CCR2007019.
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COMMON COUNCIL - CITY OF MUSKEGO
RESOLUTION #019-2007
APPROVAL OF TAX INCREMENT FINANCE GUIDELINES
WHEREAS, The Community Development Authority has worked extensively with Tax
Increment Finance (TIF) Districts in the past years and have worked to complete a set
of Tax Increment Finance Guidelines to properly guide a developer in submitting for
future TIF assistance from the City of Muskego, and
WHEREAS, The Community Development Authority reviewed and recommended
approval of the Tax Increment Finance Guidelines on October 17,2006, and
WHEREAS, The Planning Commission reviewed and recommended approval of the
Tax Increment Finance Guidelines on December 5,2006, and
WHEREAS, The Tax Increment Finance Guidelines are strictly guidelines offered to aid
a developer in preparing TIF financing in a way thought to be best practices by the
Council, however, each future proposal for TIF dollars is dependent on the project
submitted.
NOW, THEREFORE, BE IT RESOLVED That the Common Council of the City of
Muskego, upon the recommendation of the Community Development Authority and the
Planning Commission, does hereby approve Tax increment Finance Guidelines for the
City of Muskego as attached.
BE IT FURTHER RESOLVED That unsubstantial changes to the guidelines are
authorized by the Planning Commission as required.
DATED THIS 23rd DAY OF January ,2007.
SPONSORED BY:
Ald. Chris Buckmaster
Ald. Nancy Salentine
This is to certify that this is a true and accurate copy of Resolution #019-2007 which
was adopted by the Common Council of the City of MUS~~O.
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Reso. #019-2007 Page 2
TAX INCREMENT FINANCE DISTRICT (TID) CUIDELINES
CITY OF MUSKECO
WAUKESHA COUNTY, WI
Facilitated by the Community Development Authority on October 17,2006
Recommended by the Planning Commission on December 5, 2006
Approved by the Common Council on January 23, 2007
Reso. #019-2007 Page 3
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Tax Increment Financing Guidelines
City of Muskego
I. GENERAL GUIDELINES
The purpose of these guidelines is to establish the City's position relating to the use of Tax
Increment Financing for private development. These guidelines shall be used as a guide in
processing and reviewing applications requesting Tax Increment assistance. The fundamental
purpose of tax increment financing in Muskego is to encourage desirable development and/or
redevelopment that would not otherwise occur "but for" the assistance provided through TID.
The City of Muskego shall consider Tax Increment Financing for projects that serve to
accomplish the City's goals for economic development as they may change over time. The goals
include facilitating projects that would result in the creation of quality jobs (e.g. stable
employment and/or attractive wages and benefits), quality structures, and the attraction, retention,
and expansion of business in the City.
In accordance with the TlO guidelines, TID requests must comply with applicable state statutes.
The City of Muskego is governed by the limitations established in Wisconsin Statutes Section
66.1105, the Wisconsin Tax Increment Financing Act.
II. CITY'S OBJECTIVE FOR THE USE OF TID:
. Using this document and the statute as guides, the City of Muskego will consider using Tax
Increment Financing (TID) to assist private development projects to achieve one or more of the
following purposes (Not listed in any priority):
· Remove blight and/or encourage redevelopment in the commercial and industtial areas of the
City in order to encourage high quality development or redevelopment and private
reinvestment in those areas consistent with the stated guidelines already adopted by the
community.
· To retain local jobs and/or increase the number and diversity of quality jobs (e.g. stable
employment and/or attractive wages and benefits).
· To encourage additional unsubsidized private development in the area, either directly, or
through secondary "spin-off" development.
· To offset increased costs of redevelopment (e.g. contaminated site clean-up), over and above
those costs that a developer would incur in nonnal urban and suburban development.
. To facilitate the development process and to achieve development on sites which would not
be developed to the full potential of the community vision without this assistance.
. . To meet other uses of public policy, as adopted by the Council from time to time, including
promotion of quality urban design, quality architectural design, energy conservation,
decreasing the capital and operating costs of local government, etc.
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Reso. #019-2007 Page 4
· To encourage the application of Livable Communities Principles to a development project so
as to create compact, efficient mixed-use development, quality amenities, and attractive,
pedestrian and transit fi'iendly development while preserving desirable environmental
features.
