City’s second tax incremental district in 2018
By Bert Lehman
Clintonville is in the process of creating a new tax incremental district that would include 80 acres of the city’s industrial park.
This would be the second TID to be created in the city this year. TID 8 was created earlier in the year.
The plan to create TID 9 was presented during a public hearing held during the city’s plan commission meeting on Aug. 28.
“Since the creation of that district [TID 8], the city has been approached about some industrial development within your industrial park, the existing park, the northern part,” said Maureen Holsen, municipal advisor for Ehlers, which works with the city on economic development and long-range financial planning and debt issuance.
A joint review board meeting was held earlier in the day, which was the first step in the process to create TID 9, Holsen said.
The final meeting for the joint review board regarding the creation of TID 9 is scheduled for the first week of October. Final consideration for TID 9 will be at that meeting.
The Clintonville City Council will consider the creation of TID 9 at its Sept. 11 meeting.
TID 9 would consist of 80 acres, which would be comprised of nine parcels. Some existing structures are located in the proposed TID 9 area.
The 80 acres is along Autumn Street between Industrial Avenue and Enterprise Avenue. The majority of the nine parcels are owned by the city, so they are tax exempt. The current value of all nine parcels is estimated to be around $4.5 million.
“It’s anticipated that with this area there could be potential for about $6 million in additional value,” Holsen said. “That would all be related to new development or expansion.”
Holsen added that the new development could create 50 to 60 new jobs within the first five years.
If created, TID 9 would be structured to be open for 20 years.
In order for this to happen, the city anticipates approximately $1.3 million would need to be invested in the area for projects to make the site more attractive to potential development. This would include projects within the proposed TID 9 boundaries as well as within a half-mile radius of the boundaries.
Holsen said the $1.3 million investment would be accomplished in four different phases.
Parcels that contain structures owned by Specialized Products and Clintonville Elevator are located within the proposed TID 9 boundaries.
“The rest of the area within the boundaries is open area, either zoned industrial or rural transition right now,” Holsen said. “The development assumptions are not only based off of maybe some projects that are being discussed right now related to expansions of the existing facilities but also what is possible in some of that open area.”
All project costs associated with TID 9 are estimates and must be approved by the city council, Holsen said. Potential projects include road improvement within the TID boundaries as well as within a half-mile radius outside the boundaries. This would include culvert work, road work, as well as electric utility installation in the northern area of the industrial park. Development incentives are also anticipated.
“The city’s intention is to pay for these project costs with the timing of development to ensure there will be an adequate revenue stream available to pay for these costs,” Holsen said. “It’s anticipated that these costs will be paid for with a combination of revenue available in the district as well as borrowing for some of these larger costs.”
The potential added value of $6 million is divided into five potential projects.
Holsen said the city is in discussions with Specialized Products, and once TID 9 is created, there could be construction there this fall.
She added that within the first three years of TID 9, it is anticipated that about $2.5 million of additional value could be added. Then in the eighth year of TID 9, it is anticipated that there could be a project of about $3.5 million of additional value added.
Holsen said in the early years of TID 9, an advance from the city’s general fund would be needed to pay for some administrative costs, as well as some of the proposed street projects.
Once TID 9 is producing a revenue stream for the city, the general fund advance would be paid back at a 2 percent interest rate.
Clintonville City Administrator Sharon Eveleand told the plan commission that including the northern portion of the city’s industrial park in the TID 9 boundary is the only way the city could afford to add electricity to that area.
“It’s about $275,000 that it would cost us to do that, and the city does not have the money to do that,” Eveland said. “And the electric utility can’t do that without development agreements in place.”
When asked about the 50 to 60 potential jobs to be created during the life of TID 9, Eveland clarified that the figure also includes current jobs being retained.
“There was some initial talk about places going somewhere else, businesses that I would not want to see go somewhere else,” Eveland said.
After the public hearing, the plan commission approved the creation of TID 9.