Oak Creek considering new TIFs: One may link to Drexel Town Square, another may benefit from Foxconn

OAK CREEK - The city is considering three new tax-incremental-financing districts —one may link with Drexel Town Square, another could benefit from the Foxconn development in Racine, and the third would breathe new life into a desolate parcel.

The common council voted Oct. 17 to allow city staff to move forward. Director of Community Development Doug Seymour said the council was not approving any TIF, but simply allowing staff “to do the homework” prior to presenting to the plan commission, council, and joint review board.

A TIF district is typically enacted in an area that is blighted or has some other factor that could be a detriment to development. Funds from any incremental increase in property taxes within the district are reallocated to public improvements that are intended to encourage investment within the district.

Former District 3 Alderman Mark Verhalen spoke re-emphasized that he thinks the city has too many TIFs.

“You assume more risk with every TIF you do,” he said.

Since one goal of TIFs to spur development, Alderman Ken Gehl responded that many developers see Oak Creek as “a place to do business.”

First TIF

Since the meeting, the city has engaged Vandewalle Associates to help create TIF plans, according to City Administrator Andrew Vickers. The first TIF is located north of Drexel Town Square along Drexel Avenue while the second is an environmental remediation project at 6th Street and Rawson Avenue.

Vickers said he expects the boundary of TIF District 11 – which encompasses Drexel Town Square – will likely be extended to include the nearly 6-acres on Drexel Avenue, which currently includes a self-storage facility.

Seymour said both a standalone TIF and combining with the DTS TIF No. 11 will be considered. He said the city wants to determine how to best leverage the success of Drexel Town Square to the adjacent property.

Brian Adamson of ICAP Development said two of the westernmost parcels would be redeveloped into a “retail facility,” likely including a 22,000 square-foot anchor tenant. Discussions with the owners of the eastern property are ongoing. Adamson said he’s hoping to bring all the properties in as one with ICAP hoping to start construction in spring 2018.

Second TIF

The second TIF district, at 6th Street and Rawson Avenue, will be its own new 10-acre district, Vickers said.

HSA Acquisitions Inc. has been looking at this site for construction of a 180,000 square-foot industrial facility. Mayor Dan Bukiewicz called the property “neglected,” and Alderman Ken Gehl said it’ll be good to get this “ugly piece of property back on the tax rolls."

“It’s a dirty site, but we’ll be able to clean it up,” said attorney Brian Randall of Friebert, Finerty & St. John, who represented HSA at the meeting.

Vickers said those two TIFs are ready to go immediately. The third potential TIF district, for a Class A business park at 13th Street and Ryan Road, is a bit more complicated, however.

Third TIF

“Our discussions are more preliminary on that one in that we are early on in discussing the actual business deal,” Vickers said.

One of the bigger issues with this location is a land exchange would have to happen since some of the property is County-owned land. Additionally, an emotional component was discussed with some property owners having some of the land in their families for around 100 years.

Mike Faber of Capstone Quadrangle said work has been ongoing for 13 years for this parcel and there are currently three prospects for the business park. He also said he is excited about current market conditions.

Faber called the work being done in Racine County with Foxconn “icing on the cake” for such a development. He said the massive project just south of Oak Creek along I-94 might have a spillover benefit on Oak Creek to the north.

“I would frankly be surprised if we didn’t see some sort of effect from that,” Faber said.

One special feature of the business park highlighted at the meeting was what Faber called a “gathering place” to preserve the history of a railroad that went through the property in the 1800’s.

Bukiewicz called work on this TIF due diligence by the city. He said this location has a lot of moving pieces and this would get it prepared for whatever could come.