With the annexation of 115 acres from the town of Milton and approval of a tax increment finance agreement, Clasen Quality Chocolate moved closer to building a 390,000-square-foot facility in Milton.

The Milton City Council took several actions Thursday, including passing an ordinance to annex the land.

Clasen intends to buy the land from private owners to create a 169-acre site in Crossroads Business Park on the city’s east side.

The company specializes in chocolate and confectionery coatings and has facilities in Middleton and Watertown and corporate offices in Madison. In its first phase of development in Milton, Clasen plans to build a manufacturing and distribution facility just north of Putman Parkway by the end of 2022.

City Administrator Al Hulick said the number of new jobs could increase from at least 50 to “hundreds” in subsequent development phases, which are under consideration but do not yet have dates.

“They’re talking about the facility tripling in size over their subsequent phases and their number of employees to quadruple or more,” he said.

The company has committed to create a projected taxable value of no less than $29 million by the time phase one is finished.

“This is a ‘pay-go’ TIF development agreement,” Hulick said. “As increment, or as taxes are generated from the creation of that project, the city will provide an incentive close to that increase in value. It actually works out to be about 85% of the value they create they would receive.”

The total incentive is $5.387 million over 12 years or whenever Clasen’s projected “increment”—increased property taxes generated by private development—reaches the total incentive amount, whichever comes first.

“It is to their advantage to create a pay value higher than what they are projecting so they can recoup their incentive quicker,” Hulick said.

As part of the agreement, Clasen agrees to buy 9.1 acres from the city, extend Putnam Parkway to the entrance of the facility site and extend a rail line about 3,500 linear feet from west of Penn Color to the site.

The city, in turn, agrees to sell the 9.1-acre parcel to the company, a deal that likely will close early next year. Other land is being acquired from private landholders.

For the annexed land, the city will pay the town a total of $474.15 over five years. The amount is based on what the town levied in taxes, and the town has filed no objection to the annexation. The petitions were submitted by the William R. and Jacqueline F. McNall Revocable Trust, which owns 64.76 acres, and the Van Horn Living Trust, which owns 50 acres.

With the annexation, the city now looks to finalize the creation of TIF District 11. The Joint Review Board is expected to consider creating TIF District 11 and amending TIF District 6 today.

Hulick said the city and Clasen are working with the Office of the Commissioner of Railroads, Watco Companies, Wisconsin and Southern Railroad, and the state on the construction of a rail spur.

The company intends to start construction on the spur, Putnam Parkway and the facility as soon as possible in 2021, Hulick said.