Oh, that poor, much maligned, Joe Gromacki, the City of Madison TIF Coordinator . . . he gets it from everyone. And now, it seems, he thinks I piled on as well . . .
You know, I too, hated Joe at one point, along with Anne Zellhoefer, the Assistant City Attorney who is on the TIF staff team. (Somehow Dean Brasser, the City Comptroller who is also on the TIF staff team escaped my wrath at the time.) It all stemmed from my first attempt to get the City to invest in affordable housing. The proposal at the time, was that all TIF projects had to have 15% affordable housing in them, sound familiar? Well, the staff didn’t like it . . . and I didn’t like them. But since those fateful meetings in Mayor Bauman’s office in the late 90’s I have come to actually like Joe, and I don’t know Anne as well, but I truly appreciate all that the two of them do for the City of Madison and respect their work.
Having said all of that, the TIF process still sucks. It is tortuous. The process for TIF for the Gorman project on the 800 block of E. Washington Ave. has been excruciatingly painful. However, in my humble opinion, it is not because of the staff.
Back in 2004 the Board of Estimates set up a subcommittee (Alders Olson, Onken and myself) to look at the TIF process and policies. We came up with a series of recommendations based on things we were hearing in the community and our own observations about the TIF process. The report of the subcommittee issued in June 2005 made several recommendations to fix the “tortuous” process. Specifically, we made the following recommendations about process:
1) Establish a deadline to create new TIDs required to provide TIF assistance.
This recommendation involves situations where a developer requests TIF assistance where no Tax Incremental District (TID) exists. TIF Law requires that a TIF district be adopted by Common Council prior to September 30 in order for it to be effective as of the year of its creation. The typical TID creation process takes about five months, or it must start no later than April. Industrial TIDs take about four months to create (no blight study required), therefore the deadline for such requests for industrial development would be May 1. TIF Law also requires that all project expenditures demonstrate that “but for” TIF assistance, the project could not be built. This becomes problematic when a district is created and no such finding is reached for the developer’s project. The members concluded that in order to create a TID prior to the statutory deadline of September 30, developers seeking the creation of a new TID as part of their request for TIF assistance must complete the gap analysis and land use approval process prior to April 1 (see simultaneous approval section in #9).2) Develop an annual vetting process for TIF projects in existing TIDs.
Developers are often unaware or ill informed about the City’s annual budget cycle and are surprised when, at the conclusion of TIF negotiations, the project cannot be funded until the next budget cycle. In order to keep both TIF requests and the budget process in the same decision loop, the subcommittee recommends that TIF assistance requests for funding in the next years’ capital budget would have to be submitted by a deadline (approximately June?). This approximate date coincides with the commencement of the annual capital budget cycle. Those projects that miss the vetting deadline may apply later but are subject to a 15-vote budget amendment. Requests would be predicated upon a mutual agreement had been reached concerning gap analysis and land use approvals between the City and the developer. Further, in the event that the requests exceed available City funds or concern projects that do not meet annual TIF goals or objectives, the City should explore a project evaluation and prioritization or “vetting” process that grades projects according to established TIF objectives and criteria.3) Create a TIF Pre-Application to be submitted to Board of Estimates.
Projects are often presented before the Board of Estimates that propose considerable policy exceptions, exceed zoning or land use guidelines or do not meet goals and objectives of TIF Policy. The subcommittee agreed that providing policy makers an earlier view of such potential issues was important and would recommend that staff create a TIF Pre-Application form with vetting criteria for developers to evaluate their potential eligibility for TIF consideration. On this form, developers must demonstrate gap, completion of due diligence concerning the site conditions and satisfactory meetings with the district alder and planning staff concerning building height, density and other land use issues. It is possible that such a Pre-Application could be available on-line so developers could gauge their eligibility for TIF consideration.4) Present potential TIDs to the Board of Estimates prior to starting the TIF creation process.
The subcommittee believed that staff should submit a general plan concept sometime during the early stages of developing a TID project plan. This would apply for TIDs that provided assistance to private development as well as TIDs created solely for infrastructure.5) Require developers to pay the non-refundable application fee.
This recommendation institutionalizes the application fee (currently .05% of the amount requested) to be paid to the City at the time of TIF Pre-Application.6) Establish a forum for developer appeal.
Generally, such appeals already occur before the Board of Estimates. The sub-committee agreed to institutionalize one developer appeal, after initial BOE review of the TIF Pre-application, as a part of TIF policy.7) Require developers to demonstrate due diligence on the purchase of land.
This would include requiring developers to option land while conducting studies of soil conditions, comparable land prices, environmental issues and initial meetings with the district alder and planning staff concerning building height, land use and other issues and provide such findings to the City.8) Explore BOE review of IZ Waiver requests.
The members proposed that BOE review IZ waiver requests, either independently or jointly with Plan Commission due to their direct impact on TIF.9) Implement simultaneous TIF and land use approvals.
Members expressed interest in pursuing a simultaneous process where consideration of TIF and the land use approval, which were often inter-related, would make more sense than a process where the land use is already approved and the City left with few options or adjustments that might make TIF assistance unnecessary or more feasible.10) Require developers seeking TIF to identify this in their land use applications and simultaneously apply for TIF.
Land use approval review and TIF consideration should be simultaneous.
In this particular case, had these policies been in place, specifically numbers 2, 3, 5, 6, 9 & 10 the process would have been alot smoother and transparent. Specifically . . .
- An annual vetting process would have allowed us to appropriately budget for this project and the Todd Drive project and would have given alders and the public a more realistic expectation of what the numbers might be, instead of creating sticker shock.
- A pre-application process would have allowed Board of Estimates to make preliminary decisions about TIF on this project earlier, which could have guided the staff and the developer in their subsequent discussion about TIF for this project and we wouldn’t be talking about potential exceptions to policy at this late date.
- If developers were required to pay the fee, based on the amount of their request, up front, the developer would put more effort up front into the amount of their request and we would know how serious the developer is about their number.
- If there was an opportunity for developer appeal, we wouldn’t hear complaints that the staff is taking to long, followed by claims from the staff that they were waiting for numbers from the developer. We could save weeks of wasted time due to miscommunications and lots of fingerpointing.
- If developers declared their intent to use TIF up front and applied simultaneously, we wouldn’t have bad feelings about some people believing the developer said they didn’t need TIF. (I”m pretty sure they didn’t say that, but instead they said “We don’t know yet”)
There are several other procedures listed above that would be very useful in other cases, and we need to get the Board of Estimates to put this on their agenda, and end the stalling of the last 8 months. It will help the staff, the developers, the neighborhoods, the general public and the alder and save us all some time. And maybe, the process, might get a little less, um . . . tortuous.
So Joe, you can wipe away your tears . . . relax, its not your fault, it’s the process, not you!
Note: For those of you who think I’m being mean to Joe, I’m not. I’m teasing him. We joked about my blog making him cry on Friday and he’s well aware I used to hate him and we laugh about that now. And “but for” Monday, at the Board of Estimates, when we’re talking about the Gorman project, I usually agree with Joe on the policies.
