Elkhorn hoping for more development with new tax incremental financing district
ELKHORN—The city green-lighted creation of a tax incremental financing district spur development and “hopefully” put vacant property to use, City Administrator Sam Tapson said.
Although there are no specific development projects identified now, the city is interested in manufacturing, commercial, retail or perhaps a hotel as possible developments in the district, according to the project plan.
The district's boundaries make a bowtie shape around the Interstate 43 and Highway 67 interchange.
The 142-acre district “will accommodate commercial and industrial manufacturing operations,” Tapson said. “There are a couple of projects that we've been working with that hopefully will fill in the vacant property.”
Tapson added there are no commitments at this point. While negotiations are ongoing, he said he could not provide names of interested parties.
The Joint Review Board, which approved the project plan, consists of representatives from the city, Walworth County, Gateway Technical College, Elkhorn School District and the public.
The groups were on the board because they have stakes in the taxes from the district's properties, Tapson said.
“The taxes that are generated when development occurs go to the city to pay off the debt that enables the project to be developed,” he said. “So they have a real vested interest in what happens.”
Tax incremental financing districts allow municipalities to provide incentives for development, Tapson said, particularly in manufacturing or commercial situations.
One of the benefits would be added job opportunities, he said. The project plan calls for new developments to create about 100 jobs over the life of the district.
Without the district, “development of the area is unlikely to occur,” the plan states.
The preliminary cost for the district is $12.5 million, though that number could change.
The city projects improvements will add $46.5 million in value. That is “because of new development, redevelopment and appreciation in the value of existing properties,” according to the plan.
A possible downside occurs when municipalities build infrastructure before they are sure development will come to the district, Tapson said.
“We're not gonna rush around and (be) putting in roads and such until we have a definitive plan in hand that we can work with,” he said.
The district, which the city calls TID 4, will be the city's only active tax incremental financing district.
This spring, the city closed District No. 3. District No. 1 and District No. 2 have been closed for years, Tapson said.
The recently closed district, which was on the north side, produced a surplus, although Tapson said not all sites in the district were developed. Still, the developed areas allowed the city to retire all of the debt.
The new district is expected to close in 2034 or 2036, depending on if some costs are recovered, according to the plan.