TIF Funding for UWM Plan Projected to Triple to $30 Million

City pushes change in the Innovation Campus TIF to allow public assistance for private parking, and shows that more than $12 million in parking support could be added to original $6.5 million in public roads and utilities — plus interest.

The public investment for infrastructure at UW-Milwaukee’s Innovation Campus could swell to $30 million, according to projections supplied by city officials to the Community Development Authority on Monday.

The CDA swiftly approved an amendment to the tax increment financing (TIF) plan that would allow the allocation of funds to parking structures and surface parking for private developments on Innovation Campus.

While only one such private project has been proposed — the 95,000-square-foot ABB Group building — projections for up to six additional private development sites on the County Grounds tract identify a total of $12,395,000 in support for parking stalls. ABB has already asked for $2 million for in-building parking.

The TIF amendment approved Monday is on a fast track. It will go to the Budget and Finance Committee on Feb. 12, where if approved it will move to the Common Council on Feb. 19, and if approved there to the Joint Review Board on Feb. 26 for final approval.

That would allow the city to act on ABB's $2 million TIF assistance request, already filed.

How it breaks down

Based on projections the city supplied to the CDA, here’s how the $30 million breaks down:

  • The aforementioned $12.4 million for parking
  • Almost $6 million in debt service on that investment
  • $6.5 million for the Discovery Parkway main access road, additional access roads to the individual development sites, and utilities to serve all of them
  • About $3.5 million on debt service for that project
  • $2 million for design and administrative charges

The parking element triples the public investment in Innovation Campus, according to the amended budget.

How it will be recouped

To pay for that, if UWM finds six more tenants, the total projected value of private developments will come to $90 million. The amended budget calls for those six additional six tenants to be on board in two years, by 2015, and for them to start paying their part toward the TIF debt by 2017, as their projects are realized.

If all seven possible developments take place on that schedule, the project would realize $34.2 million in incremental taxes over the 27-year life of the TIF district — $4 million over the investment in public and private infrastructure.

According to the terms of the TIF, the debt service on city borrowing is to be paid from the incremental taxes on tenants within the TIF boundaries, not by all taxpayers.

One complicating factor

The building of Discovery Parkway, its access roads and utilities actually costs a projected $12 million, but only $6.5 million is slated to come from the Innovation Campus TIF District.

The balance of $5.5 million is slated to come from another, overlapping TIF district that includes the Eschweiler Campus but none of the rest of Innovation Campus. That money exists in surplus from previous Research Park projects, but can only be legally unlocked if development occurs on the Eschweiler Campus.

The Mandel Group, a major Milwaukee-area developer, is the firm preferred by the UWM Real Estate Foundation to tackle the project. But there are disagreements about whether the Eschweiler buildings can be salvaged, and that development is still uncertain. In fact, Mandel wants TIF funds for that project, too.

If no development does occur in that TIF district — if the Mandel Group makes no formal proposal, or if the city does not accept whatever he might propose — then it could fall back to the Innovation Campus TIF to support the additional $5.5 million in infrastructure costs that has already been borrowed by Wauwatosa.

anita February 05, 2013 at 04:29 PM
Christine-well said!
Cassandra February 07, 2013 at 05:30 PM
Actually, Christine, the clear consensus is that the buildings are best suited for reuse as a school rather than apartments. Only the false reports and misleading information created the impression that the buildings couldn't be rehabbed as apartments. One can point to many similar successful rehab projects across the country. The problem here was a developer with no appreciable experience dealing with historic tax credits and extensive experience manipulating local government into providing TIF subsidy.
Cassandra February 07, 2013 at 05:35 PM
The real crime here is obtaining public approval to use $12.5 million to provide the basic roads and services that will make the site developable using the promise that the support would save the buildings and natural areas. Then allow UWM-REF and UWM to make too many promises to their development buddies and then allow those developers to start dictating what they would like to see. We have now lost all sense of public purpose and are blindly throwing money at developers in the desperate effort to make something happen. It no longer bears any resemblance to the plan sold to the public. Stop the madness! Pull the plug!
Deb Strzelecki February 07, 2013 at 09:36 PM
jbw: Good one! My thoughts exactly. This whole project is so poorly thought out and just plain tragic. Maybe all those out there in unmarked graves will object in some way.
Toni Spelling February 10, 2013 at 06:08 PM
Why all of this? All of this land was designated green space until some idiot proposed to develop it -- why? there is way too much industrial space that is unused … IE: look at Burleigh where Roundys and all those other businesses vacated! Has anyone taken a drive through Bishops Woods on Bluemound to look at the vacancies? And, let's not forget Harley's building on Capital Drive! And, why on Earth are we doing this to make room for a foreign company that will just relocate some of the people that are in New Berlin? Why does the plan for this area keep changing? I thought this was suppose to be a big hotbed of local innovation!!!! I can remember when there was a big push to build up "innovation park" and they built this big hill with a promise that although the county was taking away valued green space, no building would ever be built that was higher than that hill -- oh - until of course they decided to put in GE. I am not anti-development. I am smart development. And, unfortunately - there are not too many people looking at old promise and the future. I don't think UW should be building here anyhow. NO PUBLIC DOLLARS SHOULD BE ALLOCATED TO ABSOLUTELY ANY DEVELOPMENT HERE!!! This is a crime! And, I'm sure somebody's making bucks off this -- probably the same people trying to minimize our democracy. Sad sad sad.


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