The public investment for infrastructure at UW-Milwaukee’s Innovation Campus could swell to $30 million, according to projections supplied by city officials to the Community Development Authority on Monday.
The CDA swiftly approved an amendment to the tax increment financing (TIF) plan that would allow the allocation of funds to parking structures and surface parking for private developments on Innovation Campus.
While only one such private project has been proposed — the 95,000-square-foot ABB Group building — projections for up to six additional private development sites on the County Grounds tract identify a total of $12,395,000 in support for parking stalls. ABB has already asked for $2 million for in-building parking.
The TIF amendment approved Monday is on a fast track. It will go to the Budget and Finance Committee on Feb. 12, where if approved it will move to the Common Council on Feb. 19, and if approved there to the Joint Review Board on Feb. 26 for final approval.
That would allow the city to act on ABB's $2 million TIF assistance request, already filed.
How it breaks down
Based on projections the city supplied to the CDA, here’s how the $30 million breaks down:
- The aforementioned $12.4 million for parking
- Almost $6 million in debt service on that investment
- $6.5 million for the Discovery Parkway main access road, additional access roads to the individual development sites, and utilities to serve all of them
- About $3.5 million on debt service for that project
- $2 million for design and administrative charges
The parking element triples the public investment in Innovation Campus, according to the amended budget.
How it will be recouped
To pay for that, if UWM finds six more tenants, the total projected value of private developments will come to $90 million. The amended budget calls for those six additional six tenants to be on board in two years, by 2015, and for them to start paying their part toward the TIF debt by 2017, as their projects are realized.
If all seven possible developments take place on that schedule, the project would realize $34.2 million in incremental taxes over the 27-year life of the TIF district — $4 million over the investment in public and private infrastructure.
According to the terms of the TIF, the debt service on city borrowing is to be paid from the incremental taxes on tenants within the TIF boundaries, not by all taxpayers.
One complicating factor
The building of Discovery Parkway, its access roads and utilities actually costs a projected $12 million, but only $6.5 million is slated to come from the Innovation Campus TIF District.
The balance of $5.5 million is slated to come from another, overlapping TIF district that includes the Eschweiler Campus but none of the rest of Innovation Campus. That money exists in surplus from previous Research Park projects, but can only be legally unlocked if development occurs on the Eschweiler Campus.
The Mandel Group, a major Milwaukee-area developer, is the firm preferred by the UWM Real Estate Foundation to tackle the project. But there are disagreements about whether the Eschweiler buildings can be salvaged, and that development is still uncertain. In fact, Mandel wants TIF funds for that project, too.
If no development does occur in that TIF district — if the Mandel Group makes no formal proposal, or if the city does not accept whatever he might propose — then it could fall back to the Innovation Campus TIF to support the additional $5.5 million in infrastructure costs that has already been borrowed by Wauwatosa.