On Wednesday, November 5, local business owners, developers, and interested citizens joined members of Hurley City Council and MSA-Professionals’ Art Bahr to learn about Hurley’s new Tax Increment District #45. Art Bahr, Senior Community Development Administrator for MSA, provided a presentation explaining what Tax Increment Finance is, how it works, and answered questions about Hurley’s Project Plan.
Tax Increment Finance, or TIF, is an economic development tool that freezes the tax rate in a special district and uses project property value increases to incentivize development that wouldn’t otherwise happen. Although the tax rate is frozen for the tax-collecting bodies—City of Hurley, Iron County, Hurley School District, Lake Michelle Lakes District, and Northwood Technical College—property owners will still pay the full assessed tax rate. The real-world area the tool will be applied to, identified by tax parcel IDs on the map below, is referred to as the Tax Increment District, or TID.
One of the first questions asked was how TIF will affect property taxes in the new district. “Will my taxes go up?” was the specific concern, and the answer is not as simple as yes or no. The immediate answer is no—property owners will pay the same amount of assessed property taxes they would normally pay. However, because TIF is intended to increase development, and thus assessed property values, property owners shouldn’t be surprised if their property values see a sudden jump from one year to the next.
Other questions focused on parcel ID selection, why specific parcels were chosen, and how the half-mile boundary clause applies to TID #4. Parcels were chosen based on multi-use development and although no specific businesses or entities are named in the Project Plan, TID #4 came about to entice Cobblestone Inn and (later) Dollar General to set up shop in town. Some properties, such as the Hurley cemetery which is a non-taxed municipal property, were included in TID #4 because the TID map must include contiguous parcels. Therefore, the cemetery was included to ensure access to Lake Lavina.
Regarding the half-mile clause (“projects may be undertaken within TID #4 or within ½ mile of the TID #4 boundary, per 2007 Wisconsin Act 57 § 2” per the Project Plan), business owners and developers were interested in what type of incentives that may be accessible in the future. Parcels in the TID #4 boundary at the time of TID #4 approval by Wisconsin Department of Revenue are eligible for tax-based incentives while any property in the incorporated limits of the City of Hurley within half a mile of the TID #4 boundary are eligible for project-related incentives. This means parcels like the anticipated Dollar General and Cobblestone sites will have access to tax credits funded by the increment, or the difference between the newly assessed value and the frozen tax rate. “Project costs” are anything that occurs in downtown Hurley related to TID #4 development, such as additional sewer lines identified after infrastructure development begins. City officials also stated a willingness to create a business improvement fund for local businesses within the half-mile boundary.
You can access the presentation, Project Plan, and Wisconsin Department of Revenue’s Tax Increment Finance Manual HERE.
For further information, contact Hurley City Hall or Art Bahr at 920-545-2086.
Questions?
If you would like to learn more about Community Development resources in Iron County, please contact:
Joseph Miller
Community Development Educator
Extension Iron County
300 Taconite Street, Suite 118
Hurley, WI 54534
Phone: 715-561-2695
