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CITY OF MIDDLETON, WISCONSIN TAX INCREMENT FINANCING DISTRICT NO. 3 AMENDMENT NO. 9 Prepared by: Plan Commission Hearing and Approval: August 25, 2015 Common Council Action: September 1, 2015 Joint Review Board Approval: September 16, 2015 ---PAGE BREAK--- This page intentionally left blank ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page i TABLE OF CONTENTS SECTION I. INTRODUCTION 1 SECTION II. DESCRIPTION OF HOW TAX INCREMENT DISTRICT NO. 3 WILL PROMOTE THE ORDERLY DEVELOPMENT OF THE CITY OF MIDDLETON 2 SECTION III. TAX INCREMENT BOUNDARY AND EQUALIZED VALUES 2 SECTION IV. EXISTING USES AND CONDITIONS OF REAL PROPERTY 7 SECTION V: PROPOSED PUBLIC WORKS AND ESTIMATED COSTS 7 SECTION VI. NON TAX REVENUES AND NON PROJECT COSTS 18 SECTION VII. ECONOMIC FEASIBILITY ANALYSIS 18 SECTION VIII. CONSISTENCY OF ACTIVITIES WITHIN TAX INCREMENT DISTRICT #3 WITH THE CITY ZONING ORDINANCE, MASTER PLAN AND OTHER DEVELOPMENT ORDINANCES 22 SECTION IX. STATEMENT ON 22 APPENDIX A: METHODOLOGY FOR DETERMINING THE BASE VALUE OF SUBTRACTED PROPERTIES 23 APPENDIX B: LEGAL DESCRIPTION 31 APPENDIX C: LETTERS TO TAXING JURISDICTIONS 35 APPENDIX D: PROOFS OF PUBLICATION FOR PLAN COMMISSION HEARING AND JOINT REVIEW BOARD MEETINGS 43 APPENDIX E: PLAN COMMISSION PUBLIC HEARING MINUTES AND RESOLUTION APPROVING AMENDMENT NO. 9 PROJECT PLAN 47 APPENDIX F: CITY COUNCIL RESOLUTION APPROVING TID AMENDMENT NO. 9 PROJECT PLAN 53 APPENDIX G: JOINT REVIEW BOARD MINUTES, REPORTS, AND RESOLUTION ON TID AMENDMENT NO. 9 57 APPENDIX H: CITY ATTORNEY OPINION LETTER 67 APPENDIX I: IMPACT ON OVERLYING TAXING JURISDICTIONS 71 ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page ii This page intentionally left blank ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 1 SECTION I. INTRODUCTION Middleton Tax Incremental District No. 3 (TID was initially established in September 1993 and added parcels in 1996 to yield a base value of $64.7 million. Since then, the tools offered by the TID have been used judiciously by the City to leverage unprecedented levels of private development that have truly transformed the community. As of January 1, 2015, the value increment of the District was $409 million, not including the $270 million the City has previously subtracted from the District in 2006, 2009 and 2011. By sharing the increased tax base benefits with the overlying taxing districts as soon as possible, all taxing jurisdictions have been able to benefit from the more than $5 million in annual tax revenues generated from the previously subtracted parcels. In 2012, the state enacted 2011-2012 Wisconsin Act 139, which extended the spending period of TID #3 to 32 years and extended the total life to 37 years (to 2025 and 2030 respectively). The City then adopted, and Joint Review Board approved, Amendment No. 8 to TID #3 to reflect these changes. The primary purpose of the legislation and amendment was to allow more time to use the resources the District provides to facilitate additional tax base and job growth and to complete the associated projects. Since 2011, the value increment has grown an additional $91 million and, as detailed in this amendment, the City projects an additional $380 million in growth between now and the closure of the District in 2030. Accordingly, the City is proposing to subtract $70.5 million in value increment with this Amendment No. 9 as well as to incur additional expenditures of $85.7 million to facilitate this additional tax base growth. At the current combined, net tax rate of $21.16 per $1,000 of value, approximately $1.5 million in annual revenues from these subtracted properties will be made available to the overlying taxing jurisdictions beginning in 2017. As in the past, all authorized projects are contingent upon the availability of future incremental tax revenues to pay for them, and the City will continue to use a conservative and responsible approach to undertaking additional costs to ensure that any additional project costs and debt incurred by the TID will not impair the ability to close it within the authorized time frame and with a positive cash balance. The levels of development and private investment in TID #3 since its creation have exceeded all expectations in meeting the District’s original goals in eliminating economic blight and providing infrastructure and support for the development of new jobs and tax base. This truly could not have been accomplished but for the availability of the resources provided by the TID and the cooperation and support received from all overlying taxing jurisdictions. While there is still more work to do, the City is committed to sharing the benefits