City of Oak Creek

Common Council Report

Meeting Date:  December 20, 2005

Item No.:        

Recommendation:  That the Council authorizes staff to take steps to form a tax increment financing district for the Urban Village area.

Background:  The draft 27th Urban Village Implementation Plan, prepared by HNTB under the guidance of the 27th Street steering committee, and recommended for approval by the CDA, made specific recommendations with respect to implementation of the plan.  One of the primary action steps recommended in the plan is the establishment of a tax increment financing district, or TIF.  The draft plan states

“To provide funding for some of the action steps identified in this plan, a revenue stream is needed.  With an increase in tax base and the improvements needed to promote and foster that tax base, establishing the TIF district is a key catalyst project to jump start some of the improvements.  In establishing the TIF district, the City will have to identify which projects will be funded by the TIF.  The City will need to hire a firm to complete the TIF study and craft enabling resolution language as well as hire a financial consultant to prepare the benefits and analysis of the TIF as well as assist the City in its long-term management of it.”

The plan goes on to further indicate that support infrastructure will be a critical component of the project.  While most of the basic services exist in the corridor, there are several other initiatives that need to be implemented to create a comprehensive development package.  Here are some of the infrastructure projects that could be funded through the TIF district.

Sanitary Sewer – Sanitary sewer currently exists along Drexel Avenue near 20th Street.  In order to service the majority of the urban village area, this sewer will need to be extended.  A further complicating factor is that the sewer is planned to run through a substantial amount of parkland owned by Milwaukee County. It would be difficult to recover any costs from the County through assessments since no users within that portion of the park would make use of that sanitary sewer.  Thus it makes sense for this critical infrastructure component to be included in the district.

Stormwater management – Given the level of development planned for the urban village, and the coordination required to achieve its fullest affect, it would be impractical to require individual stormwater management ponds for each aspect of the development.  Also, given the value of those properties, the use of that acreage for scattered stormwater management ponds may not be an efficient use of that space.  Regional stormwater management would not only be a more efficient use of that space, it could be designed in such a manner to be an aesthetic element to the development.  The possibility even exists, and the natural contours of the land suggest, that this stormwater management area could function well within some of the County-owned land in the urban village area.

Access management - The 27th Street Access Management Plan (the adoption of which is currently pending by the City), as well as the adopted 27th Street Corridor and Urban Village plans, all recommend some form of access management on 27th Street.  As the only planned signalized intersection along 27th Street between Rawson and Drexel Avenues, the existing intersection with Northwestern Mutual Way in the City of Franklin will be a critical infrastructure project, not only from the perspective of providing the main point of access to the urban village, but also to establish a gateway to the village and residential areas along Falk Park, and to set the standard for the remainder of development within the village.

Roadway Improvements – There likely will be significant roadway improvements needed to the public streets along the periphery of the urban village.  Drexel Avenue stands out as a public street that will need reconstruction and improvement both in terms of capacity and aesthetics.  This likely would be the case during the earliest phases of the urban village, but would become increasingly important when the Drexel Avenue interchange is constructed.

27th Street Streetscape  - An item on this evening’s agenda discusses the merits of working cooperatively with the City of Franklin and the Wisconsin Department of Transportation on drafting a plan for streetscape improvements to 27th Street.  A proposed memorandum of understanding with the City of Franklin suggests that Oak Creek’s share of the money for that study be repaid once a TIF district is established for the area.  The physical streetscape improvements recommended by that plan (landscaping, light poles, gateways, signage, etc..) could also be funded through the district.

Even though the City has five active TIF districts, it has been several years since the last one was created.  The previous districts were much smaller in size, and were relatively straightforward.  None of these approach the same level of complexity that the urban village district would face.   Also, the rules adopted by the State of Wisconsin Department of Revenue have changed significantly since the creation of the last TIF district in the City.  It is likely that professional assistance will be required to prepare the project plan and financial documentation necessary for the City to establish the district.  The costs incurred for the services to establish the district could also be funded through the district.

The Common Council is being requested to authorize that the City take the necessary steps necessary to form a tax increment financing district for this mixed use development.

Additional information on the use of TIF districts is contained in the attached report from the nonpartisan Public Policy Forum.  This report is also on their website. (http://www.publicpolicyforum.org/pdfs/2005TIFreport.pdf).

Another source for TIF information is the Wisconsin Department of Revenue. (http://www.dor.state.wi.us/slf/tif.html)

Fiscal Impact:  The costs incurred in the planning of a TIF district are eligible to be reimbursed as part of the district.

Prepared by: Doug Seymour, AICP Director of Community Development

Fiscal Review by: Beverly A. Buretta, CMC City Clerk