, mutually agreed upon by both parties. If possible, the cost of the independent appraisal will be shared equally by both parties. 2. New Industrial TIF Districts a) The City of Janesville will only consider the creation of an industrial TIF District where a manufacturer or regional office developer is committed to construct a major development project and where the project would not occur without development incentives. The use of industrial TIF districts will be considered for both existing Janesville industries and new industries considering a Janesville location. The use of TIF districts to provide direct financial assistance to industrial projects shall be guided by the following criteria: * Does the proposed project conform to existing plans and land use regulations? * Does the proposed project help to implement the City's economic development strategy? * Is the City's assistance needed in order to make the project feasible? * Is the business financially stable and likely to continue to grow and create jobs for Janesville residents? * Will the cost of the proposed development incentives exceed the projected tax increments generated by the project over the life of the TIF District? * Will the developer guarantee that tax increments will be CITY OF JANESVILLE Policy No. 61 Page 6 of 12 COUNCIL POLICY STATEMENT Date Issued 6/13/1994 Revised 10/28/2003 General Subject: Administration Revised 11/14/2006 Effective Date 11/14/2006 Specific Subject: Economic Development Cancellation Date _________ Supersedes No. ___________ available for all TIF costs that are actually incurred? b) Where the City is asked to develop a Tax Increment District for a major development project, the City will consider including additional acreage within the TIF district to provide suitable sites for smaller, growing firms which need development incentives in order to expand. c) Only the following types of business establishments will be eligible for development incentives within a TIF Industrial Park: * Manufacturing Firms- As defined under Wisconsin Statutes Section 70.11(27). "Manufacturing means the producing, assembling, fabricating, making, or milling by machinery and equipment, a new article or components with a different form, use, and name by a process popularly regarded as manufacturing and as further defined in ss. 70.995 (1) and (2)." * Support and service activities directly related to and used in conjunction with manufacturing operations having the same principal user, including but not limited to management and administration, data processing, research and testing, storage and distribution, but not including sale to ultimate consumers for personal, family, or household consumption. * Storage, distribution, and wholesaling of manufacturing products and materials used in manufacturing, but not including retail sale of products. * Selected services businesses like industrial laundry facilities, regional corporate offices, financial transaction CITY OF JANESVILLE Policy No. 61 Page 7 of 12 COUNCIL POLICY STATEMENT Date Issued 6/13/1994 Revised 10/28/2003 General Subject: Administration Revised 11/14/2006 Effective Date 11/14/2006 Specific Subject: Economic Development Cancellation Date _________ Supersedes No. ___________ processing centers, and manufacturing testing facilities. d) The cost of land acquisition, internal streets, water and sewer mains, storm sewers, natural gas and electric lines, development site improvement costs, necessary and related street and utility improvements outside of the TIF district, industrial park landscaping, street lighting, financing incentives (like interest rate write-downs, forgivable loans, etc.), employee training costs, real estate sales commissions, City borrowing costs, planning and administration costs, TIF marketing costs, and other expenses related to implementing the economic development strategy may be financed out of TIF increments, in accordance with the TIF project plan. e) In return for the incentives offered by the City through the creation of the Industrial TIF District, the business receiving the incentives shall guarantee an annual property tax payment sufficient to allow the City to fully recover its TIF investment within the time period set by the Council. f) The business receiving the development incentives shall provide the City Manager with sufficient financial information to document that the business is financially stable. g) The Economic Development Agency will work with the industry to determine the package of development incentives necessary to complete the development project. The development incentive package must be approved by the City Council. h) Standards for Incentives – Greenfield Sites 1) The City of Janesville will only consider the creation of a new TIF industrial park on vacant land which is suitable CITY OF JANESVILLE Policy No. 61 Page 8 of 12 COUNCIL POLICY STATEMENT Date Issued 6/13/1994 Revised 10/28/2003 General Subject: Administration Revised 11/14/2006 Effective Date 11/14/2006 Specific Subject: Economic Development Cancellation Date _________ Supersedes No. ___________ for industrial development if there are commitments for at least $1 million in new construction and the creation or retention of at least 50 jobs. 2) The maximum cost of the City's assistance to each business locating within the industrial TIF District shall be calculated so that the City will fully recover all of its TIF costs including City borrowing costs through the projected property tax increments over an eight year period. 3) The City may use up to two years of projected property taxes from each Greenfield TIF project to capitalize a Development Fund that can provide assistance for certain “soft” costs like machinery relocation costs, employee training costs, site feasibility studies which relate to development projects within the Greenfield TIF district. The TIF Development fund may be used where an existing industry within a Greenfield TIF districts undertakes a development project that creates and/or retains jobs, but does not create new taxable property value. i) Standards for Incentives – Existing Industry Expansions 1) The City will consider the creation of a new industrial TIF district around an existing Janesville industry, where the industry is committed to an expansion project that will result in an additional $500,000 in property value and the creation or retention of at least 10 jobs. 2) The maximum cost of the City's assistance to each business expanding within an industrial TIF District shall be calculated so that the City will fully recover all of its TIF costs including City borrowing costs through CITY OF JANESVILLE Policy No. 61 Page 9 of 12 COUNCIL POLICY STATEMENT Date Issued 6/13/1994 Revised 10/28/2003 General Subject: Administration Revised 11/14/2006 Effective Date 11/14/2006 Specific Subject: Economic Development Cancellation Date _________ Supersedes No. ___________ the projected property tax increments over a ten year period. 