RACINE — When plans were announced this spring to transform a 20-acre swath of Downtown riverfront with a $65 million commercial-residential development, public officials noted that the project would require a great deal of public investment.
In addition to applying for historic tax credits, and all manner of grants, City of Racine administration officials and development staff said they would seek the creation of a tax increment finance district to help provide funding for necessary improvements in the area, dubbed Machinery Row.
On Tuesday, the City Council voted 13-0 to grant the administration’s request, approving the creation of Tax Increment Finance District 18. The vote is another step toward making the Machinery Row phase of the Root River Corridor Redevelopment Plan, called RootWorks, a reality.
Spanning 42 acres along Water Street, the TIF district will allow the city to funnel “increment” — property tax generated on new developments in the district — into a pot that can be used to help pay for improvements, like private developments, environmental cleanups, road construction and demolition projects. The city currently has 11 active TIF districts. TIF 18 will bring that number to 12.
The 20-acre redevelopment area for which Davenport, Iowa, developer Financial District Properties has an option to buy is located at the center of the TIF district on the southern bank of the Root River.
Located north of Water Street and east of Marquette Street, the area encompasses all of Azarian Marina, 726 Water St., and two large former industrial buildings constructed by J.I. Case Co. between 1908 and 1915. They were later sold to Western Printing and now have two different owners.
Funding help
Although the $9 million in historic tax credits that the developers netted for the project in late June have received a great deal of attention, city officials have noted that a TIF is necessary.
“Due to extensive investment required, the City has determined that redevelopment of the area will not occur solely as a result of private investment,” states a project plan drafted by public finance firm Ehlers. “The City finds that absent the use of (a) TIF, redevelopment of the area is unlikely to occur.”
That city’s plan for the TIF district anticipates expenditures of approximately $30.5 million for priority projects over the next two years, including street extensions, river bank improvements and the construction of a promenade. There could also be an additional $16.4 million for contingent projects, but those would only be undertaken if the tax increment generated exceeds levels anticipated.
The city could start collecting the tax increment on Jan. 1, 2016, explained the city’s Assistant Director of City Development Matt Sadowski, but only if there is actual tax increment being generated by that point.
Although the city is currently in the beginning stages of a development agreement with FDP, Todd Taves, a senior financial adviser with Ehlers, explained to aldermen that by approving the creation of the TIF they were not approving a development deal.
“This does not approve any development projects; it just puts the taxing infrastructure in place that allows you to collect the increment as those projects occur,” Taves said.
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(6) comments
Since taking office, Mayor Dickert has turned around failing TIF's and put them back in the black. The city has paid off and closed several TIF's as well. They have been very financially conservative in their efforts and should be commended for their work. TIF districts are used all over the nation to fund city improvements and match private investment by lending a sum of money on a projected (large-scale) property improvement and subsequent tax revenue - this sum is repaid over the course of 20 years (typically) with additional years paid into the fund to cover other improvements in the area. Machinery Row is a great way to use this important development tool and promises to be a great ROI for Racine and surrounding burbs.
You have got to be kidding!!! And this development is for whom? Certainly not for Racinians...and certainly not for transients...and absolutely not for tourists (of which there are none). Take a look around...open your eyes...
What do base your opinion on?
This is all corrupt and illegal.
They have been secretly planning and working on this for years creating committees, councils, businesses, and organizations so when the time came, they could play musical chairs when anyone questioned the corruption and payoffs.
They spent money without authorization. They created plans without authorization. Thwy applied for grants without authorization. They solicited and accepted donations without authorization and proper legal status. They threatened eminent domain without authorization and against the rules of the grant.
The mayor lied about an alderman to the entire city like he did about past employees, essentially framing an alderman for an illegal negotiation that he allegedly committed himself. The mayor is a habitual liar, and his corrupt friends are all liars. They break laws without any regard for the consequences, and perform RICO acts under the color of law.
The very people involved in the corrupt councils and committees are the ones who will directly benefit receiving cash, commissions and other kickbacks and contracts in the process. Investigate and follow the bread crumbs to more illegal and corrupt acts.
I was at this meeting. It is my understanding that when the council voted it voted to send this Tax Incremental District No.18 back to the Committee of the Whole for further consideration. Was this story prepared before the vote???? What is it I don't understand???? The mayor of the city was not even in attendance. Something is seriously wrong in this City. The expert who spoke on behalf of this development made little sense and Matt Sadowski made less sense than the expert. Then there was a vote....it did not pass; it went back to the Committee of the Whole. Please explain, Cara.
I just watched both meetings on what is still being called Belle TV at the public access hit on the City's website.. See and hear for yourself and make up your own mind. The matter regarding what is approved for the years of road work and sewer work required for this endless preliminary 'development' stage for this colossal mistake has been sent to the City Plan Commission (Not the committee of the whole which I stated in my comment 10 hours ago. Another executive appointed group - this one at which Brian O'Connell has undue influence along with others who benefit from this land grab....Look up the City Plan Commission. See any friends and supporters of the administration? Ray DeHahn was thoughtful and he decided that he as chair of this Common Council that he should not vote. His vote would only have brought in a tie. Maybe Greg Helding should have come to the meeting. But Greg Helding like the Mayor had other irons on the fire I guess.
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