TIF help for apartments a concern for some officials

Port Washington aldermen on Tuesday stopped short of approving $2.6 million in tax incremental financing for Pier Street Landing, a 51-unit apartment building planned for downtown, but they agreed to begin negotiating a developer’s agreement that would lay out terms for any TIF  funding.

The request for funding came from Haley Dobre, owner of the Boerner Mercantile Building on Franklin Street who wants to use a parking lot she owns between Washington and Pier streets for the four-story apartment building.

The parking lot is within the city’s downtown TIF district, and Dobre is asking for the funds to help cover the cost of underground parking, stormwater management and relocating utilities on the site.

The TIF district, which was created in 2010, is expected to close in 2031, and including this project would add another year to it, officials said.

Ald. Mike Gasper said he is “on the fence” about the TIF request — but not, he said, because of the funding itself.

“I do not have concerns about the financial viability of this. It makes perfect sense for the city to do this,” he said. “My concern is the optics of how this will close out.”

That’s because Dobre’s request would normally be repaid over the next 11 years, but since the TIF district will have enough money to pay off all its debts — including the money requested by Dobre — by 2032, it could close the district then by paying her any outstanding funds then.

And that, Gasper said, doesn’t look right.

“Cutting a check for over a million dollars to a developer to close a TIF looks really bad,” he said.

Dobre is proposing a so-called pay-as-you-go TIF, in which she would pay the upfront costs and be repaid through the increased taxes on her property.

In a TIF district, the properties within the district continue to increase in value and are charged property taxes commensurate with that increase, but taxing entities such as cities, counties and school districts only receive the same amount of taxes they did when the district was created.

Any additional tax revenue generated by the development, called increment, is to be used to pay for infrastructure and similar amenities within the district. Once the costs are repaid, the TIF district is dissolved and the entire value of the property is put on the tax rolls.

Pier Street Landing is expected to increase the tax base by $19.7 million, officials said.

Taxes on the property would increase from the $1,600 paid today to an estimated $266,950 in 2032, when the TIF is closed.

Ald. Pat Tearney said he, too, is on the fence about the funding.

“I’m leaning against it, perhaps because I’m a little TIF’d out,” he said.

But, they both said, they are willing to negotiate with Dobre to see what happens.

Dobre reminded officials that typically developers have received TIF funds at the beginning of their project — something that doesn’t occur in this case because it is a pay-as-you-go project.

Gasper added that he does have some concerns about the project, most notably the fact that there would be parking on the first floor of the building, creating a 240-foot-long wall.

“The street should be activated,” he said, with doorways and windows that invite the public in and create a pedestrian-friendly experience.

But Mayor Ted Neitzke said that the city shouldn’t overlook the big picture.

“One of the things for us to keep in mind is the need for housing stock,” he said, adding the building will provide housing for people who will live in the community year-round.

“This will really infuse a greater vibrancy downtown,” he said.

Dobre, who made her case for TIF funding during the Jan. 6 Common Council meeting, noted that the building will also be home to two retail shops on its first floor, providing more reasons for residents and tourists to come to the downtown.

“The spirit of TIF (district) 2 was to bring development to downtown Port Washington,” she said, noting the parking lot she’s building on has been pegged for mixed-use development in the downtown plan.

TIF funding is needed for the project, she said.

“We need a little help,” she said. “We can only do this with the TIF assistance.”

Dobre said she plans to begin construction of Pier Street Landing in June, with completion of the project slated for next year.

To meet that timeline, officials said, they hope to have a developer’s agreement that includes possible TIF funding in February or March.