Fighting TIF Abuses

Tax Incremental Financing in Dane County has traveled a long way from its statutory purpose to address blight.   It has increasingly been a way to create much-celebrated “public-private partnerships” in which the public contributes resources but has no controlling interest, and in which the risk of investment is transferred to the public.    Proposed developments in Dane County – Madison’s Judge Doyle Square hotel, and Stoughton’s Kettle Park West project – which includes a 153,000 square foot Wal-mart Super Center, do not address blight, do not address serious local needs and are far from a sure bet in terms of profitability.

Fortunately, democracy and grassroots activism are not so far gone that we have to accept these proposals.

Citizens Against Subsidized Hotels (CA$H) kicked off an ambitious drive on May 1 to collect more than 16,000 signatures in favor of a referendum to restrict TIF spending in excess of $10 million to those projects the public approves at the polls.  PD members are already circulating petitions, and one need only be 18 years of age and a city resident since April 1 of this year to sign.   Any Wisconsin resident can circulate petitions, which can be downloaded, along with instructions, at nocashsubsidy.org.    Once enough signatures are collected, Common Council can choose whether to adopt the ordinance or put it on the November ballot for approval by the city’s voters.     A majority of yes votes would require a subsequent ballot measure on the Judge Doyle Square hotel, presumably in April of 2015.

 

The language of the proposed ordinance reads:

Binding Referendum. Prior to providing City financial assistance in the aggregate amount of Ten Million Dollars ($10,000,000) or more for a private development project, the Common Council shall submit to the electorate a binding referendum for approval of the City financial assistance.

Failure of the binding referendum shall preclude the City from financing the project. The wording of any referendum shall provide the amount and specific use of the City financial assistance and the terms under which the assistance is being provided, the name of the private entity receiving the City financial assistance, and a description of the private development project. Nothing in this provision shall be construed to preclude or limit the City from exercising its role in the planning, design or other regulatory approval of such publicly financed projects. 

A referendum requiring voter approval for any TIF project was passed by Village of Cross Plains residents in 2005.   Officials received the go-ahead to create a downtown TID in 2008 and village residents have since gone to the polls to amend its boundaries. 

In Stoughton, where at least one existing Tax Incremental Financing District is not measuring up to its economic promise, engaged city residents continue to ask hard questions about the proposed Kettle Park West development.   In January, Stoughton’s Council approved a developer agreement with Forward Development Group of Verona (also Kettle Park West LLC) for a parcel at the intersection of Highways 51 and 138.   Approval was granted two weeks after the big box store tenant was revealed to be the Wal-mart Super Center.  The developer maintained that agreement with Wal-mart had required the secrecy to that point.   Stoughton already has a Wal-mart, but not a Super Center. The new store would be four times the size of the existing one and would be one among about four retail tenants.  

The project is a greenfield development that requires substantial infrastructure development and tax incremental financing from the city of about $5 million.   City residents object to subsidizing low wage jobs at the Wal-mart Super Center and have raised concerns about the impact on Stoughton’s downtown and local businesses in surrounding communities.   The city has a “Big Box” ordinance that requires an economic analysis of that impact, and the development is currently stalled, pending that report by the Twin Cities-based consultant that city has selected to provide it.  With this report pending, Stoughton residents continue to do their own homework.   Through this vigilance, the public has already become aware that the city’s TIF Policy, adopted in 2005, was not followed in development of the Kettle Park West agreement.   

Mayor Donna Olson’s unwavering support for the project, including the Wal-mart, prompted a write-in campaign against her in the April election.  Starting late and without his name on the ballot, challenger Doug Kittleson still received more than 1300 votes of the 3360 cast in the mayoral race.  Ironically, the proposed development hardly seems in line with the city’s 2012 neighborhood plan for Kettle Park West, which states as its economic development goal attraction and retention of businesses that enhance Stoughton’s “small city character.”

Progressive Dane will continue to follow and participate in economic development conversations occurring throughout the county, including those involving the use, or proposed use, of tax incremental financing.  The May GMM will address party strategy around the city referendum.

 

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