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A Tosa State of Mind

Alderman Dennis McBride represents Wauwatosa's 4th District. An attorney and graduate of Wauwatosa East High School, Ald. McBride strives to be an effective, thoughtful, and nonpartisan representative for his constituents and for his hometown.

We can have it all

Tonight, the Wauwatosa Common Council will make a historic decision.  It will vote on a proposal to create a tax incremental financing (TIF) district for an 89-acre parcel on the County Grounds to be purchased by UW-Milwaukee from Milwaukee County.

Approving the TIF will promote economic development, protect an important environmental habitat, and preserve historically significant buildings.  It also will be prudent from a financial perspective.  
 
Currently, Wauwatosa gets no property tax money from the land that will be used for the UWM project.  That is because the land is County-owned, but that will change after UWM converts the land to taxable use.  Our private sector consultant, Springsted, tells us that, conservatively, we can expect the UWM project to be worth at least $100 million when it is fully built out.  That will bring an enormous amount of tax revenue into Wauwatosa from land that currently provides no tax revenue at all.  That $100 million will exceed 2% of the City's current tax base.
 
Under state law, when a TIF is created, the money that would be collected in property taxes (for all taxing entities, including the Wauwatosa School District, MATC, Metropolitant Sewerage District, etc.) is used to pay off any money borrowed by the municipality (in this case, Wauwatosa) for the TIF.  In other words, for the life of the TIF, the money will go only to Wauwatosa.  A TIF can exist for up to 27 years, but Springsted expects the UWM TIF to be paid off in about 20 years.  
 
Our TIF district for the Milwaukee County Research Park, TIF #2, was only worth $4 million when the City created it about 10 years ago from County land that had been mostly tax-exempt.  Now that land is worth $230 million, and is due to come on the tax rolls in 2013, many years before that TIF was scheduled to expire.  Again, this will bring an enormous amount of tax revenue into Wauwatosa for land that previously provided almost no tax revenue.  This additional revenue will allow us to hold down property taxes in the future and continue to provide the municipal services (streets, garbage collection, etc.) that we all need.
 
All of this is good news for Wauwatosa, but there is more.  For the new TIF, the City will borrow up to $12 million, but only in phases.  We will not borrow any money unless and until UWM actually buys the land and developments are guaranteed there.  Any money borrowed will only be borrowed as developments occur on the TIF property.  The money borrowed will be used to prepare the land for development -- by building water and sewer mains, extending electricity lines, and building a road -- and will not be paid to UWM or to any private developer.
 
When UWM buys the land, the property will immediately have a taxable value of $13.55 million, which will provide $200,000 a year to pay off the TIF.  The federal government has given UWM and the City a grant of $5.4 million for the construction of a "business accelerator" building in the UWM park.  That money can be used to build the building and pay for the infrastructure which otherwise will be provided by TIF money.  That could reduce our borrowing costs.  Also, the new building will be taxable, and add to the overall value of the parcel.  In the meantime, UWM will sell the historic Eschweiler buildings to one of the four development companies that are interested in renovating them and adding new developments.  That is expected to increase the value of the project by another $16 million.
 
The combination of the land purchase value, the value of the "accelerator" building, and the built-out Eschweiler area is expected to exceed $32 million even before other buildings are built in the UWM park.  These early developments should throw off enough money to pay for the TIF financing by themselves.
 
For all of these reasons, the UWM project is a safe deal from a financial standpoint, and an essential deal if we are to continue to make Wauwatosa an attractive place to do business. 
 
In addition, the UWM project will set aside 11 acres of land to preserve an important and much-loved Monarch butterfly habitat and preserve the Eschweiler buildings, which are on the National Register of Historic Buildings. 
 
The County has allowed the Eschweiler buildings to fall into serious disrepair, and any private developer of the land, which the County is determined to sell to plug its budget holes, is not likely to guarantee to protect the butterfly habitat, as UWM has committed to do.  The County has agreed to create a new 55-acre park just east of the butterfly habitat to extend the habitat and satisfy the desire of most Wauwatosa residents to preserve open space on the County Grounds. 
 
Some developers want to tear down the Eschweiler buildings, build over the butterfly habitat, and maximize the economic potential of the parcel.  At the other end of the spectrum, some advocates have wanted to ignore economic development, allow the Eschweiler buildings to crumble, and only preserve the butterfly habitat.  Adopting either of these views will not meet the needs or desires of most Wauwatosans.  Wauwatosa wants it all.  
 
By supporting the UWM project, we can have it all.  We can create $100 million of new, taxable development, protect a key wildlife habitat, and preserve historic buildings. 
 
The UWM project is a political compromise in the best possible sense.  Tonight, we will make it clear:  in Wauwatosa, we support jobs, the environment, historic preservation, and education.  Tonight, I will proudly cast my vote in favor of a brighter future for Wauwatosa.
 

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