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Downtown & Infill Tax Increment 
Districts: Strategies for Success 
WEDC Presentation 
July 16, 2014 
Presented By: Ben Zellers, AICP, CNU-A
Downtown & Infill TID Strategies 
1. Downtown & redevelopment TIDs typically 
require longer timeframes and greater 
resources than other types of TIDs. 
• Most downtown TIDs should be created as “Blight 
Elimination” TIDs (27-year lifespan) and not 
“Mixed-Use” TIDs (20-year lifespan). 
• “Blight” controversy. 
• If possible, maximize your TID’s life by delaying the 
formation of the district until you have an 
increment-generating project ready to develop. 
• Planning expenses can be incurred prior to the 
formation of the TID.
Case Study: Brodhead, WI 
Downtown 
Brodhead 
Redevelopment 
Project
Case Study: Brodhead, WI 
• Building 
Improvement 
Program 
• $5,000 with 
simple 
application. 
• Application 
vs. dev. 
agreement. 
$
Strategies for Downtown & Infill TIDs 
2. Stay up-to-date on the status of your 
community’s TIDs and be ready to 
adapt to changing circumstances. 
• Successful TIDs can be amended to share 
revenue with blight elimination TIDs; 
boundaries can be amended up to four 
times. 
• Annual reports are required by WI DOR – 
review reports to see how expenditures 
compare with increment generated and 
debt service payments.
Case Study: City of Monona 
• Amended 
successful TID #2 to 
provide funds to 
struggling TID #4. 
City of Monona: TID #2 and TID #4 
Year 
TID #2 
Projected 
Annual 
Surplus 
TID #4 
Projected 
Annual 
Deficit 
2011 $1,193,505 $(256,771) 
2012 $1,213,247 $(269,728) 
2013 $330,397 $(320,755) 
2014 $429,733 $(306,464) 
2015 $441,183 $(311,808) 
2016 $789,134 $(315,629) 
2017 $1,385,136 $(323,416) 
2018 $1,556,406 $(1,280,619) 
2019 $(1,164,586) 
2020 $(228,539) 
2021 $(280,455) 
2022 $(253,845) 
2023 $(208,855) 
2024 $(216,802) 
2025 $(191,443) 
2026 $(215,020) 
2027 $(125,439) 
Total $7,422,537 $(4,690,512)
Case Study: City of Middleton 
Subtraction #2 
Downtown 
Middleton 
Subtraction #1
Strategies for Downtown & Infill TIDs 
3. Understand risks associated with the 
timing of the TID’s expenditures. 
• Too much up-front investment with no solid 
development prospects can quickly turn into 
cash flow problems. 
• Try to match planned public improvements with 
private development projects to make sure 
there is sufficient increment to pay back the 
investment. 
• Municipal investments vs. developer-financed. 
• Don’t count on changes to state law to bail out 
underperforming TIDs.
Strategies for Downtown & Infill TIDs 
4. Leverage the TID budget by applying 
for brownfield, stewardship, and other 
types of grants that support 
redevelopment. 
• TIF money can be used as matching 
funds for other funding sources.
Case Study: City of Stoughton 
• Elven Sted project: $200,000 BEBR grant; 
TID #5 used for matching funds. 
• $568,000 TIF of assistance to project.
Case Study: City of Stoughton 
• Old gas station site clearance: $30,000 
DNR grant; TID #4 matching funds.
Strategies for Downtown & Infill TIDs 
5. Smaller projects can add up. 
• Don’t just go after/fund “home run” projects. 
• Consider budgeting for a façade improvement 
program and/or housing improvement program 
when creating or amending a TID. 
• While payback from smaller projects may not 
be as immediately noticeable as larger 
projects, the cumulative long-term effect will 
have a positive impact on the community and 
the TID.
Case Study: City of Stoughton 
• Downtown façade improvement 
program. 
– CDBG funds used for façade 
improvements ($5,000 maximum grant 
with required match). 
– TIF funds used for local match for USH 
51/Main Street reconstruction through 
Downtown.
Case Study: City of Stoughton 
• 2002-2004: 
– 16 projects. 
– $55,500 of grants approved. 
– $171,600 used for matching funds. 
