Last updated on February 17th, 2020 at 11:09 am
The tax incremental financing district (TID) formed to develop the Century City business park on Milwaukee’s northwest side is struggling to pay off its debts associated with those redevelopment efforts. Under a new set of proposals, it could soon receive financial assistance from other better-performing districts that are located in the downtown area.
Milwaukee officials are slated to consider whether to shift money from three districts into TID No. 74. Formally named N. 35th & Capitol, the Century City TID has so far not generated any incremental value to pay off nearly $24.8 million in project costs.
Money would be transferred, or “donated,” from TID Nos. 46 (Grand Avenue/New Arcade), 49 (Cathedral Place) and 60 (Amtrak Intermodal Passenger Station). According to city documents, the donations would amount to nearly $13.4 million over the course of five years.
Public hearings for each of the three proposals are scheduled on Thursday, Feb. 20, during a Redevelopment Authority of the City of Milwaukee meeting, according to public notices. The proposals need approval by the Redevelopment Authority, Milwaukee Common Council and the Joint Review Board.
Even with these transfers, there are still $11.4 million worth of project costs remaining in the Century City TID.
In a written statement, the Milwaukee Department of City Development said it would look at other potential assistance in paying off that remaining amount through donations from other TIDs. However, the department said it has no other specific proposals it is immediately putting forward.
DCD said it remains optimistic that things will turn around for Century City and the TID.
“We knew there would be hurdles when work at Century City began,” DCD said in the statement. “We are laser focused on the goal — jobs and economic activity.”
City leaders created TID No. 74 in 2009 to facilitate the redevelopment of an 84-acre portion of the former A.O. Smith and Tower Automotive manufacturing complex. There, the city created the Century City business park and set a goal of creating 15 jobs per acre.
In all, more than $35.4 million was spent on the redevelopment work, including land acquisition, demolition, site preparation, installation of new infrastructure and other related activities, according to a project summary. Money for this work came from various sources, including district revenues, the city’s capital budget, federal and state grants, New Markets Tax Credits equity and land sale proceeds.
TID No. 74 to date has incurred total project costs of roughly $16.8 million. The district has generated no incremental revenue, and the incremental value of the district is negative, according to city documents. This leaves outstanding costs to be recovered in the district at nearly $24.8 million.
The district has not generated additional increment in spite of the development of the 53,000-square-foot Century City 1 building. This is largely due to the condition of the overall district, noted DCD officials.
“With over 1,000 properties in the district and the majority of them residential, the TID is still recovering from the Great Recession,” DCD said in the statement. “To date, even with the increase in value the TID received from the Century City 1 building, the TID’s total property value hasn’t increased.”
The three donor TIDs have generated enough tax increment to recover all related project costs.
Once a TID recovers or is near recovering all project costs, a review process takes place to determine potential future project costs, according to DCD. Also reviewed is the TID’s ability to donate to under-performing districts. Extra increment from a TID could also finance nearby infrastructure projects or go toward improving housing throughout the city before the district closes.
As such, the proposals also call for the three TIDs to finance various street and infrastructure improvements.
Century City has certainly seen some successes — Milwaukee-based Good City Brewing recently moved office and warehouse operations to the Century City 1 building, and Spanish train manufacturer Talgo Inc. has set up operations in a facility at the northwest corner of North 27th Street and West Townsend Street.
But a proposal to create up to 500 jobs at the business park was killed last year after it encountered opposition from activist groups and area residents. In September, Franklin-based Strauss Brands LLC announced plans to move to Century City and build a new 175,000-square-foot headquarters and meat processing facility. It initially appeared that the project would sail through the approval process, until protestors raised concerns calling the facility a “slaughterhouse” and Ald. Khalif Rainey, whose district includes Century City, in October announced his opposition to the project.
Strauss planned to initially have 250 workers at the facility, and would have potentially increased that number to 500.
Milwaukee Mayor Tom Barrett brought up the failed project earlier this week during his annual State of the City address.
“Unfortunately, some elected officials rejected a large new facility to be built by Strauss Brands,” Barrett said. “250 good jobs were turned away based on deliberately misleading false statements from people who put politics and naked self-interest ahead of the needs of Milwaukee residents.”
The opponents of the Strauss Brands plans argued that the facility would negatively impact the lives of nearby residents and the surrounding environment due to the nature of the work.