City known for making TIF districts prepares to close one

For the first time in decades, the City of Port Washington is on the verge of dissolving one of its tax incremental financing districts.

Finance Director Mark Emanuelson said recently that the city’s TIF No. 3, which was established to help with the infrastructure costs for the proposed Cedar Vineyard subdivision along Lakeshore Road and projects in the city’s industrial park, will be dissolved in 2027.

“Things are already in motion,” Emanuelson said.

The district was created in 2015 with a base value of $8.8 million, he said, and is valued at $15.5 million today — even though the subdivision it was created to help with never came to fruition.

He said the Common Council will begin to take initial steps toward dissolving the TIF district later this year, noting that the full increase in valuation won’t be felt until the city’s 2028 budget and tax levy are prepared next fall.

Then, the city will be able to spread its tax levy over almost $7 million in additional valuation.

While TIF No. 3 is not nearly the city’s largest TIF district, adding that increase to the city’s tax base will have an impact, Emanuelson said.

“It will provide some relief toward the 2028 budget,” he said, estimating the TIF district will probably provide about $20 in tax relief per household.

“It’s not a big mover, but it’s $20 per house,” Emanuelson said. “So if taxes would otherwise go up $50 that year, they’ll go up $30.”

A larger impact will be felt in about seven years, when the city is expected to dissolve TIF 2, which covers much of the downtown and surrounding area.

“TIF 2 is definitely going to have a much more pronounced impact,” Emanuelson said. “It’s a few years away yet, but it will be nice.”

TIF No. 2 was created in 2010 and used to finance a wide array of projects, from street improvements to development incentives. 

It has created about $100 million in increment — or increased valuation — since it was formed, Emanuelson said, and will likely generate about $1.5 million in tax relief when it is dissolved.

The city’s first TIF district, which was in effect from 1993 to 2007, had a surplus of several hundred thousand dollars when it was retired years earlier than initially expected, and much of that money was used for tax relief.

The city has two other TIF districts. TIF No. 4, a pay-as-you-go district used to finance Spring Harbor Senior Apartments, an affordable senior housing project on a former trailer park off South Spring Street,  is expected to end in 2035, 12 years earlier than expected, Emanuelson said last fall.

And last year the city approved TIF No. 5, which is financing infrastructure for the Vantage Data Centers Lighthouse Campus on the city’s north side.

The TIF district encompasses 1,674 acres north of Highland Drive and south of Lake Drive between I-43 and the Ozaukee Interurban Trail.

The projects in the TIF district are expected to cost $458.6 million. Of that amount, $455.4 million will reimburse Vantage for infrastructure costs needed for the data center campus and $3.15 million will be used to cover the city’s costs to administer the district.

Although state law allows TIF districts to run for 20 years, the plan estimates that this district will be closed in 17 years.