This document outlines seven strategies for successful downtown and infill tax increment financing (TIF) districts. It discusses the need for longer timeframes and greater resources for these types of TIDs. It emphasizes staying up-to-date on TID status and being prepared to adapt. It also stresses the importance of matching public improvements to private development timelines and leveraging other funding sources. The document provides case studies of specific cities that have effectively implemented these strategies.

1. Downtown & Infill Tax Increment
Districts: Strategies for Success
WEDC Presentation
July 16, 2014
Presented By: Ben Zellers, AICP, CNU-A

5. Downtown & Infill TID Strategies
1. Downtown & redevelopment TIDs typically
require longer timeframes and greater
resources than other types of TIDs.
• Most downtown TIDs should be created as “Blight
Elimination” TIDs (27-year lifespan) and not
“Mixed-Use” TIDs (20-year lifespan).
• “Blight” controversy.
• If possible, maximize your TID’s life by delaying the
formation of the district until you have an
increment-generating project ready to develop.
• Planning expenses can be incurred prior to the
formation of the TID.

6. Case Study: Brodhead, WI
Downtown
Brodhead
Redevelopment
Project

10. Case Study: Brodhead, WI
• Building
Improvement
Program
• $5,000 with
simple
application.
• Application
vs. dev.
agreement.
$

11. Strategies for Downtown & Infill TIDs
2. Stay up-to-date on the status of your
community’s TIDs and be ready to
adapt to changing circumstances.
• Successful TIDs can be amended to share
revenue with blight elimination TIDs;
boundaries can be amended up to four
times.
• Annual reports are required by WI DOR –
review reports to see how expenditures
compare with increment generated and
debt service payments.

12. Case Study: City of Monona
• Amended
successful TID #2 to
provide funds to
struggling TID #4.
City of Monona: TID #2 and TID #4
Year
TID #2
Projected
Annual
Surplus
TID #4
Projected
Annual
Deficit
2011 $1,193,505 $(256,771)
2012 $1,213,247 $(269,728)
2013 $330,397 $(320,755)
2014 $429,733 $(306,464)
2015 $441,183 $(311,808)
2016 $789,134 $(315,629)
2017 $1,385,136 $(323,416)
2018 $1,556,406 $(1,280,619)
2019 $(1,164,586)
2020 $(228,539)
2021 $(280,455)
2022 $(253,845)
2023 $(208,855)
2024 $(216,802)
2025 $(191,443)
2026 $(215,020)
2027 $(125,439)
Total $7,422,537 $(4,690,512)

13. Case Study: City of Middleton
Subtraction #2
Downtown
Middleton
Subtraction #1

14. Strategies for Downtown & Infill TIDs
3. Understand risks associated with the
timing of the TID’s expenditures.
• Too much up-front investment with no solid
development prospects can quickly turn into
cash flow problems.
• Try to match planned public improvements with
private development projects to make sure
there is sufficient increment to pay back the
investment.
• Municipal investments vs. developer-financed.
• Don’t count on changes to state law to bail out
underperforming TIDs.

15. Strategies for Downtown & Infill TIDs
4. Leverage the TID budget by applying
for brownfield, stewardship, and other
types of grants that support
redevelopment.
• TIF money can be used as matching
funds for other funding sources.

16. Case Study: City of Stoughton
• Elven Sted project: $200,000 BEBR grant;
TID #5 used for matching funds.
• $568,000 TIF of assistance to project.

17. Case Study: City of Stoughton
• Old gas station site clearance: $30,000
DNR grant; TID #4 matching funds.

18. Strategies for Downtown & Infill TIDs
5. Smaller projects can add up.
• Don’t just go after/fund “home run” projects.
• Consider budgeting for a façade improvement
program and/or housing improvement program
when creating or amending a TID.
• While payback from smaller projects may not
be as immediately noticeable as larger
projects, the cumulative long-term effect will
have a positive impact on the community and
the TID.

19. Case Study: City of Stoughton
• Downtown façade improvement
program.
– CDBG funds used for façade
improvements ($5,000 maximum grant
with required match).
– TIF funds used for local match for USH
51/Main Street reconstruction through
Downtown.

20. Case Study: City of Stoughton
• 2002-2004:
– 16 projects.
– $55,500 of grants approved.
– $171,600 used for matching funds.
• Property values increased by 50% in
the Downtown from 2001-2005.

25. Case Study – City of Madison
• City of Madison “Small Cap TIF” loan
program.
• City provides a forgivable second
mortgage loan at 0% interest to
finance acquisition/rehabilitation of
property (up to a maximum of $60,000
or 15% of purchase price).
• Borrower and property eligibility
requirements.

26. Strategies for Downtown & Infill TIDs
6. CDAs and RDAs can be powerful
partners in pursuing downtown
revitalization and redevelopment
projects.
• Consider pairing TID creation with creation of a
redevelopment district, which can give a CDA
or RDA more authority to carry out the goals of
the plan.
• CDAs and RDAs can remove some of the
politics of redevelopment; developers can
prefer working with a CDA/RDA over a Plan
Commission/Council.

27. Strategies for Downtown & Infill TIDs
• Staff with citizens with development
field related experience (realtors,
developers, engineers, planners, etc)
• Can dig into the details of
redevelopment & spend the time on
things like development agreements.
• Another committee?!?!

28. Strategies for Downtown & Infill TIDs
7. The closing of a TID can create an
opportunity to fund affordable
housing in the community.
• A Village Board/City Council can adopt a
resolution specifying that up to a year’s worth of
increment will be applied to improving housing
stock and increasing the supply of affordable
housing anywhere in the community.
• Consider a housing stock improvement
program.
• Can use to capitalize an RLF.

29. Case Study: City of Monona
• “Renew Monona” program.
• Offers 0% interest loans, with principal
payments due upon the sale of the home
or after 10 years (whichever is first).
• Home value restrictions: ≤$120% of
median single family assessed value in
City.
• Maximum loan amount: $10,000.
• Minimum 50% match.

30. Case Study: City of Monona
• Can use loan for electrical, plumbing,
mechanicals, window replacement,
insulation improvements, additions.
• Initial funding with money from final
year of increment from TID #3; 3
application rounds:
– $120,000 available.
– $269,965 requested for . . .
– $684,699 of home improvement projects.

31. Questions?
Ben Zellers, AICP, CNU-A
999 Fourier Drive, #201
Madison, WI 53717
(608) 821-3967
bzel@vierbicher.com