Commission clears path for special tax district

Superior’s Plan Commission gave its stamp of approval Wednesday to create a new tax increment finance (TIF) district for redevelopment of the neighborhood surrounding the former Central and Blaine school sites.

If approved by the city council May 6 and by a joint review board composed of all taxing entities and one citizen member — date to be determined — the city could start making offers to buy houses in the neighborhood by mid May. City officials plan to meet with neighbors May 1 to talk about the process and residents’ rights.

The area is bounded by Grand and Fisher avenues and Belknap and North 13th Street.

The city anticipates borrowing and spending $5 million to buy homes, help residents relocate and make infrastructure improvements. Those expenditures are expected to create $31 million in valuation from redevelopment and new development. Officials say it which would generate sufficient new taxes to retire the district by 2028.

Under state law, TIF districts can be created when development wouldn’t otherwise occur without them.

For Kevin Peterson, a local businessman, creating a TIF district in the proposed area doesn’t make sense because work already is underway with the construction of the Grand Central project, an office and retail campus being developed by RJS Construction. Peterson attended a public hearing on the project two weeks ago, when neighbors of the proposed site — residents and business owners alike — and the vast majority of people who testified before the Redevelopment Authority spoke in favor of the project area. He said project supporters had something to gain from the proposal.

“I want to clarify something that I wrote in the newspaper once that this is a $3 million subsidy for the rich,” Peterson said. After reading the draft plan for the project, Peterson said the cost would actually be higher than he suggested in his letter to the editor. “It’s actually a $6 million subsidy, and that doesn’t include interest, which is a total of $9.3 million, as opposed to $5 million. Who benefits from this subsidy? I won’t argue that the community has no benefit from it, but the real people who benefit from it are the developers and those that are going to end up owning and developing property in the TIF. That’s not a bad thing, but I would argue that’s a subsidy to those developers.”

Taxpayers are funding the subsidy, Peterson said.

All entities that tax Superior property owners still collect property taxes for the value of the project area at the time it is created. However, new taxes generated by the value that exceeds the original is redirected to repay bonds to cover TIF expenses. Until the debt is retired, four taxing entities — the Superior school district, Douglas County, Wisconsin Indianhead Technical College and the state — receive none of the newly created tax benefit.

If the proposal fails, Peterson argued, taxpayers would foot the bill.

Finance Director Jean Vito said the city has never created a TIF district that failed to meet financial objectives.

Mike Murray, executive vice president of RJS Construction, said his company does stand to benefit from the proposal, but company officials were not aware of that last year when RJS sought a zoning change to allow the Grand Central project to proceed.

“We believe that if this happens, our property and the Blaine development will become more attractive, and we’re trying to attract people to the area to come, to build, to own, to lease,” Murray said. “Ultimately, we believe it will create a more positive environment over there.”

However, he said, the company was and remains fully prepared to finish its project as proposed about a year ago.

“Since TIFs started to appear in the ’70s — Wisconsin’s first TIF was approved in 1976 — there have been over 1,300 TIF districts established within the state,” said Andy Lisak, Development Association director for Superior and Douglas County. “As of 2003, over 800 were still in effect. … It provides a local community with one of the most effective economic development tools that it can have. … A TIF is better than anything a state has to offer.”

It provides local control over economic development, flexibility and incentives and tools that allow development to happen in a community, he said. In Superior, he said, contending TIF districts have contributed to the creation of more than 500 jobs.

“Especially when we’re talking redevelopment, which is the toughest type of development project you can do, TIFs really play a very important role,” Lisak said. “TIFs go beyond developers and beyond the rich; it goes to the workers that work at these facilities.”

Contact Shelley Nelson at (715) 395-5022 or snelson

@superiortelegram.com.

Tags: houses, citizen, state, law