• Property values increased by 50% in 
the Downtown from 2001-2005.
Case Study – City of Madison 
• City of Madison “Small Cap TIF” loan 
program. 
• City provides a forgivable second 
mortgage loan at 0% interest to 
finance acquisition/rehabilitation of 
property (up to a maximum of $60,000 
or 15% of purchase price). 
• Borrower and property eligibility 
requirements.
Strategies for Downtown & Infill TIDs 
6. CDAs and RDAs can be powerful 
partners in pursuing downtown 
revitalization and redevelopment 
projects. 
• Consider pairing TID creation with creation of a 
redevelopment district, which can give a CDA 
or RDA more authority to carry out the goals of 
the plan. 
• CDAs and RDAs can remove some of the 
politics of redevelopment; developers can 
prefer working with a CDA/RDA over a Plan 
Commission/Council.
Strategies for Downtown & Infill TIDs 
• Staff with citizens with development 
field related experience (realtors, 
developers, engineers, planners, etc) 
• Can dig into the details of 
redevelopment & spend the time on 
things like development agreements. 
• Another committee?!?!
Strategies for Downtown & Infill TIDs 
7. The closing of a TID can create an 
opportunity to fund affordable 
housing in the community. 
• A Village Board/City Council can adopt a 
resolution specifying that up to a year’s worth of 
increment will be applied to improving housing 
stock and increasing the supply of affordable 
housing anywhere in the community. 
• Consider a housing stock improvement 
program. 
• Can use to capitalize an RLF.
Case Study: City of Monona 
• “Renew Monona” program. 
• Offers 0% interest loans, with principal 
payments due upon the sale of the home 
or after 10 years (whichever is first). 
• Home value restrictions: ≤$120% of 
median single family assessed value in 
City. 
• Maximum loan amount: $10,000. 
• Minimum 50% match.
Case Study: City of Monona 
• Can use loan for electrical, plumbing, 
mechanicals, window replacement, 
insulation improvements, additions. 
• Initial funding with money from final 
year of increment from TID #3; 3 
application rounds: 
– $120,000 available. 
– $269,965 requested for . . . 
– $684,699 of home improvement projects.
Questions? 
Ben Zellers, AICP, CNU-A 
999 Fourier Drive, #201 
Madison, WI 53717 
(608) 821-3967 
bzel@vierbicher.com

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Downtown & Infill Tax Increment Districts: Strategies for Success

  • 1. Downtown & Infill Tax Increment Districts: Strategies for Success WEDC Presentation July 16, 2014 Presented By: Ben Zellers, AICP, CNU-A
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  • 5. Downtown & Infill TID Strategies 1. Downtown & redevelopment TIDs typically require longer timeframes and greater resources than other types of TIDs. • Most downtown TIDs should be created as “Blight Elimination” TIDs (27-year lifespan) and not “Mixed-Use” TIDs (20-year lifespan). • “Blight” controversy. • If possible, maximize your TID’s life by delaying the formation of the district until you have an increment-generating project ready to develop. • Planning expenses can be incurred prior to the formation of the TID.
  • 6. Case Study: Brodhead, WI Downtown Brodhead Redevelopment Project
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  • 10. Case Study: Brodhead, WI • Building Improvement Program • $5,000 with simple application. • Application vs. dev. agreement. $
  • 11. Strategies for Downtown & Infill TIDs 2. Stay up-to-date on the status of your community’s TIDs and be ready to adapt to changing circumstances. • Successful TIDs can be amended to share revenue with blight elimination TIDs; boundaries can be amended up to four times. • Annual reports are required by WI DOR – review reports to see how expenditures compare with increment generated and debt service payments.
