The Village Board voted 4 to 1 to move forward with a feasibility report that could create a tax incremental finance (TIF) district to expand the Franksville Industrial Park by 390 acres. Jerry Griswold opposed the project, but Jim Dobbs, Tom Weatherston, Ron Coutts, and Kevin Wanggaard approved it.
New Jobs, New TIF?
The report, which was written by Ehlers, a consulting firm the Village hired, calls for the expansion to occur in two phases, one that includes 152 acres and one that includes 238 acres. The first expansion would mostly serve two unnamed businesses, according to the report.
The two developments are expected create 70 jobs with an annual compensation between $35,000 and $55,000. And with the total build out of both phases, the district is expected to “spur” $66 to $88 million in new, and taxable, industrial development.
The total cost of the infrastructure improvements carries a price tag of $12 million. However, 25 percent of the cost would likely be paid for with grants, and the Village or the developer would finance the remaining cost of the infrastructure project, which would cost $8.9 million for both phases. The money would be used to improve the truck route, utilities, roads, sewer and water service, and add a rail spur, signage and lighting. However, the project doesn’t have to be completed all at once, said an official with Ehlers.
What is a TIF District?
A TIF district is a development tool municipalities can use to attract business. The way it works is that a financing district is created and a base value of that district is established by the taxing jurisdictions. The increased value of the property is still charged at the base rate, but the district uses the increased tax revenue to pay for the infrastructure projects.
This means those taxing entities (Village, County, Racine Unified and Gateway) still receive the same amount of tax revenue before the district was created, but the increased tax revenue pays for the infrastructure costs over a 20-year period.
Why use a TIF District?
Jenny Trick, of the Racine County Economic Development Corporation, told the Village Board the names of the businesses are confidential. However, one is ready to build immediately and the other would likely build within the year, she said.
“The value of this discussion is not only through a recruitment perspective, but also a retention perspective,” Trick said. “You have a number of businesses that have already made an investment there and they are going to want to grow. And there is value in having your investment be retained. So you want to make sure the business park is appropriate and is an attractive business park.”
Village Board Member Jerry Griswold said he's against using taxpayer money to fund a project like this.
“I say let the developer invest their money, why should the taxpayer fund this?” Griswold said. “This thing has already gone way to far in my book…. In my mind we need to do the basics, highway, fire, and police—not get involved in development.”
But part of the condition of creating a taxing district is that using the tax increment to fund infrastructure projects can only be used if the development “would either have not occurred, not occurred in the same timeframe, or would not have occurred with the same value,” according to the report.
Wanggaard supported the project.
“This area is already designated for commercial use,” he said. “It’s not as good of an area as it should have been, but we’ve got to deal with what we’ve got. And we’ve got to utilize what we’ve got instead of try to build something else…. If we have to look at getting companies here, which we do. I think that’s the place to do it.”
What's the next step?
The approval of the report doesn’t mean the project itself is approved, but it does mean the Village can move forward with holding public hearings on the contents of the report. In order to create the district, a number of entities would need to approve the project, including the Joint Review Board, the Community Development Authority, and the Village Board, and several public hearings would need to be held.
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