of this success with all of the overlying taxing jurisdictions as soon as possible and has proposed the subtraction of additional parcels accordingly. The City fully intends to continue its track record of responsible use of TID resources to be generated by the remaining parcels, and we fully expect that it will continue to yield significant returns to all overlying taxing jurisdictions and the people they serve. Along with the extension of the spending period and life of the District authorized by the legislature in 2012, TID #3 also was granted four additional boundary amendments over the remaining life of the District, with this Amendment No. 9 being the first of those four. Unless stated otherwise, this amendment supplements the original project plan and all previous amendments, all of which continue to remain in effect. The format of this amended project plan document follows the same general layout and sections as the original project plan and previous ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 2 amendments. Sections from previous documents not included in this amendment are deemed to be unchanged and remain in effect as previously approved. SECTION II. DESCRIPTION OF HOW TAX INCREMENT DISTRICT NO. 3 WILL PROMOTE THE ORDERLY DEVELOPMENT OF THE CITY OF MIDDLETON No change has been made to this section in this amendment. SECTION III. TAX INCREMENT BOUNDARY AND EQUALIZED VALUES Table 1 and Map 1 identify the 20 parcels proposed for subtraction as part of this amendment. The table uses preliminary real estate and personal property assessed valuations as of July 15, 2015, as the equalization ratios for 2015 will not be available until after August 15, 2015. The table shows an estimated total value of $73,249,400 to be subtracted from the District. This value, minus the base value when the District was created in 1993 ($2,749,842), equals a subtraction of $70,499,558 in value increment. The estimated January 1, 2015, total value increment of District is $409,038,800, leaving an estimated total value increment of $338,539,242 following the subtraction. Due to the fact that the Department of Revenue will not certify this amendment until February 2016, the $1.5 million in tax increment associated with the subtracted properties will not begin to flow to the overlying taxing jurisdictions until 2017. Since the District was established in 1993, numerous properties have been subdivided and combined. Appendix A describes the methodology for determining the base values of the parcels to be subtracted and contains a table aligning the current tax parcel identification numbers with those in place in 1993. Appendix B contains a revised legal description for the District. ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 3 T A B L E 1 : P A R C E L S T O B E S U B T R A C T E D TABLE 1: PARCELS TO BE SUBTRACTED ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 4 This page intentionally left blank ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 5 ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 6 This page intentionally left blank ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 7 SECTION IV. EXISTING USES AND CONDITIONS OF REAL PROPERTY No change has been made to this section in this amendment. SECTION V: PROPOSED PUBLIC WORKS AND ESTIMATED COSTS Per the Joint Review Board’s approval of project plan Amendment No. 7, the total level of authorized spending for TID #3 is $113,414,000, exclusive of interest and finance charges. By the end of 2015, the City expects to have incurred a total of $93,455,600 in direct costs and obligations under pay-as-you go under existing agreements with developers since the inception of the District, exclusive of interest and finance charges. As shown on Table 2 at the end of this section, the City anticipates additional direct project costs of $84,780,026 (plus $900,000 in interest and finance charges) to facilitate additional growth and development over the remaining life of TID Accordingly, the total level of direct spending by the close of the District in 2030 is projected to be $178,235,626, or $64,821,626 more than the amount authorized in Amendment No. 7. Below are descriptions of the major public improvement categories, which are necessary and standard improvements for eliminating blight and promoting redevelopment of blighted areas. In addition to a general description, each category contains a list of the following types of proposed expenditures. Priority Expenditures are those that the City intends, but is not required, to undertake based on the projected tax increments to be received from the future redevelopment projects described in Section VII. Expenditures within a Half-mile are