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Two proposed city TID districts

Maps of the city's two proposed new TID districts are shown here with the brick streets in the 1800 block of College Avenue shown in the background. The 1800 block of College Avenue is in the proposed TID 23 and funds could be used to maintain the historic brick street. 

RACINE — Two new tax districts aimed at stabilizing neighborhoods through home improvement are nearing finalization.

The City Council approved the districts on Monday night with less than two hours to spare before a deadline that could have set plans back for a year.

Next, the districts must be approved on Oct. 7 by the Joint Review Board, a body that has representation of all taxing entities affected by the city TIDs

Once approved, the city will have 15 months to create plans for what to do with the money captured in the neighborhoods.

Mayor Cory Mason, who pushed to create the districts, wants to use 75% of the money to be directed at grant and/or loan programs that would help homeowners pay to improve and repair their homes.

And then the remaining 25% of the money would be set aside for public infrastructure within the districts — such as curb repair, installation of crosswalk ramps, resurfacing roadways, or possibly improving/installing broadband internet. One idea the mayor acknowledged was improving the four-block portion of College Avenue made with bricks.

The specifics of the plan are not set in stone yet; the city has until Jan. 1, 2021 to lay that out.

According to city officials, the creation of these two districts won’t keep money out of the city’s coffers, but might slow down the lowering of tax rates.

What’re these districts?

The districts — known as Tax Increment Financing District No. 22, which is on the north side between Lake Michigan and Northwestern Avenue, and Tax Increment Financing District No. 23, which is on the south side between Lake Michigan and Center Street — will collect money like this:

  • When values of properties within the districts increase, the increased taxes to be paid by those property owners will be placed into a fund. The money in that fund can then be distributed back into the respective district whether it be through infrastructure improvements or home grants and loans; how exactly that redistribution will occur remains to be seen, although the mayor promised that the money generated within those districts will be spent within the districts.

Shannon Powell, director of communications for the City of Racine, said that this plan won’t affect the city’s general fund. Because of state-imposed levy limits instituted in 2013, municipalities’ tax levies can’t increase without new construction. And so, even as property values increase within the districts, the city wouldn’t be able to see any new revenue for its general fund.

Had they not been created, increased property values within these districts could only have been used to decrease tax rates, Powell said, and not been able to help the city with upkeep or directly assist residents in taking care of their homes.

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The two districts’ boundaries were selected because they had a “large variety of property types,” according to City Assessor Bill Bowers. As such, some more stable properties would be likely to see their property values grow, and that increased tax revenue could then be used to help their neighbors in less stable positions.

Concerns

Voting in opposition to the creation of the TIDs were aldermen Sandy Weidner, Carrie Glenn and Henry Perez.

One of the major issues Weidner had was the speed at which the districts were being approved — on the day of the Sept. 30 deadline and only two weeks after being proposed.

TIDs like Nos. 22 and 23 are also unprecedented in Racine, which also raised a concern for Weidner. Historically, Racine’s TIDs have been set up around specific, large-scale, private redevelopment projects, such as the @North Beach apartments or Regency Mall.

However, there is a precedent. Kenosha and Milwaukee both have used TIDs to support neighborhood stabilization projects.

“In passing a TID such as these two … we would further stabilize neighborhoods within these districts by providing grants or low-interest loans to homeowners within these boundaries so that they could provide maintenance to homes,” 5th District Alderman Jen Levie said. “This is a great opportunity for our city to try out.”

Before Monday’s meeting, Ken Yorgan, a Racinian who ran as an independent for Congress in 2018, said he is concerned that by creating these districts the city was considering the urban areas blighted. Yorgan said he lives within the TID No. 22 area.

Powell explained that this concern is based on a misconception. Although TIDs can be set up around blighted areas, they don’t have to be.

In an email, Powell explained: “We are not using the blighted area designation. Both Districts are designated as being ‘in need of rehabilitation or conservation’ — an important distinction — based on a finding that at least 50% of the territory within them meets that condition. 69% of the territory within TID No. 22 and 64% of the territory within TID 23 meets this condition.”

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