Curtiss officials hesitant to create new TIF district

Elected officials in Curtiss remain wary of creating a new TIF district inside the village, even with a large food company seeking incentives to build a new $3 million facility In October, a local representative of Ohio-based Walnut Creek Foods asked the board if the village could offer any incentives in exchange for the company building a 40,000 to 50,000 square foot warehouse in Curtiss. Jeffrey Burkholder, the former owner of Cloverdale Warehouse who is now an operations manager for Walnut Creek, said the company is looking at possibly buying as much as 27 acres of land inside the village.

As a follow-up to that discussion, board members heard from Dave Wierzba and Dave Krugler of MSA Professional Services at their Nov. 5 meeting. Wierzba provided projections for how much the village could offer if tax-incremental financing (TIF) were available.

Based on the tax rate currently paid by village property owners, Wierzba said a new warehouse like the one proposed by Walnut Creek would generate about $50,000 per year in TIF taxes. If the village were to offer 75 percent of that as an incentive, it could pay back the company up to $375,000 over 10 years.

Under that “pay-as-you-go” scenario, the company would have to pay upfront for all of its own infrastructure, including streets and utility improvements, but the village would reimburse a portion of those expenses every year with tax refunds on the new facility.

Without a TIF district in place, the taxes collected on any new developments would have to be shared with the Abbotsford School District, Clark County and Northcentral Technical College.

If a TIF district were in place, however, Wierzba said the village could refund 75 percent of Walnut Creek’s taxes on its new building and still have money left over for other projects — such as drilling additional wells for more water.

The village’s two trustees, however, are worried that creating a new TIF district will force Curtiss homeowners to pay higher property taxes.

Trustee Betty Rettig said she and other residents noticed how much their taxes went down after the village closed its last TIF district in 2016. She fears that taxes would go up again if a new TIF were created.

“People do not want to be paying those high taxes,” Rettig said.

Trustee John Unruh said he did some research on the history of the last Curtiss TIF, which first opened in 1996. At that point in time, he said the village’s property value totalled $6 million; after it closed 20 years later, the village’s property value had grown to $31 million.

Almost all of this new growth, about $26 million worth, occurred within the TIF district, which includes the Abbyland Truck Stop, El Norteno restaurant and Abbyland Distribution Center.

Unruh said all of this new construction allowed the village’s property tax levy to be raised over the years, but only the property-owners outside the TIF district were paying into the village’s general fund. All the taxes collected on new developments within the district went into the TIF account instead.

“So basically, what ended up happening was, 20 percent of the value of the village ended up paying 100 percent of the levy of the village,” he said.

The village’s tax levy of $85,000 was paid for by the owners of the $6 million in property value that existed before the TIF went into place, Unruh said. When the TIF was closed in 2016, the $26 million worth of new development was added to the regular tax roll all at once, allowing the village and other taxing entities to lower their mil rates.

Village president Randy Busse disputed Unruh’s interpretation, saying that any negative impacts of the previous TIF district were the result of poor financial decisions by former village offi cials.

Busse said the former village president took out a general obligation bond for new sidewalks and curb and gutter installed in 2001. He said that loan should have been paid back with TIF money, not general fund tax dollars.

On the other hand, when a road was built to the new truck stop, Busse said Abbyland owner Harland Schraufnagel took out a $1.1 million loan that was later paid back by TIF dollars.

Busse and the MSA reps said any future developer’s agreements would be arranged this way, so the village does not have to borrow money upfront to do infrastructure projects.

Krugler, a project engineer at MSA, said a TIF district should not cause anyone’s taxes to go up if it is used properly. The only thing it changes is who gets the tax dollars on new developments — either the school district and other taxing entities or the TIF fund.

“Technically nobody is paying anything different than they normally would,” Krugler said.

Still, the two board members were skeptical about the benefits of TIF.

Unruh noted that candidates who opposed TIF have won the last three elections for seats on the board, “because people hated it so much.” Rettig suggested the village hold a referendum on the issue before creating a new TIF district. As an alternative to creating a new TIF district, Unruh asked about possibly offering other incentives to get Walnut Creek to build its facility. Specifically, he wondered if the village could provide tax breaks on the new building.

The MSA reps said they don’t believe the village can exclude a specific property from the regular tax rate without a TIF district in place.

Unruh also asked about the so-called “but for” clause in Wisconsin’s TIF law, which says that new developments like the proposed Walnut Creek warehouse would only be possible if TIF funding is available. Municipalities are only supposed to create new TIF districts if development would not otherwise happen in a particular area.

Curtiss is only considering a new TIF because it wants to match incentive offers from the neighboring city of Owen, which already has a TIF district in place, Unruh noted. Owen is currently offering the company 15 acres for $1.

Wierzba said the “but for” clause is a “squishy” concept, and it has never come up before when MSA has helped create TIFs in other communities. Without a TIF in place to encourage new development, Wierzba said the village will lose out on future tax revenue, making it more difficult to run local government.

“The saying is ‘If you’re not growing, you’re dying,’ he said.

“Curtiss will always be here,” Rettig said in response.

The Nov. 5 meeting ended without the board taking any action, and it’s unclear at this point if the board will revisit the TIF issue at a future meeting.