The Legislature has approved a 10-year extension of Racine's Tax Increment District #2, encompassing much of the Downtown lakefront, thus making roughly $10 million available over the next decade for future development .
As Rep. Cory Mason put it: "This will create $10 million in resources to develop this part of the city."
That is one way to tell the story. Another might be:
After keeping all incremental tax revenue from the lakefront's development to itself for the 27 years state law allows, the City of Racine has found a way to keep it away from city schools and county government for 10 more years.
But let's focus on the positive first. Racine's mayor and three legislators held a press conference this morning -- grateful that the impending rain held off -- at the foot of Hamilton Street, by the fenced-off plot that once housed Walker Manufacturing, to announce that TID #2, due to expire at the end of this year, can continue for another 10 years.
Mayor John Dickert heaped praise on Reps. Mason and Bob Turner and State Sen. John Lehman, for gaining legislative approval of Senate Bill 132 and Assembly Bill 175, which allow the ten-year TID extension Looking over the desolate site along the lakefront, marked now by concrete foundations of Walker Manufacturing and an old suitcase trunk factory (and now featuring a huge pile of stockpiled city dirt), the mayor looked toward the future:
"As everyone knows in real estate, the country is coming back to water." He said the city is "in conversations -- early stages -- on four potential partnerships in the downtown area. There are a lot of balls in the air." Asked whether any of them specifically involved the lakefront site (that woulda, shoulda, won't be Pointe Blue, the $200 million condo development that failed before it began in 2007), he declined comment.
Mason called the TID's extension "an exciting step forward," and noted, "This is where Racine was founded, at the mouth of the river."
Lehman added, "this is one of the best development sites on the western shore of Lake Michigan."
Turner, who arrived after the press conference had begun, said the move "will go a long way to putting Racine back on track." He took some kidding, as the only person present who was in city government when the TID was created in 1982. Turner was first elected to the City Council in 1976, and to the Legislature in 1990. (He denies being present when Gilbert Knapp founded Racine in 1834.)
Without the TID's extension, said Dickert, "we wouldn't have been able to do anything." Looking past the chain link fence onto the brownfield site -- one of 59 in the city -- he said, "I can almost guarantee you it won't look like this in 10 years."
District 4 Alderman Jim Kaplan is dreaming big dreams for the area he represents. He'd like to see "a huge Marriott or Sheraton Hotel, curving along the lakefront, with a water park, a whole glass wall looking over the lake. The waves crashing, ice everywhere, and you're playing inside in a tropical setting."
Yeah, well, who wouldn't?
Interestingly enough, TID #2 (click map to enlarge) actually paid off its debt two or three years ago, according to Brian O'Connell, City Development director. The money was spent on the underlying infrastructure that supported the lakefront development; until the mid-1980s Racine's lakefront was marked by oil storage tanks and used car dealers, not by a marina and Festival Hall.
Normally, paying off the debt would trigger the end of a Tax Increment District's life, and all tax revenue would then go to all the relevant taxing districts, including RUSD and Racine County. But the city is allowed to use revenue from paid-up TIDs to support "laggard" ones, and so TID #2's million-a-year has been diverted to TID #8, the State Street district. Mayor Dickert noted a few weeks ago that 9 of the city's 14 TIDs are not generating enough revenue to pay back their debts.
So, in actuality, no "new" revenue is being generated by this legislation. Rather, an existing revenue stream will not be lost by the city, forced to share it with other taxing districts. It will continue to be available solely for city projects within TID #2. And some other revenue source will have to be found for TID #8.
O'Connell noted that the fine print in the legislation "allows" this extension of TID #2. The matter still must go before the City Council, City Planning and the Review Board. "But without this legislation, the TID would have sunset, game over. It was a time-sensitive piece."
TID #2 encompasses the area from 6th Street on the south, Lake Avenue on the west, Lake Michigan on the east and Hamilton Street (actually the north edge of the Walker property) on the north.