Owner of prime bluff land now wants TIF help

Developer who pledged not to seek city financing shocks Port officials by asking for $5.25 million subsidy

A SIGN AT the entrance of the proposed Prairie’s Edge subdivision on Port Washington’s south bluff seems to herald the state of the project, but on Tuesday developer Tony Polston asked the Port Washington Common Council for $5.25 million in tax incremental financing for his development. Press file photo
Ozaukee Press staff

A developer who proposed turning 35 acres of prime south bluff land into Port Washington’s largest subdivision without financial assistance from the city asked the Common Council on Tuesday for $5.25 million in tax incremental financing to pay for infrastructure.

It was an abrupt change for Black Cap Halcyon’s Prairie’s Edge project, which was touted by officials when it was proposed two years ago as a development that, unlike several others in the city, didn’t require public financing.

City officials said they were surprised by the request by developer Tony Polston of Black Cap Halcyon, who laid out his case for public support of the project in an hour-long presentation to the Common Council.

Mayor Marty Becker said after the meeting he was not just surprised but “disappointed” by the request.

“This was presented as a project that didn’t require a TIF,” Becker said. “If we wanted a TIF, he should have asked for it from day one. He’s changed the game.”

City Attorney Eric Eberhardt told aldermen not to offer any opinions or ask questions during the meeting, but several expressed concern about the request outside the session.

Ald. Paul Neumyer said he was “a little taken aback they’re asking for it now,” especially since Polston initially said he didn’t need it.

While he likes the proposed Prairie’s Edge development and understands circumstances have changed since it was proposed, Ald. Pat Tearney said one of the appealing things was that no TIF was required.

Tearney said he wasn’t surprised by the request, but he is concerned about it.

“TIF is supposed to be a tool for developments. Now, it seems to have become a tool for developers,” he said. 

Ald. Jonathan Pleitner said he “wasn’t thrilled” about Polston’s request, adding “the price tag is kind of hefty.”

And, he said, he’s leery about the message that approving a TIF district this far into the project would send. 

Ald. Mike Gasper, who has voted against many TIF projects and incentives, said he doesn’t like using TIF for projects being built on undeveloped land, noting the development tool was originally created to help improve blighted and contaminated properties.

Polston told the council that since proposing Prairie’s Edge in early 2017, the economic and construction world has changed with trade wars and large projects such as the Foxconn development resulting in significant increases in construction costs.

“We’re seeing more signs of economic stress,” Polston said. “We’re looking at some challenges now. We’re trying to address those.”

Increased competition in housing throughout the area, much of it supported by TIF funding, also impacts the development, he said. That includes the fact that the proposed Cedar Vineyard subdivision to the south has not been built, altering and making the sewer hook-up for Prairie’s Edge more expensive.

Prairie’s Edge is proposed to be developed over 10 years and include 34 single-family lakefront houses, 16 pocket neighborhood single-family homes, 20 townhouses and 156 apartments as well as 40,000 square feet of commercial space, and would add $90 million to the tax base — the equivalent of 8.5% of the current tax base, Polston said.

It would pay $1.5 million in property taxes, of which $500,000 would go to the city and $720,000 to the school district.

Over 25 years, he said, it would pay $32.5 million in taxes overall.

It would also provide the city with all of the $2.25 million it is to receive from the sale of the land to Black Cap Halcyon, Polston said, noting he has already paid more than $300,000 of this amount. 

The city sold the land to the company on a payment plan tied to construction deadlines, with officials believing work would begin last fall. The entire cost of the land must be paid by July 1, 2023.  

And, Polston said, because the city’s levy limits are tied to the amount of new construction, it would allow the city to increase its spending.

Delaying the project five years would reduce the taxes paid over 25 years by $7.2 million, Polston noted.

Polston told the council he has been working to mitigate his risks with the project, but has reached a point where he is seeking a city-funded TIF to cover infrastructure for the first two phases of the development and prepare the third and final phase for construction.

The funds would also offset the cost of the public lands in the project, he said, noting 60% of the property is open or green space.

Polston said his intent from the start was to privately finance the development, adding that he believes TIF should only be used where there is a direct public benefit. Prairie’s Edge provides that benefit, he said.

“The amount of TIF requested represents a tiny fraction of the monetary gains generated by the project for all taxing jurisdictions,” he said.

“We’re here to ask for everyone to weigh in and tell us, are we on our own or are we here to work together?”

Acknowledging that TIF districts and developer incentives the city has provided have been controversial in Port, Polston cited statistics from the Department of Revenue that shows of the 418 municipalities in the state using TIF districts, Port ranks near the bottom in its use, with only 1.53% of its tax base included in these districts. The state average is 6.41%, he said.

Port’s use of TIF over the past 10 years trails almost every community in southeastern Wisconsin, Polston said, and in the immediate area, the only communities with TIF districts that use it less are Cedarburg and Germantown.

But Ald. Dan Benning, a member of the Finance and License Committee whose district includes the Prairie’s Edge land, said that while he likes the project, he is concerned about the amount of tax money that would be deferred while a TIF district is in place.

“I was very surprised by this, especially the amount he’s talking about. It’s a lot of money and a lot of taxes to defer at this point,” he said. “I have very mixed feelings. I’m struggling with this.

“I think all of us have questions about why all the sudden this came up. I understand him trying to manage his risk. I don’t know that I see the city needing to have a role in a developer managing his risk.”

Pleitner said he would like to see Prairie’s Edge get off the ground, noting it is a forward-thinking, attractive subdivision that would appeal to many people and could benefit the city’s economy by adding residents.

If the amount of money sought and the life of the TIF district were limited, he added, it might make the developer’s request more attractive.

“I don’t like $5.25 million. If we can get it down and make sure we can get the TIF paid off earlier, maybe it’s something we could consider,” Pleitner, who is chairman of the Finance and License Committee, said. 

City Administrator Mark Grams said if the council is inclined to approve a TIF, a pay-as-you-go TIF in which the developer fronts the costs but is repaid through the increased taxes on the property, might be an option for Prairie’s Edge.



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