On a 3-2 vote, with trustees Gary Herzberg and Erin Moran not present, the Waunakee Village Board voted Monday to explore a Tax Increment Finance District (TID) overlay to funding the business park expansion.

The expenditure period for TID 3 of the Waunakee Business Park has ended and the district is due to close in 2023.

At Monday’s meeting, Joe Bukovich of MLG, the brokerage firm that partnered with the village to develop the business park, proposed the overlay district to fund infrastructure improvements to the north and east, east of where Frank H Street ends.

Bukovich said over the last 3 ½ years, MLG had sold nine different properties in the business park, seven to new business.

“In order to capitalize on some of the momentum and help develop some of the areas that aren’t developed yet and continue economic development in the business park, we are requesting the creation of a TIF overlay for the park,” Bukovich said.

Bukovich told the board this would add 20 acres along Hwy. 19 and 11 ½ acres near Prairie View Court.

MLG would borrow the funds for the infrastructure improvements costs, which could include grading, sewer and water extensions, along with stormwater facilities, to make the sites shovel ready. The village would facilitate with engineering.

Bukovich explained the risk-reduction measures in the financing, constructing the improvements only on sites under contract for purchase. One potential use north of the Frank H Street extension would require a detention basin, Bukovich said, and that could be the first phase. Sewer extension north of Frank H Street would allow for a 2-acre user as the second phase. The last phase would be to extend Frank H Street and the utilities to the property line.

MLG would also seek a change in the land use from business park to mixed use to allow for light industrial, commercial and office uses along Hwy. 19.

“We actually have prospects for the whole 20 acres … it could be a really easy deal if both of them come to fruition,” Bukovich said.

According to a memo to the village board, the prospective development would include a free-standing gymnastics training studio, a non-denominational church and a third building to be determined on 6 acres north of the current Frank H Street extension. A potential user is reviewing properties at the 14-acre site.

Village Administrator Todd Schmidt said parts of the proposal would be tricky, including refinancing the TID, the developer incentive for the end user, and the front-end engineering.

“I don’t want those elements that the board might find tricky to be something that might dissuade you from even taking a step towards exploration of the potential. Those are elements and aspects of the exploration that would occur as we work to engage the developer, potential end-users over the course of the process,” Schmidt said.

Asked for their thoughts, trustees had mixed reactions. Nila Frye asked why the TIF overlay was needed.

“A lot of businesses have developed in the current industrial park without funding,” Frye said, who noted the area is not blighted.

Trustee Sam Kaufmann said he shared some of the same thoughts.

Trustee Phil Willems noted that the project would extend Hogan Road, which currently comes to a dead end.

The village has already applied for an urban service area extension to provide water and sewer services at Hogan Road and is in discussions with the Statz family about the site, Schmidt said. The extension of Hogan Road itself has also been explored.

President Chris Zellner asked about the new users coming to the park and how many lots are now available in the park.

Bukovich noted that 11.5 acres are left of lot 9.

Zellner asked about the incentive for the village to put TIF dollars toward it.

The village would use TID to invest in the improvements, basically “selling the property for nothing,” Bukovich said. The profit for the village would be the added tax value after the proposed 20-year TID closed. The proposal would generate approximately $10 million in value.

The cost to for financial consultants at Ehlers and Associates to explore the TID overlay is $15,500. MLG has agreed to reimburse that cost should the board decline to pursue the TID overlay. Zellner said the village board would risk nothing by exploring the TID potential.

“I think what we’re in the position for the board to consider is what occurs in the realm of public debate,” Schmidt said. “TIF has been a tricky question for the village. And every time you open up a can and start to talk about the concepts for a potential project, you enter into a vigorous public debate.”

Zellner said the village has partnered with MLG on the business park for approximately 20 years, and development has begun to pick up.

“I’m in favor of looking down the road. They’ve been a good partner to us. We’ve worked well together,” Zellner said.

Should the village board decide to pursue the proposal, the Community Development Authority would be the body to begin the process of the district’s creation. Schmidt said plan commissioners had often asked why that body considers TIF proposals when its expertise lies in land use planning.

“The CDA specializes in financial development structures and programs for fostering community development success,” Schmidt said in a memo to the board.

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