The city of Milton is taking steps to facilitate the development of a chocolate factory that initially could bring in 60 jobs.

The proposed development by Clasen Quality Chocolates includes 169 acres of land north of Putman Parkway and 8 acres west of County M, said City Administrator Al Hulick, who spoke Thursday at virtual meetings of the Joint Review Board and the Milton Plan Commission.

Clasen specializes in chocolate and confectionery coatings. It has facilities in Middleton and Watertown with corporate offices and an innovation center in Madison.

“CQC intends to develop their site in three phases, with their first phase being 390,000 square feet, their second probably doubling that and their third probably tripling that,” Hulick said.

In the first phase, Clasen will create 60 jobs and expects to “ratchet that up rather quickly,” Hulick said. The company could move to phase two as soon as 2022, he said.

“At this point, there’s not a lot of risk on the table because one, we haven’t given Clasen anything yet and two, we don’t have anything invested in it other than the creation of the district,” Hulick said.

By “district,” he means the creation of Tax Increment Financing District 11.

Tax increment financing is a tool for governments to attract private investment. It allows municipalities to acquire property, eliminate dilapidated buildings, make improvements such as sewer, water and streets and charge the cost to a TIF district.

The municipality then offers sites in the district to businesses for free or at great discounts to draw development. As the district’s property value rises because of the new investment, the increases in property taxes are used to repay only the municipality’s costs. When the costs are paid or the district’s limited life expires, the new property taxes are distributed among all taxing jurisdictions, such as school districts and the county.

If all goes according to plan, Hulick said Milton will be only the second municipality in Wisconsin’s history to do a “simultaneous creation and subtraction” involving TIF districts.

Because of the amount of equalized value it has in TIF districts, Milton must subtract from an existing district before it can create a new one.

If the city could add land to an existing TIF district, it would, Hulick said.

“By state statues, no municipality can ‘TIF’ more than 12% of its equalized value,” he said.

Milton is at 12.5%.

“We’re not allowed to add land to an existing TIF district without doing a corresponding subtraction,” he said.

Simultaneous creation and subtraction is a TIF feat that requires not only the coordination of many moving pieces but the goodwill of an existing company.

The city found that good will in Charter NEX.

“The initial question is always, ‘What’s in it for us?’” Hulick said. “And the answer is nothing (for Charter NEX).”

The move out of a TIF district doesn’t change anything for Charter NEX as far as its tax bill, he said.

State statute also says a municipality may not subtract parcels and add them back into a TIF district in the same year. The only option is simultaneous creation and subtraction, which would “allow us to fall below the 12% threshold,” Hulick said.

That value is about $4 million, he said.

Because TIF District 6, the city’s oldest district, will expire in three or four years, that’s where the city looked to subtract value.

“We contacted Charter NEX and asked if they would be willing to be removed from the existing TIF 6,” Hulick said. “Because they are right on the boundary, it made for kind of an easy subtraction.”

Hulick said Charter NEX is actually valued at about $7 million.

“They were very accommodating to our request and have agreed to be removed from the TIF,” Hulick said. He noted that Charter NEX’s tremendous growth has kept the company from needing to use TIF funds.

“It was kind of a double plus for us,” he said, because the new district could be created and Charter NEX’s property value could return to overlying taxing jurisdictions.

The plan commission agreed Thursday and approved the plans to amend TIF District 6 and create TIF District 11.

The new district will encompass the entire Clasen development site and parcels on the periphery that are located in an existing TIF district.

The city will acquire about 55 acres of land that will be in TIF District 11 to support the project.

“There’s a lot of moving pieces here,” Hulick said. “The vast majority of those pieces are directly related to the Clasen Quality Chocolates project.”

In all, Clasen is in the process of acquiring more than 190 acres—some from the city but most from private landowners.

Some of that vacant farmland lies outside city limits and will need to be annexed, Hulick said.