By Peter Weinschenk
The Wausau Center Mall built 1n 1983 was the biggest economic development project Marathon County had ever experienced. It replaced a tired downtown with a 423,132 square foot mall served by two multi-story parking ramps. The mall featured three anchors–Sears, JCPenney and Prange’s (later Younkers)–and funneled shoppers across northcentral Wisconsin into downtown Wausau. At its height, the retail property was worth over $100 million.
But then the mall died. Shoppers migrated to “big box” stores in Rib Mountain and shoppers started buying goods over the internet. By 2018, the anchors pulled out of the mall. In 2021, the mall properties were worth a mere $9.6 million and bulldozers flattened the huge structure.
For some, the Wausau Center Mall was a big mistake, a financial debacle. Citizens paid $57.7 million in higher property taxes to fund Tax Incremental Finance subsidies but never received, as promised by the city-funded project plan,“widespread, long-term property tax benefits to all taxing jurisdictions.”
Instead, a typical taxpayer in a modest Wausau home might have paid around $600 in net higher property taxes (adjusted for inflation) to fund the mall’s brief 38-year life.
Today, however, we will hear the other side by speaking with two City of Wausau boosters, city council alderwoman Lisa Rasmussen and Greater Wausau Chamber of Commerce executive director Dave Eckmann.
They will argue the mall, in creating jobs, commerce, sales tax revenue and giving people easy access to consumer goods sold by national chain stores, was a huge success even if taxpayer subsidies were never fully repaid.
Their pitch is that, yes, the mall cost residents something, but that a greater good was served.
I will further hear from Liz Brodek, economic development director for the City of Wausau. She will echo much of what Rasmussen and Eckmann have to say, but with a twist. She will argue that cities ignore Tax Incremental Finance at their peril.
I meet Rasmussen at Vino Latte, a popular coffee place on the city’s west side.
The 16-year veteran of the Wausau City Council says she was present for the grand opening of the mall when she was just 13. The experience, she says, was electrifying.
“Was I down there at the mall for the opening? Absolutely. It was amazing. The excitement that surrounded that project was unparalleled. Everything came to a stop. There were parades. This would be the economic engine for the city and the county for the next three decades.”
Rasmussen says that she started her career on the Wausau City Council as a Tax Increment Finance skeptic but, over the years, as she has seen various city projects develop, believes well thought through projects, including the mall, are good for communities even if taxpayers never see a direct, dollar-for-dollar financial return on the subsidies they finance.
“The value that was gained with the Wausau Center Mall over a generation was definitely worth it,” she says, listing the public benefits. “…The property tax, the sales tax, the destination revenue, the job growth and parking revenue. The fact that we did not have to drive 90 miles to shop for simple things like school clothes. The fact that we were able to pull in destination dollars from Up North.”
Rasmussen shudders at the thought that the Wausau Center Mall would never have been built.
“I believe that if the Wausau mall didn’t happen downtown Wausau would have died,” she says.
Rasmussen says that if the Wausau Center Mall cost a homeowner something like $600 over 38 years in higher taxes it is nothing worth worrying about.
“That’s under $16 a year or a dollar and change a month” she says. “That’s pretty small.”
Rasmussen says she has learned to consider development projects not simply by how much they cost, but how much they cost compared with doing nothing.
With this perspective, she says, the Wausau Center Mall was a grand success.
“Think of what Wausau would be if the Wausau Center Mall never existed,” she says. “We would have had a dead or dying downtown. All of the people who worked in the mall would never have had those jobs. The county would not have derived the sales tax and property tax from it. And you would have had a massive cross section of our urban downtown in a state of stagnancy or decay.”
I ask Rasmussen, then, if she thinks citizens should view Tax Incremental Finance not as an “investment” where citizens get a return on the subsidies they finance but, instead, as a “development tax” program where citizens buy jobs, factories, stores or, otherwise, progress.
Rasmussen says that taxes pay for the public good, not individual financial return.
“I don’t pay my property tax wondering what’s in it for me,” she says. “I pay my taxes as part of a collective.”
Rasmussen says it is wishful thinking to believe Wausau can get jobs, stores and commerce from an unsubsidized marketplace, not Tax Incremental Finance.
