Delafield debates development tax incentives

 City of Delafield - A plan to provide real estate tax financing for public improvements in a proposed downtown residential development ran into stiff opposition tonight although it was approved by the Plan Commission on a 4 to 3 vote.

The Common Council will now decide on June 18 whether  to create a real estate tax increment financing district that would generate about $2 million  over about 15 years to help pay for about $1.5 million in public improvements, including a storm water control system, associated with the construction of two apartment buildings a few blocks east of City Hall.

However, some plan commission members and a city resident argued a local ordinance requires a referendum on the improvements because the costs exceed $1 million. Another plan commission member, Kevin Fitzgerald, an attorney, argued the boundaries of the proposed tax district do not meet state requirements.

A financial consultant for the city argued the referendum was unnecessary because the referendum threshold did not include service and interest costs which would be about $400,000 for the project.

Another $115,000 for construction of a hiking/biking trail could be either removed from the project or financed seperately which would reduce total project costs to under $1 million, according to Phil Cosson of Ehlers financial consultant.

City resident Gerry Holton later said the Common Council should be consistent. Since the council would not allow the dredging of Lake Nagawick to be divided into seperate projects in order to avoid the referendum requirement, the council should not separate the biking/hiking path from the project in order to avoid the $1 million limit

Mayor Ed McAleer argued tax revenues for the project were justified because otherwise the developer could not complete construction of the two apartment buildings and 13 single family homes. The mayor said the residential development would increase the population downtown which would help downtown business owners and increase the city's tax base.