III. COSTS WHICH MAY QUALIFY FOR TAX INCREMENT FINANCING
ASSISTANCE
Any costs allowable by WI Statute Section 66.1105(2)(t) may qualify for Tax Incremental
Financing in the City of Muskego. Actual allowed costs are under the strict evaluation of the
Common Council.
IV. PROJECTS WHICH MAY QUALIFY FOR TAX INCREMENT FINANCING
ASSISTANCE
Qualified projects should meet or exceed the following basic and desired qualifications to be
eligible for TlD assistance. Meeting the threshold of eligibility does not guarantee approval of
the proiect by the City. Conversely, fàilure to meet the criteria will not automatically exclude a
proposal from further consideration. Each proposal will be looked at on its own merit and how it
meets the following basic and desired qualifications. Meeting the qualifications creates no
contractual rights on the part of any potential developer to have its project approved. Final
approval of any project will be made by the City Council at its discretion.
. BASIC QUALIFICATIONS
A. The project should meet one or more of the Tax Increment Financing Objectives outlined in
Section 2, but at a minimum shall:
· Remove blight and/or encourage development and redevelopment in the housing,
commercial, and industlial areas of the City in order to encourage high quality
development or redevelopment and private reinvestment in those areas.
· Demonstrate that the project is not financially feasible "but-for" the use of tax increment
financing.
A. The project must be consistent with the City's Comprehensive Plan and Zoning Ordinances,
or required changes to the plan and ordinances must be under active consideration by the City
at the time of final TID application submittal.
B. Prior to approval of a TID financing plan, the developer shall provide any requested market
and financial feasibility studies, appraisals, soil boring, private lender commitment, and/or
other information the City or its financial consultants may require in order to proceed with an
independent review of the proposal.
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C. The developer must provide adequate financial guarantees to ensure the repayment ofthe TID
loan and completion of the project. These may include, but are not limited to: letters of
credit, bonds, willingness to sign Developer's Agreement that authorizes payback of TID
funds only when an agreed upon amount of increment is generated by the development, etc.
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Reso. #019-2007 Page 5
O. Any developer requesting TID assistance should be able to demonstrate past successful
general development capability as well as specific capability in the type and size of
development proposed. TIO will not be used when the developer's credentials, in the sole
Judgment of the City, are inadequate due to past track record relating to: completion of
projects, general reputation and/or bankruptcy, or other problems or issues considered
relevant by the City.
DESIRED QUALIFICATIONS
A. Preference will be given to projects that meet good public policy criteria as determined by
the City Council, including:
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· High project quality (e.g. sound architectural design, quality construction and
material s)
· Projects that are in compliance with the Comprehensive Plan, Zoning Ordinance,
Economic Development Strategic Plan, Design Guides, and other redevelopment
plans of the City
· Projects that provide significant improvement to sun'ounding land uses, the
neighborhood, and/or the City
· Projects that provide a significant increase in tax base
· Projects that provide significant new, or retained, employment
· Projects that meet financial feasibility criteria established by the City including but
not limited to: 1. Keeping a proposed TID District to 15 years or less and, 2. Keeping
the ratio of Developer dollars to TlD dollars to around a 8: I ratio (Ratio may be
allowed to be lower and years may be more if proposed TID meets other requirements
and fills an important need in the community); and
· Projects that provide the highest and best desired use of the property
A. TIO proposals creating a higher ratio of property taxes paid before and after
redevelopment will receive priority consideration. Given the different assessment
circumstances in the City, this ratio will vary widely. A 1:2 ratio or higher of taxes paid
before and after redevelopment is desired.
B. TID proposals should not be used to support speculative industrial, commercial or office
projects. The developer must be able to provide market data, tenant letters of
commitment and/or finance statements, which support the market potential/demand for
the proposed project.
C. TID will normally not be used in a project that involves an excessive land and/or property
price. This will normally be where the acquisition price is more than 15% in excess of
market value as determined by an independent appraisal of the property.
O. TID will not be used in projects that would give a significant competitive financial
advantage over similar projects in the area due to the use of tax increment subsidies.
