Closure of Belgium’s TID and what it means

Village’s road project keeps taxes from wild swings after property value increase from $400,000 to $58.4 million since 1995

BELGIUM’S TAX INCREMENTAL FINANCE DISTRICT includes Trimen Industries (top photo) and the Ardennes subdivision. The TID closed in September, and the taxing jurisdictions and residents will start to see the benefits after 2023. Photos by Mitch Maersch

By MITCH MAERSCH

Ozaukee Press staff

Tax incremental finance districts can run the gamut from political lightning rods to distressed pieces of property struggling to gain value to economic development success.

The Village of Belgium’s TID No. 4 falls into that third category.

Since it was created in 1995 on farmland valued at $424,900, the village’s TID accrued $58 million in value from industrial, commercial and residential development before closing in September.

“This has been an extremely successful TID,” Village Treasurer Vickie Boehnlein said.

“We developed that property, we increased its value and in the end all the taxing jurisdictions should benefit from that.”

Those jurisdictions include the village, Cedar Grove-Belgium School District, Ozaukee County and Lakeshore Technical College.

TIDs, she said, are economic development tools allowed by the state in which municipalities pay for development costs by using tax revenue the TID generates for a certain period of time.

Belgium’s TID includes both Ardennes subdivisions, a portion of the industrial park and the New Luxembourg subdivision. Amendments added the industrial park and New Luxembourg portions, and a  narrow stretch connects the areas near the two subdivisions since TID land has to be contingent.

The idea, Boehnlein said, is to spend tax revenue to develop land to increase its value and thus future tax revenue.

If nothing was done with the $400,000 of farmland in Belgium’s TID, “that’s what we’d still be gaining revenue on,” Boehnlein said.

All taxing jurisdictions have to agree to go ahead with the TID and not take tax revenue on the increased property value until it closes.

Taxes generated by the increased property value go toward development in the TID — the jurisdictions still collected taxes on the $400,000 base of value, she said.

As of 2023, the jurisdictions are collecting taxes on the full $58.4 million valuation.

The increased value of the property due to the TID development doesn’t increase the village’s levy, but it increases the village’s equalized value, which means the tax levy gets divided over a larger pot of money, resulting in a significant decrease in taxes across all jurisdictions.

The village, however, to maintain a more steady tax rate is using the money to pay off a loan on a large roadwork project in 2022.

“It was all calculated out so that taxpayers’ taxes don’t go up because of this loan by taking into consideration what was going to happen when this TID closes,” Boehnlein said.

“The board is working extremely hard to keep taxes as level as possible by structuring loan payments around the TID closing.”

The jurisdictions also get a one-time windfall of whatever money is left over in the TID fund for development when it closes.

The village’s financial advisers initially estimated that to be $726,000, but Boehnlein said now it’s closer to $600,000. The final total will be determined in the TID audit, which is underway.

Lump sums could be given out between April and June, she said.

The school district would get the biggest total, followed by the village.

Belgium, Boehnlein said, determined it would use its money to help pay for its $6 million of roadwork done over the past two years.

“We were able to do a significant project that was very necessary without a tax increase,” she said.

Paying for a project like that with TID money is not something that can be planned out years ahead, she said.

“You can’t plan it when you create a TID because you don’t know what you’re going to create in value,” she said.

“The tricky thing is if the value doesn’t increase in a TID, then there would be no value going into the TID either. The only tax money going into the TID is based on increased value.”

Each TID agreement, Boehnlein said, is different. In Belgium’s case, developers paid for some of the infrastructure up front with the agreement they would get paid back with TID revenue.

“If that tax revenue would not have come in, those developers would not have gotten that money back,” she said.

Most municipalities, she said, structure their TIDs so they don’t lose money.

“Ours was written in the sense that if the tax revenues never came about we wouldn’t be on the hook to pay the developers,” Boehnlein said.

TIDs are restricted in zoning. Some may be all industrial or commercial, but none may be all residential.

“Most of the value increment in ours was residential,” Boehnlein said.

What type of expenses the district pays for are also written into the TID agreement. Belgium included the purchase of a snowplow since more developed properties on new roads mean more space to clear of snow.

The village’s wastewater treatment plant is in the TID, and district revenues paid for a new lift station in the New Luxembourg subdivision.

“Without that development, we wouldn’t need the expense,” Boehnlein said.

The Village Hall was even paid for with the TID through an agreement with a developer. The village had met in the Belgium Fire Department building, which the municipality owned and rented to the department until the new hall was built around a decade ago. The village then donated the land and former village hall building to the fire department.

The $58 million in value could have been greater if the industrial park portion — Trimen Industries and Dream Logistics are the biggest companies in the TID — was more robustly developed. That, Boehnlein said, was mostly because a portion of Silver Beach Road is unpaved, forcing trucks going to and from I-43 to take a longer route through the village.

“I think ours has been slower than it could have been because we don’t have an access road,” she said.

But the increment is still significant.

“A $58 million increase is very good. It’s good for the village. It’s good for all the taxing jurisdictions,” Boehnlein said.

The village’s other three TIDS are closed and there is no talk of adding more TIDs, she said. The village lacks excess land and most underdeveloped areas are residential.

Any additional TID would require annexation, Boehnlein said, and she hasn’t heard any talk of that.

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Wisconsin’s largest paid circulation community weekly newspaper. Serving Port Washington, Saukville, Grafton, Fredonia, Belgium, as well as Ozaukee County government. Locally owned and printed in Port Washington, Wisconsin.

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