$13M from downtown Milwaukee properties could help finance Century City's debt
Milwaukee officials endorsed a plan to funnel $13.3 million in real estate taxes from downtown properties to pay debt on the Century City Business Park that has struggled to attract employers.
The move represents property tax money from successful downtown developments going toward Milwaukee’s cost of building the business park at North 31st Street and West Capitol Drive. While not pre-planned, it represents a way Milwaukee could use downtown’s prosperity to support a lower-income neighborhood, said Ald. Robert Bauman.
“It really is a back-door way of reallocating value in the city,” Bauman said. “I think that’s a good thing. I think that is what everybody here has talked about for a long time.”
The city has $24.75 million of debt on Century City. That dates to 2009, when officials approved a tax incremental financing district for the business park. The city borrowed $16.7 million to clean and clear the former Tower Automotive property and build infrastructure, and has accrued interest on that debt.
The business park hasn’t generated new property taxes Milwaukee officials in 2009 had counted on to pay off the spending. Century City attracted Talgo Inc. to open a train rehab operation in an existing building, and Good City Brewing bought the only new industrial facility developed at Century City. Much of that building remains unused.
A 2018 attempt to attract an Amazon.com distribution center was unsuccessful. Franklin meatpacking company Strauss Brands last year canceled a $60 million project at Century City in the face of opposition from aldermen and anti-slaughterhouse protesters.
The result of Century City’s undeveloped land is the park doesn’t generate enough property taxes to pay off the $24.75 million of debt. The city plans to pull money from three other downtown tax incremental financing districts to fill the gap. The Common Council’s Zoning, Neighborhoods and Development Committee on Tuesday endorsed that proposal.
If approved by the Common Council on March 3, the proposal would raise $13.3 million for Century City’s debt. The three TIF districts donating money to Century City include the former Shops of Grand Avenue, Cathedral Place office building and the Milwaukee Intermodal Station.
City officials on Tuesday also approved money for downtown area infrastructure projects from those three districts. If not for the spending under review now, those three TIF districts would dissolve. Under that scenario, their tax base is added to the overall city property value, which can help control Milwaukee’s future tax rate.
Lori Lutzka, development projects manager in the Department of City Development, likened it to personal finances. When an individual receives a bonus payment, they can use the excess money to pay off a credit card. Historically, the city has used the same practice to donate $35 million to 11 other TIF districts.
“You look at your surplus income and you look to pay off maybe some bills you owe,” Lutzka said.
If nothing is built at Century City, Milwaukee officials must draw money from more TIF districts in the future to pay off the remaining $11.3 million in debt, or spend money from the general fund.