Council OKs TIF to redevelop former school

The Port Washington Common Council on Tuesday approved the concept of forming a pay-as-you-go tax incremental financing district for the redevelopment of the former St. Mary’s School by Ansay Development by a 5-2 vote.

The vote also authorizes the city to proceed in negotiating a development agreement for the district, which would pay the developer 90% of the TIF proceeds, an estimated $1.2 million over the expected 20-year life of the district, and the city 10%, or $134,200, according to the city’s TIF analysis.

Ansay must spend the money it receives from the district to cover the cost of road improvements and environmental cleanup at the school, according to the TIF proposal.

Aldermen Deb Postl and Mike Gasper voted against the proposal.

“I’m TIF’d off,” Postl said. “I know this project is going to pass. But going forward, can we at least look at TIF as a last resort instead of a developer’s first choice?”

She said the city should look to the Harborview hotel as an example of what can be done without TIF funding.

“I’d like to use the Harborview hotel as the bar we set,” Postl said.

Gasper said the St. Mary’s project is a good use of a TIF district and funding, but said he doesn’t like the fact it will last 20 years and that the city has been using TIF as much as it has in recent years.

“That’s a generation,” he said. “I really, really am fearful we’ve been using TIF to the point that it’s too distasteful for people to support, even if a project is the ideal and perfect fit.”

That concern was shared by Mayor Marty Becker, who said that he is “getting TIF’d out.”

However, Becker said, he supports the St. Mary’s district, calling it a “poster child for TIF.”

City Administrator Mark Grams noted that the incentive Ansay receives is capped at $1.2 million, and if it receives that money before the 20th year, the district will close early.

“If they hit it in year 17 or 18, then the TIF would end,” he said. “If it’s year 20 and they’ve only hit $1.1 million, the TIF will end.”

Ian McCain, Ansay’s design/construction manager, told the council that TIF funding is essential to the project, which will convert the former school into as many as 30 apartments while also creating a historic district that encompasses the school, St. Mary’s Church, its parish center and former convent.

That district would pave the way for the firm to receive tax credits that are also needed for the project, McCain said.

“I think this is the perfect ‘but-for’ test for TIF,” he said, referring to the requirement that the district should not be used unless it’s determined that the project won’t go forward but-for the TIF funding.

The tax credits are just as essential to moving the project forward, McCain said.

The St. Mary’s project includes a significant investment in public amenities, such as improved roads and sidewalks around the church and school, and environmental issues such as asbestos abatement, McCain said.

Gasper noted that the city’s share of the TIF funding must offset its administrative expenses for the project.

“What happens if we only get to 7%?” he asked.

“We’ll get to it (10%),” Grams promised.

Ald. John Sigwart supported the proposed TIF, saying, “I find this project terribly exciting.”

Without the TIF support, he said, it’s likely the building would sit vacant for decades because of the high cost of redeveloping it.