City Using Downtown TIFs to Bail Out Century City
Overperforming downtown development districts will repay debt used to create Century City business park.
Three downtown tax incremental financing (TIF) districts will be used to bail out the district formed in 2009 to create the Century City business park near N. 35th St. and W. Capitol Dr. and pay for downtown paving and public infrastructure projects,
Under files scheduled for their first review next week, the TIF districts used to fund the Cathedral Place parking garage, early 2000s Grand Avenue Mall redevelopment and Milwaukee Intermodal Station would “donate” a total of $13.4 million to salvage the Century City TIF district.
If everything had gone according to plan at Century City, new development would have raised property values and generated incremental property tax revenue that paid back $15.6 million in debt plus interest used to acquire, clean up and build new public infrastructure on the 84-acre campus once occupied by Tower Automotive. The district was expected to close in 2035, one year shy of its maximum legal life in 2036.
Instead district property values have fallen, even as companies like Talgo and Good City Brewing have moved into the area. As allowed by state law, the three districts will donate excess revenue to help retire the city’s TIF debt associated business park. A city report indicates the Century City TIF has $24.75 million in debt at the moment when financing and carrying costs are included.
The Milwaukee Intermodal Station TIF district, which includes the station property and the adjoining properties, was created in 2005 to fund the development of the new train station. Ironically, it itself once received donations totaling $7.9 million. It’s still short $3.7 million in anticipated incremental property value as of 2018, but property values have increased in recent years and the district will be used to contribute $1.37 million to Century City over the next five years. The city, taking advantage of a state law that allows districts to fund public infrastructure projects within a half mile of the district, would also contribute $170,000 to paving W. Wells St. from N. 6th St. to N. 12th St. as part of the proposed amendment.
The New Arcade TIF district was created in 2001 to support the redevelopment of the Grand Avenue Mall. The district would contribute $4.27 million over the next five years to the Century City TIF district. The district would also contribute $388,000 to paving W. State St. between N. Old World Third St. and N. 9th St. and N. Broadway between E. Kilbourn Ave. and E. Juneau Ave. as part of the proposed amendment. An additional $300,000 would be appropriated for “improvements to amenities on streets.”
The Cathedral Place TIF was originally created in 2002 to fund a $25.4 million, 940-stall parking garage built into the Cathedral Place tower. The building, a combination of office space and residential condominiums, was completed in 2003. It has been overperforming for years, having been tapped as one of the TIFs used to fund the city’s local funding share of The Hop. It will now contribute $7.75 million to Century City. An additional $1.8 million will be used for public infrastructure improvements to the perimeter of Cathedral Square Park.
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