Shorewood's biggest TIF projected to pay off in 2022
Area value has increased by $36 million
Shorewood — The village's biggest tax incremental financing district is projected to pay back taxpayers by 2022 and could end up turning a profit, according to projections presented Tuesday at the Village Board and Community Development Authority's annual meeting.
The TIF district, created in 1995, contains nearly the entire commercial corridors of Oakland Avenue and Capitol Drive and has used tax dollars to spur developments like the Metro Condo Building, Cornerstone Apartments, North Shore Bistro, Wine Thief, Ravenna Apartments, and a number of facade improvements.
Michael Harrigan of Ehlers, the village's financial adviser, said taxpayers have put up about $17.5 million over the years to help fund those projects. At the high point of 2007, that investment had created about $53 million of new property value in the district, but after the 2008 crash and following "Great Recession," the new value has fallen to about $36 million.
As Harrigan and Village President Guy Johnson pointed out, the pre-recession numbers were fueled by the real estate bubble at an annual growth rate of between 8 and 10 percent. In the current market, Harrigan is projecting no growth in 2014 and slowly increasing growth up to 2 percent annually beginning in 2018.
With those numbers, Harrigan projects that by 2022 — the year the district is set to close and the added property taxes will finally go to Shorewood, the school district, and other taxing bodies — the district will either be slightly over or under the break-even point if no new projects are funded.
Village could sell lot
However, the projections show that with several new village investments, including a potential sale and development of the village-owned parking lot next to Harry's Bar and Grill, the district could post a nearly $2 million surplus by 2022.
"It's not a guarantee, but it's a good position," Harrigan said, adding that if the village opts not to pursue more projects and comes out even or slightly in the red, "You still have an improved looking community, and an improved business district."
The CDA and Village Board each gave conceptual approval of Harrigan's projections but will need to vote on the individual projects as they are proposed.
More activity coming
Shorewood's other two districts, one of which includes the Lighthorse apartments and the other contains the recently approved Harbor Retirement Associates assisted-living, are both projected to repay the village's investments quicker than state law mandates.
Still on the horizon is a new district meant to kickstart redevelopment of the vacant Walgreens, book store, and potentially Pick 'n Save sites. Village Manager Chris Swartz has been in talks with Roundy's representatives and said Tuesday that he plans to have a proposal before the CDA and Village Board sometime in 2014.
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