those priority projects, or portions thereof, that may occur within one-half mile of the District boundary per Wis. Stats. §66.1105(2)(f)1.n. and are shown in the descriptions below with an asterisk In most cases, projects outside of the District boundary are incidental to or extensions of projects with the boundary that continue out of the District in order to be fully complete and of the greatest benefit to the District. All other expenditures within a half-mile not specifically identified herein will require an amendment to this project plan and approval of the Joint Review Board. Contingent Expenditures are those the City may undertake provided sufficient tax increments become available to pay for them. The tax increments projected to be received from the future redevelopment projects described in Section VII are not thought to be sufficient to cover the Contingent Expenditures and, therefore, these expenditures are not included in the financial feasibility analysis contained in Section VII. However, should additional tax increments be generated, then the City may use them to undertake these projects. The costs for the priority projects are shown in Table 2, and their locations shown on Map 2. Note that the projects described in the original project plan and previous amendments that have yet to be undertaken remain valid and are intended to be reflected in the descriptions below and in Table 2. Consistent with the goals and purposes of the District as articulated in the original project plan and previous amendments, the additional project costs included in this Amendment No. 9 are intended to promote orderly development, stimulate commercial revitalization, create jobs, improve housing, enhance the value of property, and broaden the property tax base of the City of Middleton and the overlying taxing jurisdictions. Below are descriptions of those projects that are considered necessary and standard costs for promoting redevelopment within the District. In addition to a ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 8 general description of eligible costs, some project categories contain a list of priority projects the City intends - but is not required - to undertake based on the projected tax increments to be received from property in the District. Implementation and construction of the proposed projects identified herein will require case-by- case authorization by the Common Council. Public expenditures for projects listed in this project plan amendment should and will be based on market conditions and the status of development at the time a project is scheduled for construction. The Common Council is not mandated to make the public expenditures described in this plan. Redistribution of project costs within the total spending estimate will not require an amendment to the project plan provided that the expenditures meet the purpose and intent of the District as expressed in the plan. Scheduling of project activities will be monitored to ensure that the projected economic stimulation is occurring prior to proceeding with other project activities. This monitoring will occur on an annual basis. If economic conditions are not altered by the proposed project activity, other project activities may be delayed and/or removed from the project schedule. The goal of the proposed projects is to provide the public improvements and inducements necessary to attract and stimulate private reinvestment and redevelopment. The project costs shown on Table 2 are preliminary estimates and may be adjusted and refined. The adjustments and refinements may include changing the year in which a project activity is undertaken and reallocating the cost of specific projects within the limitation of the total estimated project costs. The City reserves the right to increase these costs to reflect inflationary increases and other uncontrollable circumstances between 2015 and the time of construction. The City also reserves the right to increase certain project costs to the extent others are reduced or not implemented without amending the project plan. The tax increment allocation is preliminary and is subject to adjustment based upon the implementation of this project plan. Other adjustments to this project plan will be made on the recommendation of the Plan Commission to be reviewed and acted upon by the Common Council. 