“Right or wrong, a climate has been created in Wisconsin whereby business and developers look for incentives,”she says. “Tax Incremental Finance has to be that tool in the toolbox. If we didn’t use that tool, we would be outpaced by everyone we compete with. You need to find a way to get a site to be competitive. You need to install the necessary infrastructure to stimulate growth.”
Rasmussen says her support for Tax Incremental Finance is linked with her hope that the City of Wausau can prosper in the future, both for her family and countless others.
“When I was a kid, most of my graduating class couldn’t get out of Wausau fast enough,” she recalls. “Some have come back, while others have stayed gone. You don’t want to be one of those communities where most of their graduating seniors are like ‘good-bye’ and they don’t ever want to come back. You are going to be a ghost town. I want to position Wausau so that my kid wants to work here, where my kid wants to raise a family here and there is a job for him to do it and a place for him to live.”
I next meet with Eckmann. He works in the newly renovated Greater Wausau Chamber of Commerce building just down the street from a still standing chunk of the old Wausau Center Mall. This is the yet to be destroyed JCPenney’s building.
Eckman is a believer in Tax Increment Finance. That’s because he sees this municipal “tool” generating jobs, factories, stores and prosperity in general across entire regions.
In his terminology, the “multiplier” effects of business subsidies positively impact “the big picture” of life in an economic development area.
Eckmann acknowledges that the Wausau Center Mall did not produce a positive property tax benefit for central Wisconsin residents, but he argues that a cost of around $600 per household is reasonable for nearly four decades of commerce.
“That’s pretty good for what happened here,” he says regarding downtown Wausau. “Let me remind you of all of the development that occurred and not only in the City of Wausau.”
Eckmann uses a personal story to demonstrate his point. “My family and I used to live in Rib Lake,” he remembers. “We used to go to the Lodge at Cedar Creek in Rothschild with the intention of having some fun, going out to eat but also shopping at the Wausau Center Mall. We were spending dollars not just at the mall but elsewhere.”
Eckmann is big on “public/private partnerships.” Translated, this means government using taxes to spur private investment.
He argues that neither government nor private industry alone can accomplish “the public good” but that, together, good things can happen using a technique like Tax Incremental Finance.
“Can government and industry each separately oversee the public good?” he asks. “Absolutely not. You have to have public/private partnerships. Tax Incremental Finance is part of that.”
Eckmann is one of the City of Wausau’s top salesmen. Part of his job is to woo employers and retailers to the community. For him, Tax Incremental Finance is necessary for the city to compete for growth.
“You are either going to compete or you are not,” he says. “Businesses have a choice to go to other communities. Tax Incremental Finance is a competitive tool that’s used throughout the country.”
I point to a large, famous photograph hanging in the chamber lounge showing the Wausau Group, a band of early city industrialists who changed the city from a logging town into an insurance and industrial hub. Today, their legacies live on in the form of local foundations.
I ask whether those businessmen back in the early 20th century needed government help to promote the public good. Eckmann says that things are different now. “The expense of development has changed,” he argues.
Eckmann says that while business people in the past could tap a large workforce in Wausau to man factories and offices, today it is up to both government and industry to help “create place” in the city and county to attract young, skilled workers for the jobs of the future.
Tax Incremental Finance is useful not in just providing incentives for business projects, but bringing needed labor to the region, Eckmann says.
“We are in a talent desert,” he explains. “We don’t have the density to compete. Young people have choices to work for companies across the globe. To bring workers here, we have to compete for vibrancy.”
In an e-mail statement to me, city development director Brodek repeats much of the Rasmussen and Eckmann message. She doesn’t dispute that the Wausau Center Mall did not repay property taxpayer subsidies, but argues that the mall kept the city’s downtown alive and generated jobs, goods and sales tax revenue.
“Wausau made a bold decision to construct a mall in the middle of its downtown, and for decades it paid dividends as an economic driver.” she writes. “It brought jobs and economic activity to an area that might have suffered otherwise.”
She adds that Wausau could have suffered a dim future if it failed to take a risk on a large downtown mall.
“The cost of doing nothing can be seen clearly in some communities that do not make these investments,” she writes. “Those communities that do not change and adapt have drastically lost population and are left with horrible roads and homes that are empty and falling apart. This blight has left a bleak future in these communities with an aging population and very few younger residents. The cost of doing nothing and fighting change is a death sentence to the economic viability of a city and region.”
Watch for Part Three of this series. I make the case that local governments need to reform how we use Tax Incremental Finance.
