What is TIF?
Tax Increment Financing (TIF) is a special funding tool available to local municipalities that spurs economic development which otherwise would not occur. When a Tax Increment District (TID) is created property owners within the district continue to pay the same property tax rates as those outside the district. The difference is that tax collections, over and above the "base value" are placed into a special fund that is used to pay for project costs. Once all costs incurred by the creation of the TID are recouped by the additional tax increment created the TID is closed and the additional property taxes created are shared by all taxing entities. The use of TIF varies from project to project and district to district. In some cases, the City uses TIF to promote redevelopment of older parts of the community. In other cases, the City uses TIF to create industrial parks through land acquisition and construction of infrastructure. In both cases, increased property tax collections are used to pay down debt service associated with project costs. The following outlines the City's policy regarding TIF.
The purpose of this Policy is to articulate to existing or potential businesses the City of New Holstein's desire to promote economic development that is consistent with the City's Comprehensive Plan and provides a community benefit that will ultimately be shared by all taxing entities (City, School, Technical College, County, and State) impacted through the establishment of Tax Increment District (TID).
Notwithstanding compliance with any or all of the guidelines herein, the provision of TIF assistance is a policy choice to be evaluated on a case-by-case basis by the Common Council. The burden of establishing the public value of TIF shall be placed upon the applicant and the application must substantially meet the criteria contained herein. City Administration reserves the right to bring any TIF proposal forward for Council consideration.
Meeting statutory requirement, policy guidelines or other criteria listed herein does not guarantee the provision of TIF financial assistance nor does the approval or denial of one project set precedent for approval or denial of another project.
The authority and regulations for TIF and the establishment of TID are found in Wis. Stat. 66.1105. The City of New Holstein reserves the right to be more restrictive than provided under the statutes.
As a matter of policy, the City of New Holstein will consider using TIF to assist private development in those circumstances where the proposed private project shows a demonstrated financial gap and that the financial assistance request is the minimum necessary to make the project feasible. The developer is expected to have exhausted every other financial alternative(s) prior to requesting the use of TIF, including equity participation, other federal and state funds, bonds, tax credits, loans, etc.
It is the intent of the City to provide the minimum amount of TIF assistance to make the project viable and not solely to broaden a developer's profit margin on the project. The potential developer shall provide sufficient evidence of efforts to gain financial assistance from other sources, and to show that those attempts have been exhausted. The City will then perform an independent analysis of the information.
In requesting TIF assistance, the developer must demonstrate that there will be a substantial and significant public benefit to the community by eliminating blight, strengthening the economic and employment base of the City, positively impacting surrounding neighborhoods, increasing property values and the tax base, creating new and retaining existing jobs, and implementing the Comprehensive Plan.
Each project and location is unique and therefore every proposal shall be evaluated on its individual merit, including its potential impact on city service levels, its overall contribution to the economy and its consistency with the Comprehensive Plan, Strategic Plan or other community planning documents. Each project must demonstrate probability of financial success.
"BUT FOR" TIF
The fundamental principle and that which the City must determine through information provided by the developer is that the project would not occur "but for" the assistance provided through TIF. The burden is on the developer to make this case to the City and not the City to make this case for the developer. Should this "but for" determination not be made, TIF for the project cannot be approved.
The City will consider utilizing TIF to meet the following basic objectives:
1. Stimulate and continued revitalization of the community by:
a. Improving infrastructures;
b. Creating a variety of housing opportunities;
c. Preventing or eliminating slum and blighting conditions;
d. Constructing mixed-use developments;
e. Attracting desirable businesses and retaining existing businesses;
f. Encouraging development projects that enhance the streetscape and pedestrian experience and improve the vitality of the community
2. Promote efficient usage of land through redevelopment of blighted areas.
3. Strengthen the economic base of the City and support Economic Development.
4. Stabilize and upgrade targeted neighborhoods.
5. Create and retain family supporting jobs in the City.
6. Increase property values and tax revenues.
7. Leveraging the maximum amount of non-city funds into a development and back into the community.
What Development is Eligible?
The type of development that the City will consider TIF funding includes:
1. Business development (attraction, retention, expansion). TIF assistance will be evaluated on its impact on existing local markets.
2. Mixed-use developments that creatively integrate commercial and retail projects into a residential development.
3. Revitalization of historically significant or deteriorated buildings.
4. Projects that promote office and retail development.
5. Projects that promote neighborhood stabilization or revitalization.
6. Projects that promote industrial development.
7. Projects consistent with approved TIF Project Plans.
8. Projects that involve environmental clean-up, removal of slum and blighting conditions.
9. Projects that contribute to the implementation of other public policies, as adopted by the city such as promotion of high-quality architectural design, energy conservation (i.e. LEED, Energy Star, etc.), green infrastructure, etc.
What Development is Ineligible?
The City will not favor use of TIF funding to help support the following types of development.
1. Speculative office development (projects that have no secured tenants).
2. Relocation of offices, retail and/or commercial uses for purposes other than retaining or substantially expanding the business.
3. Office and retail development outside of the city.
4. Standalone residential development projects unless limited by site and environmental conditions beyond which make the project financially infeasible.
5. Projects not consistent with the Comprehensive Plan.
The full policy is available at City Hall or by contacting Casey Langenfeld at 920-898-5766.