After a relatively short debate, the Common Council on Tuesday night approved an amendment that allows for much greater spending through the taxing district created a little over two years ago to support UWM's Innovation Campus.
The 14-1 vote paves the way for the city to offer the incentive of using tax-incremental financing dollars to assist developers with building parking structures or surface lots for project plan sites.
This was the city's final vote, but the measure still has to pass muster with the Joint Review Board, which is composed of the several other taxing entities supported by the Tosa property tax: schools, the county, MATC and MMSD.
The amendment includes projections that show that Wauwatosa's TIF District No. 6 could grow from about a $10 million commitment agreed to in 2010 to $30 million or even more than $35 million.
This TIF is usually referred to as a $12 milion plan – the construction costs of public roads and utilities created to serve Innovation Campus. But actually, only about $6.5 million of that was budgeted out of TIF 6, the balance slated to be paid out of already banked TIF 2 funds.
With debt service and administrative costs, $6.5 million grows to about $10 million.
The amended plan adds a possible and projected $12 million-plus in hard construction costs for private tenant parking. Adding debt service and admin costs to that, and the whole TIF grows to about $30 over its life – which could be as long as 27 years.
But, as Ald. Pete Donegan pointed out last week, and City Attorney Alan Kesner confirmed Tuesday, if no development occurs on the Eschweiler Historic District, which is the only part of TIF 6 that is also within TIF 2, then no TIF 2 funds could be used, pushing TIF 6 even higher.
Since the city is already committed to building Discovery Parkway to serve Innovation Campus – indeed, the money is already borrowed – then if no TIF 2 funds were available, TIF 6 would have to be loaded with that $5 million burden as well, taking it to $35 million – or beyond, depending on additional debt service and costs.
None of this sits well with Ald. Pete Donegan, formerly the chairman of the council's Budget and Finance Committee and a retired insurance executive. Donegan has consistently called for cautious, conservative, risk-averse strategies in borrowing and spending public monies.
"What I found startling is the financial pro forma presented in the amendment," Donegan said. "Thirty million dollars taken at the risk to the taxpayer with no return or relief for 23 years" – the administration's estimated possible early retirement date of the TIF.
"Would I have voted for this in 2010 if I knew then what I know now?" Donegan said. "I don't know. But I know it's not Innovation Campus so much as it is an office park. And it isn't so much UWM's as it is Wauwatosa's Innovation Campus.
"There is no UWM Engineering School, as promised. The Eschweilers, it's looking like, won't be saved, as was promised.
"Would I have voted for it? Maybe. But you have to be disappointed."
With that, Donegan said he would vote for it now, as there was little turning back at this point – and used a freeway traffic analogy to illustrate.
"We're in a fast-moving car on a busy highway, and we're going in the wrong direction right now, but if we hit the brakes we're going to cause a lot of damage.
"I guess we need to pass this now, and then try very hard to get going in the right direction."
Donegan added: "We have to get an attitude."
By that, he meant that the Common Council should not assume that every project that comes forward from now on is going to automatically be approved for everything it asks for. And of all he said, that was what most other aldermen grabbed hold of.
"We're going to go head-to-head with everyone who comes along," said Ald. Craig Wilson – and with that he amended his own motion to approve the TIF change to add a directive to city staff "to establish those thresholds. We should have a more concrete strategy, and commit to no more than the road and this project."
"This project" is a $13.5 million building proposed by developer Zilber Inc. for the Swiss ABB Group, a power automation manufacturer. While not specified as an applicant for funds in the TIF 6 amendment, ABB is clearly identified in the pro forma projections as a likely recipient of the $2 million in parking support it has already asked for.
Wilson said that once ABB, as the first and most important marquee mover on the property, was approved and under way, the city was under no futher obligation to give way to the demands of hungry followers. He reiterated Donegan that, "Yes, we've got to have an attitude."
Ald. Dennis McBride echoed that with his own shopping analogy.
"First one in the door gets the premium," McBride said. "After that, the coupon sale is over."