Without change, city couldn’t help fund planned projects near Port marina
Port Washington’s downtown tax incremental financing district, which has been used for everything from street improvements to development incentives, is one step away from growing.
The Common Council on Tuesday approved two resolutions amending the district — one that enlarges it by five properties for which developments have been proposed and another that adds potential projects to the TIF plan.
All that’s left before the changes are final is approval by the Joint Review Board, which will meet within the next 45 days to take action, officials said.
Without the amendments, the city would not be able to finance any more projects in the TIF district, said Christy Cramer, the city’s TIF consultant.
That’s because the funds included in the plan when the TIF district was created in 2010 have almost all been spent, she said.
“If the project plan is not amended, you have essentially reached the end of what you can do,” she told aldermen.
And with significant development proposals pending in the marina district, the TIF district has never been more important to the city.
In addition to infrastructure work, such as moving sewer and water lines and remediating sites in the downtown, development incentives of as much as $8.4 million are included in the plan. The original TIF plan called for only $750,000 in incentives.
The city has already used development incentives for two projects in downtown — the Port Harbour Lights luxury condominium and commercial building at the corner of Main and Franklin streets and the Blues Factory entertainment complex proposed for the north slip marina parking lot.
Ansay Development, which had originally proposed a sweeping development for the marina district, has since downsized those plans but is still expected to seek millions in incentives, officials have said.
While controversial, these incentives are important, officials said.
Randy Tetzlaff, the city’s director of planning and development, said the incentives allow the city to bring the cost of developing downtown properties closer to the cost of building outside the area.
Developers who build on raw land incur costs of about $60,000 an acre, he told the Plan Commission recently, while those in the downtown — where they may have to raze a building, remediate the property and deal with site restraints — incur costs of $400,000 to $600,000 an acre.
Because many communities offer incentives to developers, they have become an increasingly important tool as municipalities compete for businesses.
“We’re certainly not unique in this,” Mayor Tom Mlada said.
Cramer emphasized that approval of the TIF plan amendments is not approval of the individual projects.
Each project must go through the city’s review and approval process first, she said, and those reviews include an analysis to ensure they will pay for any infrastructure or incentives needed.
“Everything should be sustainable on its own,” Cramer said.
But because the developments need to pay off before the TIF district expires in 2038, it’s important for the city to move quickly, Ald. Bill Driscoll noted.
“The longer we wait, the more difficult it is (to be economically feasible),” Driscoll said.
The TIF amendments add $1.4 million to the base value of the district, and if all the projects envisioned currently come to fruition, they would add almost $48 million in value to the district, Cramer said.
Estimates show that if that occurs, when the district is retired, it will have a $500,000 surplus, she added.
Cramer also noted that the city used conservative figures when determining whether the district will pay off to ensure taxpayers are protected.