TIF Change to Pay for Parking Barely Passes Budget Panel

It takes three close votes to push Innovation Campus TIF amendment on to the full Common Council, where the spending plan will be heard next week.

In its last stop before reaching the full Common Council, an amendment to allow public money to pay to build private parking on UWM's Innovation Campus just passed muster Tuesday with the city Budget and Finance Committee.

Eventually, the Project Plan Amendment for Tax-Incremental Financing District No. 6 did pass, 5-2-1, with one opponent voting "present." But that was only after that same alderman, Brian Ewerdt, lost on his motion to table the item on a 4-4 tie, and another motion by Ald. Tim Hansen to radically "amend the amendment" fell short on a 3-5 vote.

Hansen wanted to limit the consideration of parking subsidization in this amendment only to the ABB Group development proposal currently on the table, whereas the measure as brought forward names no individual project and would apply to all going ahead.

The flurry of challenges came near the end of 2½ hours of wrangling over risk.

When TIF No. 6 was created in 2010, it was a plan to pay only for publicly owned infrastructure on Innovation Campus – roads and utilities. And only a little more than half the $12 million cost of those improvements, about $6.5 million, was to be borne by TIF 6, with the rest coming from the established TIF No. 2.

The amendment allowing TIF 6 funding to also pay for parking suggests that TIF 6 could provide more than $12 million in support for parking lots or structures. With debt service added over the life of the TIF, that could total $18 million.

Overall, the direct investments in public and private construction, debt service and administrative costs could come to $30 million to $35 million, triple or more the original TIF project plan.

An incentive for growth and jobs...?

City administrative staff justify the spending option as a needed incentive to get developers to build here rather than elsewhere and as an opportunity to attract $90 million in new property value to the city, along with new jobs.

Using TIF funds to support parking is not new, either, the administration pointed out. Of the seven TIF districts created since their inception under state law in 1975, four have helped pay for parking for private developments.

The final city vote on amending the TIF No. 6 plan to allow spending on parking will go to the full Common Council on Tuesday and, if it passes, before the Joint Review Board the following week.

Those TIFs have all been successful so far, according to a review by City Attorney Alan Kesner.

Kesner and City Administrator Jim Archambo also stressed that general taxpayers are not seeing their money going to pay for these parking spots. With the exception of Wauwatosa's first TIF ever, to pay for Village improvements including Harmonee Bridge, the debt service on borrowing for TIF spending has been paid only by those within the given TIF boundaries.

A risky engagement with no turning back...?

But a number of aldermen were stunned by the sudden growth in the projected amount of spending as well as by the speed with which it has been brought forward.

Ald. Pete Donegan said that he was hearing from city staff "the same tone you used in 2010 – saying 'Happy, happy! We're going to have an engineering center and we're going to save the Eschweiler buildings for $12 million.'

"And here we are two years later, and we're hearing 'Happy, happy, we're getting ABB.' But there is no engineering center and we're probably not going to be able to save the Eschweiler buildings, and we're at risk for $30 million."

As for that risk, despite assurances from Finance Director John Ruggini that the city simply would not agree to any developer's application for TIF funds that did not pay for itself, Donegan referred to the whole borrowing and spending plan as "junk bond status."

He also decried most of the touted benefits of the plan, saying that it would be "no help to the Wauwatosa taxpayer for 27 years" – the maximum statutory life of the TIF.

In spite of all that, Donegan said he guessed he would have to vote for the amendment if only because the city had pushed the whole Innovation Campus plan so far down the road that it was too late to turn back now.

Paying the players to play...?

Not so Ewerdt, who tried to put the brakes on the amendment if only to give him and others more time to crunch the numbers and digest the possibilities.

Ewerdt also called the plan "high-risk" and said it would be "opening the floodgates for every project in this TIF that would not have to go through this process."

By contrast, he said, Mayfair Mall itself, the coming Nordstrom department store, and a Meijer Inc. supercenter on West Burleigh Street "have not asked for a dime."

Why, Ewerdt wanted to know, would a company like ABB Group, with $40 billion in annual sales, need $2 million from Wauwatosa to build 100 parking stalls under its building, especially if the site was supposed to be so attractive on its own?

"I keep hearing 'But for...'" Ewerdt said – referring to the statutory TIF test that insists that "But for this investment the development would not otherwise occur.

"I'm thinking, 'Forgo,'" he said. "What do we forgo by this? By locking up this money in a TIF when maybe it could be helping us now?"

Ald. Don Birschel was not sold on the expanded TIF plan either, and voted consistently against it to the end.

"I see this TIF like a credit card," Birschel said. "Why should we max it out now?"

Tom February 14, 2013 at 05:27 AM
This smells like another McBride hand job..


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