By Shereen Siewert
Wausau City Council President Becky McElhaney is sharply criticizing the timing of a meeting to discuss a multi-million dollar taxpayer investment in a downtown development project, saying the early start does not allow for participation from the general public.
A joint Finance and Economic Development Committee meeting is set for 4:30 p.m. Tuesday to review a request for Tax Increment Funding to support a roughly $48 million complex featuring 153 market-rate apartments and ground floor retail space. The Foundry on 3rd is proposed for a portion of the former Wausau Center mall site and is the first in multiple phases for redeveloping the space. The city no longer owns the property.
“I requested a public meeting where residents would be able to both ask questions and receive answers,” she said. That request was made Friday afternoon to Wausau Mayor Katie Rosenberg, Development Director Liz Brodek and Dist. 8 Alder Sarah Watson, who chairs the Economic Development Committee.
None have responded to her request.
McElhaney said that Tuesday’s meeting is one that the entire council and community have been waiting for due to the interest in this development.
“Maybe I am the only council member that has outside obligations with my employment, but disenfranchising members due to working past 4:30 p.m. is not a good look in my opinion,” McElhaney said.
Despite a public campaign by the Greater Wausau Chamber of Commerce to encourage support for the project, reaction has been mixed. McElhaney said she has had numerous calls and emails from residents stating they feel disenfranchised from the process due to a lack of detailed information about the project and its cost.
Some members of the community say that with such an investment at stake, the community deserves more public participation in the process.
“The City must accommodate the needs of working and poor people who can’t make regular Council meeting times as they juggle family and job responsibilities, lack reliable transportation, or face accessibility challenges,” said Bruce Grau, in an email to Wausau Pilot & Review. “Current meeting times accommodate only retirees, business leaders and high end developers.”
Lisa Rasmussen, who chairs the Finance Committee, told Wausau Pilot & Review the meeting time was chosen to allow enough time for the discussion and not impact the start of the council meeting that follows.
“The Finance committee had a full agenda before the joint item arrived, including a presentation,” she said. “Both committees were surveyed for quorum availability before the time was set and indications were that the proposed time would work. We anticipate discussion with both the Ehlers rep and outside counsel working on the agreements and want to be sure there is time for members to get their questions answered.”
Unclear is why a separate date was not chosen or a public input meeting has so far not been held on an issue that will be paid for in part by significant taxpayer investment.
Dist. 4 Alder Doug Diny said that whole committee members were polled, urgency should not trump transparency.
“We discussed the 6-day rule at the council retreat and seemed to have had a consensus that last minute large packets are not only difficult for council members to digest in short order, it also disadvantages the public who aren’t checking the city website every day, “ he said.
Of the $10.8 million in funding recommended by Ehlers’ consultant, $6 million is in the form of a Municipal Obligation Revenue Note, or MRO. According to the Ehlers report, the project could be located with Tax Increment District 12 after boundary amendments. Based upon an annual 1 percent inflation factor, 80 percent of tax increment being available to the developer and a financing rate of 5.5 percent, the project could support a $6 million MRO Mortgage over a 21-year- term, the Ehers report states. In total, principal and interest, public assistance to the project would be $10.8 million.
Diny said he will insist the council reviews the Consolidated Annual Report for 2021 along with Wausau’s General Obligation debt and other commitments for 2022-2023 so that the group understands the impact on the city’s financials. Diny also said the “but for” clause for TIF participation will need to be met.
“I’ll also consider the explanation from Liz Brodek and Mayor Rosenberg tomorrow night to understand how they see this fitting the strategic plan and budget,” Diny said.
Municipalities require proof that a proposed TIF development would not occur “but for” the establishment of a TIF district, but the rules are often open to loose interpretation, according to the Lincoln Institute of Land Policy. The organization promotes “a more active role in the conversations that shape public policy decisions,” according to its mission statement.
In theory, TIF generates new property tax revenue by spurring development that would not otherwise occur, which results in a larger tax base. The tool can help build trust and provide for a mutual commitment between local government and developers, and it can facilitate political support for investments by stipulating that taxpayers outside the TIF district will not have to contribute, according to The Lincoln Institute.
But Lincoln Institute Communications Director Will Jason wrote that TIF is prone to several pitfalls. In practice, TIF can capture revenue that would not have been generated through normal appreciation in property values. But that over-capture of revenue diverts resources away from public services and overlying government entities, such as school districts – already struggling to meet their financial needs.
In addition, TIF can make cities’ financial decisions less transparent by separating them from the normal budget process, Jason wrote. In Chicago, for example, $660 million — nearly a third of the city’s property taxes — go to TIF districts, making public scrutiny of these funds more difficult and preventing elected officials from re-prioritizing the spending. Finally, TIF carries the same risks as other types of business tax incentives, which can lead to inter-city competition and short-term decision-making.
Wausau’s meeting is set for 4:30 p.m. Tuesday at City Hall, 407 Grant St. See the full packet here.
Dist. 10 Alder Lou Larson called the financing ask “appalling” and said city leaders need to be mindful of the burden on taxpayers. Larson noted that Wausau already spent millions on the project “before the first shovel has (been) dug on property that is not city owned,” including $1 million for the mall purchase, more than $2 million to tear down a mall that the city doesn’t own, plus another $1.5 million to build streets and infrastructure to support the project.
But Rasmussen said those who “seek to stall and deter growth here should understand that the best way to increase funding into the city…is to have new taxpayers paying tax bills in our city.” Rasmussen said feedback in her district has been almost entirely positive on the project.
“The ask as I read it is $6M with an interest component where the amount cannot exceed $10.8M. It is not a grant request for $10.8M on the front end, so we should be sure we are not confusing residents by leading them to believe the cost cap is the initial ask.”
Rasmussen said that every council faced with large projects faces the same debates.
“When the mall was first built, there were supporters and detractors,” she said. “Today is no different. Then and now, members must consider where they want to be as a city in the future and weigh it against the alternative which is a stagnant local economy. While other areas continue to rebound from the pandemic, we cannot sit still or Wausau will be left behind economically.”
