RACINE — Two proposed Tax Increment Districts, or TIDS, to fund two major construction projects are set to go before the City Council at its next meeting.
The next City Council meeting is scheduled for 7 p.m. on July 21.
The TID shuffle
The proposed boundaries for TID 24 are from Fourth Street, to Lake Avenue to Fifth Street, which includes the site of the proposed hotel attached to the to-be-expanded Festival Hall convention center.
All three of the parcels, which are owned by the City of Racine, are currently included in TIDs 2 and 9, but if the new TID is approved, will be relocated to TID 24. According to documents prepared by Ehlers and Associates, because the parcels are tax exempt, their removal would not impact the districts’ incremental value and cash flow into TIDS 2 and 9, though it would reduce their base value.
The city predicts that the hotel project would create approximately $15 million in incremental property value within the district and assumes that a second hotel, projected to be build in 2030, would create an additional $10 million. The feasibility study estimated that the TID would generate enough revenue to pay off of its project costs within 21 years of the 27-year life of the TID.
Part of the amendment to TID 9, which includes the Johnson Building at 4001 Main St., is transferring one of the parcels that will go into TID 24 and a total of $9.8 million over a 15-year period, or approximately $655,000 annually. According to the proposal, TID 9 collects in excess of what is needed to pay down its debt and has been contributing to other TIDs since 2018.
The proposed boundaries for TID 25, which is set to finance the redevelopment the Horlick Malted Milk complex, are from the northern boundary of the complex to Northwestern Avenue, then to State Street to Summit Avenue and then back up to the northern border of the Horlick complex.
The city estimated phase one of the Horlick project will generate $10.7 million in incremental property value and the subsequent phases would create an additional $40 million. Based on those projections, the district would generate enough increment to pay off the phase one expenditures within 24 years of the 27-year lifespan.
TID 14, which is located at the Walker Manufacturing site, if its amendment is approved would transfer $3.15 million to TID 25 to finance the Horlick project. That TID is scheduled to close, barring any new developments within the district, by 2028.