1. Capital Costs These costs include, but are not limited to: the actual costs of the construction of public works or improvements; new buildings, structures, and fixtures; the demolition, alteration, remodeling, repair or reconstruction of existing buildings, structures and fixtures other than the demolition of listed historic properties; the use of sustainable (“green”) building features and renewable and on-site energy systems; the acquisition of equipment to service the District; the removal or containment of, and the restoration of, soil or groundwater affected by environmental pollution; the clearing and grading of land, and waterway improvements to improve navigation, recreation and water quality; airport, transit and transportation-related improvements other than roads and bicycle facilities; and area beautification and public art. Also included are on-street and off-street parking facility improvements including: repair, expansion, reconfiguration and construction of existing and new parking facilities; developer assistance with parking; directional and regulatory signage; landscaping, screening and beautification of parking facilities; and similar improvements necessary to serve the parking needs of the District. Such project may occur within the District or within a half-mile of the District as necessary to further District goals. The cost of land acquisition, design, construction management, and other soft costs related to any of the above also may be included. Priority Projects A. Downtown parking facilities – This includes new parking structures and lots and improvements to existing parking facilities. ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 9 B. Additional parking facilities – This includes new parking structures and lots and improvements to existing parking facilities to enable densification outside of downtown. C. Transit improvements, including: a. Metro bus infrastructure* – These include shelters, transfer points and similar facilities for workers, visitors and residents within the District, but some of the locations may be just outside of the District boundaries. b. Rail corridor improvements* – These include beautification and functional improvements to facilitate greater use of the corridor with some of the improvements continuing outside of the District boundaries to reach a more logical/functional termination point. D. Alternative transportation improvements* – These improvements could include a variety of alternative transportation facilities, such as car sharing, Smart car lots, etc. that would help to relieve congestion within the District and the need for more or larger parking facilities. Depending on the nature of the facility and available land area, some of the locations may be just outside of the District boundaries. E. Airport improvements – These include facility and aesthetic improvements to the airport to achieve greater use and compatibility with the rest of the District. F. Urban Greenway and stormwater improvements* – Map 3 depicts the Urban Greenway Impact on Economic Development concept approved as part of Amendment No. 8, which depicts the importance of the greenway connections and their impact on business relocation and stimulation. Given the interconnected nature of the system, some of the improvements may take place with one-half mile of the District boundaries. 2. Infrastructure These costs include, but are not limited to, that portion of costs related to the construction or alteration of: sewage treatment plants, water treatment plants, storm water detention/retention and treatment facilities, and other environmental protection devices including sustainable features for any of the foregoing as well as renewable and on-site energy systems related thereto; storm and sanitary sewer lines; water lines; amenities on streets; bike paths, trails and related facilities; and the rebuilding and expansion of streets, the construction, alteration, rebuilding or expansion of which are necessitated to carry out the goals of this project plan within the District and within a half-mile of the District. Infrastructure also can be installed further outside of the District if required to carry out the project plan, but only the portion which directly benefits the District is an eligible cost. The cost of land acquisition, design, construction management, and other soft costs related to any of the above also may be included. Priority Projects A. Bicycle/pedestrian improvements* – These include on- and off-street trails, including the Good Neighbor Trail, and related facilities such as storage areas and bike sharing stations to provide commuter and recreational tourism benefits to District businesses and residents. Like the Urban Greenway system, the existing bicycle infrastructure has already proven to be a key asset in the attraction of at least two large corporations to the District. Given the nature of these facilities, some of them may extend outside of the District boundaries. ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 10 B. Public street improvements including public utilities replacements/relocations: a. Pleasant View Road reconstruction* – The southern end of this road has not been improved since it was annexed into the City more than two decades ago, yet its importance as a key connection point to Madison is increasing along with the traffic volumes. Likewise, further improvement to the north end also may be necessary with the increased usage. Given that the road meanders in and out of the District, some of the improvements may be undertaken outside of the District boundaries in order to ensure the road is fully functional throughout the entire corridor. b. University Avenue reconstruction (including the Parmenter St. intersection)* – The northeast corner of the intersection is not in the District so incidental improvements outside of the District boundaries will be needed to complete the full reconstruction of this critical intersection and gateway to the District. c. Terrace Avenue Phase 2 (High Point Road/Terrace Avenue intersection) – This will be a continuation of the recent improvements made to Terrace Ave. just east of High Point Rd. d. High Point Road reconstruction – This road is a key point of ingress/egress for the District and is in need of significant repairs and upgrades. e. Capacity improvements on Airport Road and Century Avenue – These streets also provide important access into and out of the District and are becoming increasingly congested. f. Capacity improvements for Deming Way/Highway 14 corridor* – Improvements also are needed for these important corridors, portions of which will extend just outside of the District boundaries. C. Sustainable features/renewable energy systems for public infrastructure – Over time, existing infrastructure such as lift stations, street lights, etc. will become more cost effective to operate and maintain with the addition of new energy technologies and sustainable features. 3. Real Estate Acquisition and Relocation These costs include, but are not limited to, any deficit incurred resulting from the purchase of property for public use or the resale or lease as lessor by the City of real or personal property for consideration that is less than its cost to the City. Also included are relocation payments made in certain circumstances as the result of the City or CDA acquiring property within District. Priority Projects A high-quality, medium to high density mix of development is encouraged within the District. Several longstanding business parcels located along University Avenue west of Highway 12 may be purchased outright by the City, or receive relocation payments for the purposes of promoting infill redevelopment of the highest and best use. These former industrial properties may require significant site preparation or remediation before becoming suitable for reuse. The City may use funds under this category to offset significant write-downs on lands throughout the District as deemed necessary to attract the extent and quality of development. Accordingly, land acquisition expenditures may occur anywhere in the District. Any relocation necessitated by these acquisitions would be handled consistent with Wis. Stats. Chapter 32. ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 11 4. Economic Development Incentives These costs include, but are not limited to, cash grants, loans, incentives, and any expenditures of the type described in any of the other categories listed in this section by or on behalf of a developer in order to induce development and ensure project feasibility. All redevelopment projects that receive some form of direct or indirect TIF participation will first enter into a development agreement approved by the Common Council that specifies the terms of the TIF contributions and the obligations of the receiving property or business owner. Such contributions may be in the form of direct cash grants or in “pay-as-you-go” payments over time. Priority Projects Economic Development Incentives may be provided to development anywhere within the District where necessary to further District goals. The amount and form of TIF participation for a particular project, if any, will be determined on a project-by-project basis as described in a project development agreement depending upon a project’s specific needs, funding availability, and the project’s consistency with the goals and objectives stated in this plan and other plans and policies of the City including, but not limited to, the removal of blight, building renovations, creation of new jobs, provision of work force housing, or use of sustainable building features and/or provision of renewable or on-site energy systems. 