Developers should provide infOlmation to support that TID assistance will not create such
a competitive advantage. Priority consideration will be given to projects that till an
unmet market need.
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Reso. #019-200"7 Page 6
E. TID will be provided on a pay-as-you-go-hasis with TID funds nonnally only be paid to
the developer by the City once an agreed upon amount of tax increment resulting from the
proposed project is generated and paid. Any request for upfront assistance will be
evaluated on its own merit in accordance with the City's general financing policies.
Projects requesting pay-as-you-go financing will receive priority consideration.
F. TID will not be used to support projects that place extraordinary demands on City
services. Preference will be given to projects that do not place extraordinary demands on
City services.
G. TID will not normally be used for projects that would generate significant environmental
problems in the opinion of the local, state, or federal governments. Priority will be given
to projects that aim to clean-up existing contaminated sites and would facilitate the
location of an industry or business, which has an environmentally sound track record.
V. TAX INCREMENT PROJECT EVALUATION PROCESS
The fo1l0wing four methods of analysis for all TID proposals will be used:
I. Consideration of project meeting basic qualifications.
2. Consideration of project meeting desired qualifications.
3. Project meets "but-for" analysis and statutory qualifications.
4. Project is deemed consistent with City Adopted Plans
. Please note evaluation methodology is intended to provide a balanced review. Each area will
be evaluated individually and collectively and in no case shall one area outweigh another in
terms of importance to determining the level of TID assistance.
VI. OTHER GUIDELINE ISSUES
Loss of Government Aid
At any time, if the fOllnation of a new TID district or the use of an existing district to finance a
project will subject the City to an Local Government Aid (LGA) / Certified Homestead
Agricultural Credit Aid (HACA) penalty or local contribution to a project, the transaction shall
be structured so as to have the ultimate cost to the City minimized to the greatest extent
permitted by law, so as to have the project bear the cost of the penalty or contribution.
Public Use of Tax Increment
The City shall follow applicable state laws in terms of potential public improvement financing
with TID. It shall be the general guideline of the City to identify public improvements at the time
of adoption or amendment of the TID Plan.
. VI. APPLICATION PROCESS
The application process is a two-step process and must be completed in accordance with the TID
application procedures (Separate procedure adopted by the Common Council with fees that may
change from time to time by the discretion of the Common Council is found in Appendix A of
Reso. #019-2007 Page 7
these guidelines). The purpose of this approach is to give an applicant the opportunity to present
a development proposal without expending a great deal of money and time in pursuing a
. development that may conflict with the City's goals and objectives.
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Reso. #019-2007 Page 8
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Appendix A
T AX INCREMENTAL FINANCING DISTRICT REQUEST
PROCESS AND APPLICATION REQUIREMENTS
City of Muskego
INTRODUCTION
The City's tax increment financing program will be administered by the Muskego Common
Council with assistance from the City Planning Commission and Community Development
Authority as directed. The Muskego Common Council will require a non-refundable application
fee in the amount of $200 for its processing of the initial application. Upon Council conceptual
approval, a non-refundable application fee in the amount of $2,000 is required for processing of
the final application. The application fee shall be paid to the Common Council at the time a final
TID application is submitted. Fees and applications are accepted in the Muskego Planning
Department and are subject to change without notice.
At the time a final TID application is submitted, the applicant shall also submit a $10,000
developer's deposit to cover its attorney's and consultant's costs incurred as part of amending or
establishing a TID disttict, drafting and negotiating a development agreement, and conducting
any fiscal analysis that may be required to meet the requirements of utilizing TID. If additional
expenses are incurred beyond the $10,000, the applicant shall be notified in wtiting and the
applicant will be required to deposit additional funds upon notice.
. If the project is approved and the applicant proceeds with the project, the applicant shall be
reimbursed any unused portion of the deposit as of the date of execution of the development
agreement. Fllliher, if the TID District is fully approved, the applicant may receive further
reimbursements for any costs that are TID eligible. If the applicant does not proceed with the
project, the applicant shall be reimbursed for the unused portion of the deposit as of the date the
Common Council is notified in writing that the applicant desires to withdraw its application
(Note: All inculTed fees to that date will still be applied). Further, if the project is denied for any
reason, the applicant shall be reimbursed for the unused portion of the deposit as of the date of
the denial (Note: All incurred fees to that date will still be applied).