  • 12. Case Study: City of Monona • Amended successful TID #2 to provide funds to struggling TID #4. City of Monona: TID #2 and TID #4 Year TID #2 Projected Annual Surplus TID #4 Projected Annual Deficit 2011 $1,193,505 $(256,771) 2012 $1,213,247 $(269,728) 2013 $330,397 $(320,755) 2014 $429,733 $(306,464) 2015 $441,183 $(311,808) 2016 $789,134 $(315,629) 2017 $1,385,136 $(323,416) 2018 $1,556,406 $(1,280,619) 2019 $(1,164,586) 2020 $(228,539) 2021 $(280,455) 2022 $(253,845) 2023 $(208,855) 2024 $(216,802) 2025 $(191,443) 2026 $(215,020) 2027 $(125,439) Total $7,422,537 $(4,690,512)
  • 13. Case Study: City of Middleton Subtraction #2 Downtown Middleton Subtraction #1
  • 14. Strategies for Downtown & Infill TIDs 3. Understand risks associated with the timing of the TID’s expenditures. • Too much up-front investment with no solid development prospects can quickly turn into cash flow problems. • Try to match planned public improvements with private development projects to make sure there is sufficient increment to pay back the investment. • Municipal investments vs. developer-financed. • Don’t count on changes to state law to bail out underperforming TIDs.
  • 15. Strategies for Downtown & Infill TIDs 4. Leverage the TID budget by applying for brownfield, stewardship, and other types of grants that support redevelopment. • TIF money can be used as matching funds for other funding sources.
  • 16. Case Study: City of Stoughton • Elven Sted project: $200,000 BEBR grant; TID #5 used for matching funds. • $568,000 TIF of assistance to project.
  • 17. Case Study: City of Stoughton • Old gas station site clearance: $30,000 DNR grant; TID #4 matching funds.
  • 18. Strategies for Downtown & Infill TIDs 5. Smaller projects can add up. • Don’t just go after/fund “home run” projects. • Consider budgeting for a façade improvement program and/or housing improvement program when creating or amending a TID. • While payback from smaller projects may not be as immediately noticeable as larger projects, the cumulative long-term effect will have a positive impact on the community and the TID.
  • 19. Case Study: City of Stoughton • Downtown façade improvement program. – CDBG funds used for façade improvements ($5,000 maximum grant with required match). – TIF funds used for local match for USH 51/Main Street reconstruction through Downtown.
  • 20. Case Study: City of Stoughton • 2002-2004: – 16 projects. – $55,500 of grants approved. – $171,600 used for matching funds. • Property values increased by 50% in the Downtown from 2001-2005.
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  • 25. Case Study – City of Madison • City of Madison “Small Cap TIF” loan program. • City provides a forgivable second mortgage loan at 0% interest to finance acquisition/rehabilitation of property (up to a maximum of $60,000 or 15% of purchase price). • Borrower and property eligibility requirements.
  • 26. Strategies for Downtown & Infill TIDs 6. CDAs and RDAs can be powerful partners in pursuing downtown revitalization and redevelopment projects. • Consider pairing TID creation with creation of a redevelopment district, which can give a CDA or RDA more authority to carry out the goals of the plan. • CDAs and RDAs can remove some of the politics of redevelopment; developers can prefer working with a CDA/RDA over a Plan Commission/Council.
  • 27. Strategies for Downtown & Infill TIDs • Staff with citizens with development field related experience (realtors, developers, engineers, planners, etc) • Can dig into the details of redevelopment & spend the time on things like development agreements. • Another committee?!?!
  • 28. Strategies for Downtown & Infill TIDs 7. The closing of a TID can create an opportunity to fund affordable housing in the community. • A Village Board/City Council can adopt a resolution specifying that up to a year’s worth of increment will be applied to improving housing stock and increasing the supply of affordable housing anywhere in the community. • Consider a housing stock improvement program. • Can use to capitalize an RLF.
  • 29. Case Study: City of Monona • “Renew Monona” program. • Offers 0% interest loans, with principal payments due upon the sale of the home or after 10 years (whichever is first). • Home value restrictions: ≤$120% of median single family assessed value in City. • Maximum loan amount: $10,000. • Minimum 50% match.
  • 30. Case Study: City of Monona • Can use loan for electrical, plumbing, mechanicals, window replacement, insulation improvements, additions. • Initial funding with money from final year of increment from TID #3; 3 application rounds: – $120,000 available. – $269,965 requested for . . . – $684,699 of home improvement projects.
  • 31. Questions? Ben Zellers, AICP, CNU-A 999 Fourier Drive, #201 Madison, WI 53717 (608) 821-3967 bzel@vierbicher.com