Presentation to

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Presentation to

• WAMCAM
• Tax Incremental Financing
• Development Incentives
• By
• Michael C. Harrigan, Ehlers Associates
• Chuck Sulik, MSA Professional Services
• Doug Venable, City of Janesville
• Gary Becker, Vierbicher Assoc.
• January 28, 2004

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Tax Incremental Financing (TIF)

• Tax Incremental Financing is authorized under
  Wis. Stats. 66.1105 to expand the tax base by
  providing public improvements and expenditures
  necessary to promote industrial development,
  redevelopment or eliminate blight.

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Origin and Purpose

• Tool for Economic Development
• Promotion of Industry, Redevelopment, Blight
  Elimination
• Key Underpinning of Program, But For Test

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How TIF Works

• Define Boundary of District (5 and 7 Tests new
  law would replace with 12 test)
• Develop Project Plan
• At least 50 of Land must be Zoned Suitable for
  Industry or qualify under statutory definition of
  blight. (Mixed Use districts in new law.)
• Where Money Comes From
• Taxes from New Development go entirely to pay for
  TID costs instead of flowing to taxing
  jurisdictions during life of TID only.

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Increment Growth Timeline
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Eligible TIF Expenditures

• Business/Industrial Park Development
  Infrastructure Costs
• Organizational Costs
• Development Incentives
• Land Acquisition/Writedown
• Finance Costs
• Administration

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Economic Feasibility

• Obtaining funds necessary to implement the
  projects
• Sufficient revenues to pay for project costs
• Current and projected equalized valuations
• Citys debt capacity

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Plan Implementation

• Seven Year Implementation Period (New Law will
  Extend this period.)
• Ability to adjust implementation of the Plan
  based on development projections
• Phasing of Plan if Possible.
• Development Agreement with Developer to Minimize
  Risk.

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But For Test

• BUT FOR the creation of the TID, the development
  proposed would not occur or would not occur as
  proposed.
• Use development incentives to either get a
  project to happen that wouldnt or to get a
  higher quality project than would otherwise be
  possible.
• TIF shouldnt be used where the exact project
  would occur (in quality timing) without its
  use.

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Proposed Changes to LawPassed Senate Assembly,
Waiting Govenors Signature

• Allows Mixed Use districts to expenses for
  newly platted residential.
• Eliminates 5 7 Tests, replaces 5 with 12 as
  to maximum value in TIDs.
• Donor TIF for Redevelopment Districts
• 27 Year life for Redev. TIFs, 20 Years for
  Industrial.
• Repeals 7 Year exp period replaces with period
  within 5 years of maximum life.
• Allows up to 4 boundary amendments.
• Effective Applicability Dates must be checked.

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Panel

• Gary Becker
• Vierbicher Associates
• Michael C. Harrigan
• Ehlers Associates, Inc
• Chuck Sulik
• MSA Professional Services
• Doug Venable
• City of Janesville

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Panel Discussion Topics

• Development Agreements/Incentives
• Municipal Standards/Policies
• Financing Options

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Development Incentive Examples

• Land Acquisitions / Land Writedown
• Financing through Pay as you go Developer Bond.
  (Can be used for developer project costs its
  payment is entirely subject to available TID
  revenues.)
• Cash Assistance to cover GAP financing.
• Payment of infrastructure costs that may
  otherwise be considered developer costs..

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Municipal TID Standards

• Has local municipality developed its own
  criteria?
• Established expectations of developer as
  condition for TIF assistance.
• Rating system will determine level of TID
  participation

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Financing Options

• General obligation bonds or notes
• Lease revenue bonds through a Community
  Development Authority
• State Trust Fund Loan.
• Water/Electric and Sewer Revenue Bonds
• Pay as You Go Developer Bond
• Special Assessment B Bonds.

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Resources

• Presenters
• Wisconsin Department of Revenue-Forms/Guides
• http//www.dor.state.wi.us/html/govform.htmltif
• Wisconsin Department of Commerce-Area Development
  Managers
• http//www.commerce.state.wi.us/Mt/MT-FAX-0901.htm
  l
• Wisconsin Economic Development Association
• http//www.weda.org/
• WEDA Links Page
• http//www.weda.org/links-member.html