5. Plan Implementation and Cost Recovery These costs include, but are not limited to, those costs incurred for architectural, planning, engineering, financial, marketing and market analysis, legal advice, and other services necessary to implement this Plan. Among other services, these may include developer recruitment and negotiations, capital improvement and infrastructure design, site design, public space design, and similar services whether conducted by City staff, contractors, or one or more of the City’s partner agencies such as the Community Development Authority, Middleton Tourism Commission, or Chamber of Commerce. It also includes the ongoing administration of the District, including cost recovery for service demands necessitated by and specific to the District’s development as well as the completion of required annual reports, forms and audits, and similar efforts. Priority Projects Active project management has been and will continue to a key activity and expenditure for successful implementation of the TID #3 project plan. It is the intent of the Middleton Common Council to offer a wide range of services which may include, but are not limited to: recruitment of appropriately-qualified developers for each potential redevelopment site; marketing the District for potential businesses; providing low-interest loans and/or interest write-downs for property rehabilitation and redevelopment; providing grants for façade improvements; site acquisition and preparation; and cost recovery for service demands necessitated by and specific to the District’s development. In addition, implementation of this Plan may include the following general tasks, which City staff, contractors or partner organizations may reasonably undertake at the City’s discretion: • Conducting more detailed planning and engineering studies; • Developing more refined land use and redevelopment plans for implementation; • Developing standards for which development within the District will need to conform; • General guidance and referral of actions to other City committees and the Common Council; • Establishing and managing an economic development master fund; ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 12 • Identifying and applying for additional non-TIF revenue sources such as grants; • Public infrastructure construction oversight; • Developing and implementing a business marketing plan; • Developer recruitment; • Business recruitment; • Preparation of annual reports and submittal of required forms and fees to the state Department of Revenue; and • Conducting audits. 6. Finance Charges and Interest Finance charges and interest include, but are not limited to, interest paid on debt obligations incurred to pay for project costs, debt issuance costs, capitalized interest, coverage and reserve funds, and costs of redemption prior to maturity. This also may include interest paid to developers under pay-as-you-go provisions included in an approved development agreement. Priority Projects As shown on Table 3 in Section VII, $4,500,000 in City borrowing is planned for 2018, resulting in $900,000 in interest and finance charges. The level of borrowing, interest rate and finance charges may vary based on economic conditions and projected District cash flows at the time the time the obligation(s) is incurred. Therefore, the cost shown in Table 3 is an estimate and is subject to change without having to amend this plan. 7. Donations to other Districts Allocations of surplus increment to other qualifying tax increment districts within the City are authorized in accordance with Wis. Stats. §66.1105(6)(f). Priority Projects Subject to available increment once all other obligations of the District have been met on an annual basis, increment from TID #3 may be allocated to another qualifying tax increment district within the City of Middleton. As a District with more 50% of the property found to be blighted, City of Middleton TID #5 qualifies to receive allocations from TID #3 per Wis. Stats. §66.1105(6)(f). In the future, the City may create additional qualifying districts and may allocate increment from TID #3 to such districts consistent with the provisions of the Tax Increment Law then in effect. Contingent Projects The financial feasibility analysis in Section VII includes about $8.7 million in allocations from TID #3 to TID #5 and the potential for a significant fund balance for TID #3 at the close of the District based on increment from projected new development. Depending on the actual financial state of TID #3 in the final years of its statutory life, the City may elect to allocate up to one half of the fund balance to TID #5 and any other qualifying Districts that may then be in existence, all in accordance with the provisions of the Tax Increment Law then in effect. ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 13 TABLE 2: PRIORITY PROJECTS AND ESTIMATED COSTS Project ID# Project Category/Description Estimated Cost 1. Capital Costs A. Downtown parking facilities 6,000,000 $ B. Additional parking facilities to enable densification outside of downtown 10,300,000 $ C. Transit improvements, including: a. Metro bus infrastructure (shelters, transfer points)* 2,000,000 $ b. Rail corridor improvements* 1,000,000 $ D. Alternative transportation improvements* 1,000,000 $ E. Airport improvements 1,000,000 $ F. Urban greenway/stormwater management improvements* 1,000,000 $ Subtotal 22,300,000 $ 2. Infrastructure A. Bicycle/pedestrian improvements* 1,000,000 $ B. Public street improvements including public utilities replacement, including: a. Pleasant View Road reconstruction* 10,500,000 $ b. University Avenue reconstruction (including Parmenter intersection)* 5,000,000 $ c. Terrace Avenue Phase 2 (High Point Road/Terrace Avenue intersection) 1,500,000 $ d. High Point Road reconstruction 1,500,000 $ e. Capacity Improvements on Airport Road and Century Avenue 2,500,000 $ f. Capacity Improvements for Deming Way/Highway 14 corridor* 2,500,000 $ C. Sustainable features/renewable energy systems for public infrastructure 1,500,000 $ Subtotal 26,000,000 $ 3. Real Estate Acquisition and Relocation 500,000 $ 4. Economic Development Incentives 10,000,000 $ 5. Plan Implementation and Cost Recovery 17,315,300 $ 6. Finance Charges and Interest 900,000 $ 7. Donations to other TIF Districts 8,664,726 $ 85,680,026 $ Footnotes: 1. See Map 2 for project locations. 2. Expenditures marked with an asterisk may take place within one half mile of the District boundary. TOTAL 3. All preliminary cost estimates are shown in 2015 dollars and subject to inflation and refinement as more information becomes available. The City reserves the right to increase these costs to reflect inflationary increases and other uncontrollable circumstances between 2015 and the time of construction. The City also reserves the right to increase certain project costs to the extent others are reduced or not implemented, without amending the project plan. ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 14 This page intentionally left blank ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 15 MAP 2: LOCATION OF PRIORITY PROJECTS ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 16 This page intentionally left blank ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 17 Map 3 GREENWAY IMPACT ON ECONOMIC DEVELOPMENT ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 18 SECTION VI. NON TAX REVENUES AND NON PROJECT COSTS Although the City intends to pursue grants and other funding sources to help pay for some of the project costs identified herein, the success of such efforts is hard to predict. Accordingly, the full cost attributable to District has been shown. For projects where the District would pay only a prorated share of the total cost, only the District’s share has been included. Accordingly, there are no non project costs included in this amendment. SECTION VII. ECONOMIC FEASIBILITY ANALYSIS Based on approved and ongoing development projects, general development and economic trends, and the remaining land in the District that has yet to be developed or has redevelopment potential, an additional $380 million in value increment is projected over the remaining life of the District (see Table Because it is difficult to predict the timing of development on a parcel- by-parcel basis beyond those projects already underway or in the planning stages, an average of $23.85 million in additional value increment is projected per year beginning in 2021 and through the remaining life of the District. Table 3 shows projected project expenditures over the remaining life of the District by the primary project categories. Other than those already programmed for the next two years or so, the exact timing of individual priority projects identified in Table 2 is difficult to project. Further, the District’s financial capability will change dramatically over the next few years as several outstanding bond issues are retired and increment is made available to incur new costs. Accordingly, the expenditures by project category as shown on Table 3 have been sequenced with the anticipated levels of available increment rather than by specific priority projects. As indicated on the table, additional borrowing is anticipated in 2018 and the related interest and finance costs are shown in the following years. Table 5 provides a cash flow analysis that shows the proposed spending plan is feasible. Revenues on