STEPS IN PROCESS
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);> Complete and submit a TID Application (Application requirements found below) with
supporting documents (Initial submittal may be in rough form for preliminary discussion
purposes).
);> Schedule a meeting with staff for initial review ofthe application.
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Staff will work with applicant to develop the most appropriate TID application according to City
adopted policies. Once developer and/or staff believes the initial application is ready, the request
is sent to the Common Council for their review and comments. A non-refundable submittal fee
of $200 is required to put the TID proposal on the Common Council agenda. A resolution from
the Council will approve, deny, or approve with stipulations the conceptual TID proposal. This
first step will aid the devcloper in keeping down initial costs in exploting TID availability.
Stipulations commonly found as part of conceptual approvals usually relate to the adopted TID
Reso. #019-2007 Page 9
policies and mayor may not consist of the following: Further solidification of numbers
(Appraisals. Letters of Intent, Developer Agreements, etc); Making the TID proposal payoff in
. lower amount of years; and/or a higher ratio of Developer dollars to TID dollars, etc.
NOTE: The Common Council will determine what body (Planning Commission or Community
Development Authority) will he the future recommending authority for the proposed TID at the
time of conceptual approval.
Step 2
~ Complete and submit a final TID Application with sUPPOliing documents along with
appropriate submission ($2000 non-refundable) and developer's deposit fees ($10,000).
~ Schedule a meeting with staff for initial review of the application.
);> Staff then begins the TID approval process by taking it to the recommending body and
beginning the Statutory TID process.
).- Developer must comply with requirements of all approving bodies (Planning
Commission, Community Development Authority, Common Council, Joint Review
Board) throughout the process facilitating further info when needed (Further info mayor
may not include appraisals, Developer's Agreements, Letters ofIntent, and other various
number backing).
APPLICATION REQlJlREMENTS
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General Info
List the Date, Project Name, Tax Key Numbers involved, and the TID District Number the
project is affiliated with (If within an existing TID).
Applicant Info
"Applicant" refers to the proprietor, general partner, authorized member, or manager of an LLC,
or corporate officer signing this application. List the Name, Title, Company, Address, City,
State, Zip, Email Address, Phone, and Fax for this individual. Also, list pertinent experience
infonnation.
Info about Management
List all owners, officers, directors, investors, members and/or partners. List the Name, % of
O\;\,Tnership, Title, Company, Address, City, State, Zip, Email Address, Phone, and Fax for these
individuals. Also, list peliinent experience infomlation.
illfo~;iliout Support Finns
List all attorneys, accountants, contractors, engineers, architects, or other consultants supporting
the venture. List the Name, oAt of Ownership, Title, Company, Address, City, State, Zip, Email
Address, Phone, and Fax for these individuals.
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Info about the Proiect Plan
A Project Plan must be created when a Tax Incremental District or amendment to a district is
formed. The project plan must outline the incentives that are to result from the TlD. These
incentives must in turn demonstrate that they will be paid hack once completed by an increase in
tax increment within the district itself. A developer wishing to create a new TID District, or
amend an existing one, must show the following (Further infonnation may be required):
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Reso. #019-2007 Page 10
;..- Development Vision.
'Y How the project relates to the variables found in the City's adopted TID Guidelines
'Y Detailed outline of the TID incentive requests.
o Incentive requests/costs
o Reasons why the incentives pass a "but for" test
o Project Proforma
o Anticipated project costs
o Base Values (Appraisals will be required to support base values)
o Anticipated Value Added to TID as a result of the project (Resulting fair market
values, possible future assessments, increment generations, etc.)
o Timcline for intended development (Letters of intent and/or Developer's
Agreements !lli!Y be required to suppOli timeline)
r Specific details on development proposal (Project Narrative, Site Plans, Four-Sided
Building Elevations, Landscaping Plans, Grading Plans, Infrastructure Plans, etc.).
Þ- Job creation information
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Main Contact Inf()
Jeff Mucnkel AICP
Planning Director
City of Muskego
(262) 679-4136
WI82 S8200 Racine Avenue
PO Box 749
Muskego, WI 53150-0749
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