Data center TIF challenge paused for a rewrite

Ozaukee County Circuit Judge Adam Gerol took no action last week on a motion to dismiss a lawsuit challenging the City of Port Washington’s approval of a tax incremental financing district for the Vantage Data Centers Lighthouse Campus.

Instead, Gerol gave Great Lakes Neighbors United, the anti-data center organization suing the city, 30 days to amend its lawsuit.

“Sadly, we’re going to have to take this up all over again,” Gerol said of the city’s motion to dismiss at the end of the March 12 hearing. “That complaint doesn’t meet the law.”

After the amended lawsuit is filed, the city will have time to respond before another hearing is scheduled, Gerol said.

Gerol also ruled that Vantage Data Centers can be added as a defendant in the case, joining the city and its Joint Review Board.

The city, through Atty. Mark Schmidt, argued last week that Great Lakes Neighbors United did not prove its allegations and said the suit was not in the proper form.

“There are fatal defects in the complaint,” Schmidt said.

The lawsuit, filed by Atty. Joseph Cincotta, asks the court to declare the TIF district invalid, arguing it does not meet a minimum standard that half the property is blighted nor does it qualify as industrial land, despite the fact the city zoned it for an industrial technology campus district.

“There’s no standard for industrial use,” Cincotta told Gerol.

The suit also claims that the data center campus fails what is known as the but-for test — proving the development would not occur without the TIF district — arguing that Vantage does not need a TIF district to develop a data center campus.

But Schmidt said the Joint Review Board correctly found that a TIF district is needed, just as it found that the data center is an industrial use.

“The undisputed record shows conclusively those findings were made,” he said, adding that just because Great Lakes Neighbors disagrees with the findings doesn’t mean they weren’t made.

The lawsuit also claims that many of the expenses and costs the city will reimburse Vantage for through the TIF district are not allowed, particularly interest payments the city will pay Vantage.

Cincotta said there is no guarantee that the land in the district will significantly increase in value, telling Gerol the city’s claim “is not well supported with the facts.”

And, he argued, the TIF district will harm city residents by increasing their taxes to make up for the tax funding that would otherwise be realized from property in the district.

Cincotta acknowledged there are issues with the form of the complaint.

“It is not as well done as I should have made it,” he said. “I’d love to amend the complaint just to clean it up.”

The lawsuit brought by Great Lakes Neighbors United is one of several suits filed against the city regarding the data center.

Town of Port Washington resident Lynde Uihlein is suing the city for data center records she said officials failed to provide after she filed an open records request. A hearing in that case is set for May 29.

The Metropolitan Milwaukee Association of Commerce and other business organizations are suing the city to block an April referendum that would force any TIF district valued at more than $10 million to be put to a referendum vote before it is approved. Gerol denied a temporary restraining order in the case but has set an April 16 scheduling conference in the matter.