A proposal to create a new tax increment financing (TIF) district aimed at spurring development along East Green Bay Street drew nearly two dozen business owners from along the proposed route to a public hearing Wednesday before the Shawano Plan Commission.
TIF districts are areas where municipalities invest in infrastructure, such as sewer and water, to attract development where it might not otherwise occur, or to make improvements, such as eliminating blight. Whatever increase in tax revenue that results from development in those districts goes to paying back the debt the municipality incurred from making improvements to the district.
Business owners were mainly concerned about whether property taxes would increase and whether there could be some negative impact from being in a so-called “blight elimination district.”
City Administrator Brian Knapp said the district would have no effect on taxes unless improvements are made to a property that raise that property’s assessed value.
“You wouldn’t pay any more or less than you would if it was not a TIF district,” he said.
Knapp also said he doesn’t like to use the word “blighted,” but said it’s statutory term required for the district.
State law requires the city to show that at least 50 percent of property within a proposed TIF district is a “blighted area.”
Mary Bohm of Bohm Builders, 1213 E. Green Bay St., said the term could hurt the resale value of properties within the district.
“When I hear ‘blighted,’ I think of a tomato plant with a disease,” she said.
Plan Commission member Dave Passehl said there are a few properties in the district that could be considered truly blighted as opposed to simply in need of improvements.
“The Ponderosa building is a potentially blighted property,” he said, referring to the former restaurant at 1247 E. Green Bay St., which has been closed since 2008. “There are properties that are vacant and haven’t been maintained.”
Knapp said there are several vacant properties along East Green Bay Street that are “a blight on the area.”
He said the expectation that those properties will eventually change hands and be made available for development was a key reason for proposing a TIF district.
“That’s why we considered moving forward with this,” he said.
Knapp also said the blighted designation will not show up on tax deeds or any other documents outside of the report prepared for the city by planning consultant Vierbicher Associates Inc. of Madison.
The city also has a “blight elimination district” covering the downtown that was established six years ago.
“I don’t believe that has had any negative impact on development or property owners’ ability to sell or transfer their properties,” Knapp said.
The proposed district would stretch from mid-block between Sawyer and Andrews streets east to just past Rusch Road.
It would encompass more than 100 properties, but would zigzag around those properties that are sufficiently developed, including a major detour around the Shawano County Fairgrounds.
The plan envisions spending about $8.6 million, including $4 million in infrastructure improvements, such as road work and sewer and water utilities, and $1.5 million in incentives to property owners.
However, those numbers are flexible and, Knapp said, the city would prefer to spend more on incentives to property owners.
Knapp said the city is in the process of developing a program and the criteria necessary to provide grants and low-interest loans to property owners.
However, nothing would be spent unless there is an expectation of a return in revenue of about four or five times what was invested, he said.
Knapp said that, assuming the necessary approval is given, funds could be available for property owners as soon as August.
Shawano resident Ron Dahm said business owners should support the idea.
“This is a win-win situation for business,” he said.
The Plan Commission unanimously approved the proposed TIF district after the public hearing. The plan next goes to the Common Council.
Other taxing entities — including Shawano County, the Shawano School District and Northeast Wisconsin Technical College — would have to approve of the plan, because they would not share in any additional revenue from new development in the district until the improvements are paid off.
A Joint Review Board made up of representatives of those entities has already been presented with the plan and will take a vote on it next month.
Shawano has one TIF district that has already been paid off and four that are still active: Raasch Industrial Park; a residential area targeted for blight elimination from Main Street east to Lincoln street and Zingler Avenue south to Pearl Avenue; a downtown TIF district running from the Main Street bridge south to Sunset Avenue; and the Bay Lakes Industrial Park.