3) The City may use up to two years of projected property taxes from each Expansion TIF project to capitalize a Development Fund that can provide assistance for certain “non-construction” costs like machinery relocation costs, employee training costs, site feasibility studies, etc., which relate to development projects within the Expansion TIF district. The TIF Development fund may be used where an existing industry within an Expansion TIF districts undertakes a development project that creates and/or retains jobs, but does not create new taxable property value. V. Downtown Redevelopment Policy The City of Janesville will work with private sector initiatives like the Downtown Development Alliance to attract and implement redevelopment projects in the downtown. This policy acknowledges that in many cases, successful downtown redevelopment projects require public incentives to overcome the extra costs associated with assembling multiple properties and demolishing structure to create a development site. Underground utilities may need to be relocated, street rights-of-way vacated, and environmental issues remediated. The following criteria shall be used to guide decisions involving the use of downtown redevelopment incentives: A. Project Facilitation The City of Janesville's Economic Development Agency will be available to assist developers and property owners to facilitate redevelopment projects. Assistance can take the form of providing information on available development sites; determining the necessary permitting for proposed projects; packaging development financing; or CITY OF JANESVILLE Policy No. 61 Page 10 of 12 COUNCIL POLICY STATEMENT Date Issued 6/13/1994 Revised 10/28/2003 General Subject: Administration Revised 11/14/2006 Effective Date 11/14/2006 Specific Subject: Economic Development Cancellation Date _________ Supersedes No. ___________ helping firms complete proposals for state and federal development assistance. In addition, the Agency will coordinate the City's response to specific requests for redevelopment incentives such as the creation of new redevelopment TIF Districts. B. Timing of Redevelopment Projects Where possible, the City will use non-TIF funding sources (i.e. general funds, CDBG Blight Elimination Funds, etc.) to purchase and demolish blighted building before the creation of a Redevelopment TIF district. By creating redevelopment sites prior to creating a downtown TIF district, the TIF district is able to utilize 100% of the new property value created by the redevelopment project. C. Standards for Incentives The City may use up to fifteen years of projected property taxes from a downtown redevelopment project to provide appropriate development incentives. The development incentives may take the form of selling property for less than its fair market valuation; the implementation of off-site streetscape improvements; the provision of off-street parking spaces; the relocation of existing water, sewer, storm sewer, electric, gas, and telecommunication utilities; reimbursements to the developer for specified redevelopment costs; low/no interest project financing; and site environmental remediation. D. Downtown Redevelopment Fund The City may use up to five years of property taxes from a key downtown redevelopment project to capitalize a downtown redevelopment fund. The redevelopment fund would provide development assistance for smaller projects within the downtown TIF district that would further improve the area surrounding the CITY OF JANESVILLE Policy No. 61 Page 11 of 12 COUNCIL POLICY STATEMENT Date Issued 6/13/1994 Revised 10/28/2003 General Subject: Administration Revised 11/14/2006 Effective Date 11/14/2006 Specific Subject: Economic Development Cancellation Date _________ Supersedes No. ___________ redevelopment project. VI. Non-Downtown Commercial Redevelopment Policy The City of Janesville will work with private developers to facilitate the redevelopment of older commercial corridors located outside of the downtown. This policy recognizes that it may be necessary to provide public incentives to overcome the extra costs of assembling smaller commercial properties into suitable redevelopment sites and demolishing existing buildings and relocating business tenants, Commercial redevelopment project may also require the vacating of street rights-of-way, relocating existing utilities, and upgrading transportation infrastructure to accommodate additional traffic. The following criteria shall be used to guide decisions involving the use of public incentives for commercial redevelopment projects located outside of the downtown: A. Project Facilitiation The City’s Economic Development Agency will be available to assist developers and property owners and facilitate redevelopment projects. Assistance can take the form of providing information on available development sites; determining zoning and permitting for proposed projects; working out site planning and traffic issues, and packaging development financing. In addition, the Agency will coordinate the City's response to specific requests for redevelopment incentives such as the creation of new TIF Districts. B. Standards for Incentives 1) Commercial redevelopment TIF Districts shall only be considered in commercial areas with the majority of existing structures older than forty (40) years old. The land within a proposed commercial redevelopment TIF District shall not be located within the B-4 CITY OF JANESVILLE Policy No. 61 Page 12 of 12 COUNCIL POLICY STATEMENT Date Issued 6/13/1994 Revised 10/28/2003 General Subject: Administration Revised 11/14/2006 Effective Date 11/14/2006 Specific Subject: Economic Development Cancellation Date _________ Supersedes No. ___________ Business Highway Zoning District. 2) The City may consider the creation of a new commercial redevelopment TIF district where a single “anchor” redevelopment project will create more than $750,000 in new property value on a redevelopment site larger than one acre in size. 3) The City may draw the boundaries of the proposed commercial redevelopment TIF district to include additional properties beyond the immediate “anchor” redevelopment project to stimulate further redevelopment activity and/or consider the creation of a “mixed-use” TIF district where the proposed redevelopment project includes the creation or rehabilitation of residential dwelling units. 4) Development incentives may take the form of selling property for less than its fair market valuation; the implementation of off-site streetscape improvements; the relocation of existing water, sewer, storm sewer, electric, gas, and telecommunication utilities; traffic control improvements, reimbursements to the developer for specified redevelopment costs; low/no interest project financing; site environmental remediation, or other incentives needed to facilitate the successful redevelopment project. 5) For any specific project within a commercial redevelopment TIF district, the cost of the public incentives should not exceed ten (10) years of projected property taxes from the redevelopment project unless the Council elects to increase the incentive to address specific redevelopment issues.