Motion to block TIF referendum gets day in court

Ozaukee County Circuit Judge Adam Gerol is expected to decide Monday whether to grant a temporary restraining order that would stop the City of Port Washington from putting a referendum question on the April ballot asking residents if voter approval should be required before any new tax incremental financing districts are created.

Gerol said during a Feb. 13 hearing on the motion that he will make an oral determination in the case on Feb. 23, noting that wording for the April 7 ballot is due later that week.

The lawsuit was brought by the Metropolitan Milwaukee Association of Commerce and a number of other business organizations as well as Port resident Sid Arthur and his business Sid’s Sealants, who argue that the Legislature has delegated the process of approving TIF districts to municipalities and Joint Review Boards, not voters.

The suit also argues that the referendum measure — approved by the Common Council after Great Lakes Neighbors United, an anti-data center organization, petitioned for the ballot question following the city approval of a TIF district for the Vantage Data Centers Lighthouse Campus — is vague and misleading and, if approved, would cause irreparable harm to the city and its taxpayers.

Attorney Jonathan Smies, who is representing MMAC and the other organizations, told Gerol that TIF approval is not something that can be the subject of so-called direct legislation.

“It is an improper subject of direct legislation,” Smies said, noting that state statutes have a clearly defined and detailed procedure for approving these financing districts.

“That process is firmly established,” he said. “What we have with the proposed referendum is something that would throw a monkey wrench into it.”

But Gerol said the measure would be a sort of “starting gun” to see if voters support a TIF district.

“This would basically say before you do it, you’ve got to see if the neighborhood approves it,” Gerol said, noting voting is one of the most cherished rights people have. “Why would that be wrong?” Wouldn’t in some way elected officials benefit by learning the will of the people?”

“The public would have more than a voice. They would have a veto,” Smies said.

City attorney Matt Nugent, noting the city essentially agrees with MMAC’s position, said the legislature chose not to require a referendum for TIF districts when it wrote the laws governing them, and Smies noted that the proposed ballot question doesn’t call for a referendum to be the first step in the process of creating a TIF district.

  They also argued that the referendum question is ambiguous, noting a vote would be required for TIF districts with “large” capital expenditures or a base value or project costs of at least $10 million, but the term large isn’t defined clearly.

If the ballot measure is approved, Nugent said, the ambiguities will make the law difficult to enforce and implement.

Gerol questioned how asking voters their opinion on the question would cause harm, and Smies said the mere fact it’s being considered will stifle development in the city.

“There would be a chilling effect,” he said, and the city could lose out of businesses and developments it otherwise might have gotten.

But Gerol said if voters say yes to a referendum question it could be a positive thing for the community.

“Port Washington could be viewed as the best place to do business in the state,” he said.

Gerol noted that the question of whether to require a referendum vote for TIF districts “is a matter of statewide concern” and he questioned who is representing voters in the matter.

Great Lakes Neighbors United is considering whether to join the case as an intervening party, a spokesman told Ozaukee Press.

Additional briefs and documentation were to be submitted to Gerol for consideration by Feb. 19.

“I’ve got a lot of questions. This subject is immense,” he said.