the table include tax increment from existing development in the District plus the projected tax increment from new development (as shown in Table 4) and minus the tax increment from those properties to be subtracted per this amendment. Expenses on the table include all current outstanding obligations plus the additional project costs shown in Table 3. As shown on Table 5, the District is projected to maintain a positive cash balance at the end of every year with an ending surplus of nearly $80 million if the District were to remain open its entire statutory life. To the extent that all outstanding obligations can be retired prior to the statutory closing date following the end of the authorized spending period, the City will look to do so in order to return property in the District to the general tax rolls of all overlying taxing jurisdictions as soon as possible. ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 19 RI LE 4: PRO TABLE 3: PROJECTED NEW PRIORITY PROJECT EXPENDITURES BY YEAR Year Capital Improvements Infrastructure Real Estate Acquisition and Relocation Discretionary Payments Administrative and Professional Services Finance Charges and Interest Donations to Other Districts Total 2016 - $ - $ - $ - $ 1,956,530 $ - $ 466,667 $ 2,423,197 $ 2017 2,477,778 $ 2,888,889 $ 55,556 $ 714,286 $ 1,881,530 $ - $ 466,667 $ 8,484,705 $ 2018 2,477,778 $ 2,888,889 $ 55,556 $ 714,286 $ 1,806,530 $ - $ 466,667 $ 8,409,705 $ 2019 2,477,778 $ 2,888,889 $ 55,556 $ 714,286 $ 1,731,530 $ 450,000 $ 566,667 $ 8,884,705 $ 2020 2,477,778 $ 2,888,889 $ 55,556 $ 714,286 $ 1,656,530 $ 300,000 $ 466,667 $ 8,559,705 $ 2021-2025 12,388,889 $ 14,444,444 $ 277,778 $ 3,571,429 $ 8,282,650 $ 150,000 $ 2,333,333 $ 41,448,523 $ 2026-2030 - $ - $ - $ 3,571,429 $ - $ - $ 3,898,059 $ 7,469,488 $ TOTAL 22,300,000 $ 26,000,000 $ 500,000 $ 10,000,000 $ 17,315,300 $ 900,000 $ 8,664,726 $ 85,680,026 $ Footnotes: 1. See Table 2 for a breakout of priority projects within each spending category. 2. All preliminary cost estimates are shown in 2015 dollars and subject to inflation and refinement as more information becomes available. The City reserves the right to increase these costs to reflect inflationary increases and other uncontrollable circumstances between 2015 and the time of construction. The City also reserves the right to increase certain project costs to the extent others are reduced or not implemented, without amending the project plan. ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 20 TABLE 4: PROJECTED VALUES AND REVENUES BY YEAR Tax Year Collect/ Budget Year Cumulative Value Increment from Existing Development Projected Tax Increment from Existing Development Projected Annual Value Increment from New Development Projected Cumulative Value Increment from New Development Projected Total Tax Increment from New Development Total Value Increment - Existing & New Development TOTAL Projected Tax Increment from Existing & New Development 2015 2016 409,038,800 $ $ 8,655,261 - $ - $ - $ 409,038,800 $ 8,655,261 $ 2016 2017 411,083,994 $ $ 8,698,537 16,637,000 $ 16,637,000 $ 352,039 $ 427,720,994 $ 9,050,576 $ 2017 2018 413,139,414 $ $ 8,742,030 31,363,000 $ 48,240,000 $ 1,020,758 $ 461,379,414 $ 9,762,788 $ 2018 2019 415,205,111 $ $ 8,785,740 31,200,000 $ 79,596,000 $ 1,684,251 $ 494,801,111 $ 10,469,992 $ 2019 2020 417,281,137 $ $ 8,829,669 31,200,000 $ 110,952,000 $ 2,347,744 $ 528,233,137 $ 11,177,413 $ 2020 2021 419,367,542 $ $ 8,873,817 31,200,000 $ 142,308,000 $ 3,011,237 $ 561,675,542 $ 11,885,054 $ 2021 2022 421,464,380 $ $ 8,918,186 23,850,000 $ 166,277,250 $ 3,518,427 $ 587,741,630 $ 12,436,613 $ 2022 2023 423,571,702 $ $ 8,962,777 23,850,000 $ 190,246,500 $ 4,025,616 $ 613,818,202 $ 12,988,393 $ 2023 2024 425,689,560 $ $ 9,007,591 23,850,000 $ 214,215,750 $ 4,532,805 $ 639,905,310 $ 13,540,396 $ 2024 2025 427,818,008 $ $ 9,052,629 23,850,000 $ 238,185,000 $ 5,039,995 $ 666,003,008 $ 14,092,624 $ 2025 2026 429,957,098 $ $ 9,097,892 23,850,000 $ 262,154,250 $ 5,547,184 $ 692,111,348 $ 14,645,076 $ 2026 2027 432,106,884 $ $ 9,143,382 23,850,000 $ 286,123,500 $ 6,054,373 $ 718,230,384 $ 15,197,755 $ 2027 2028 434,267,418 $ $ 9,189,099 23,850,000 $ 310,092,750 $ 6,561,563 $ 744,360,168 $ 15,750,661 $ 2028 2029 436,438,755 $ $ 9,235,044 23,850,000 $ 334,062,000 $ 7,068,752 $ 770,500,755 $ 16,303,796 $ 2029 2030 438,620,949 $ $ 9,281,219 23,850,000 $ 358,031,250 $ 7,575,941 $ 796,652,199 $ 16,857,161 $ 2030 - 440,814,054 $ - $ 23,850,000 $ 382,000,500 $ - $ 822,814,554 $ - $ TOTAL 134,472,874 $ 380,100,000 $ 58,340,686 $ 192,813,560 $ Footnotes: 1. Existing and new cumulative values include a 0.5% annual inflation rate. 3. Current and project net mill rate = 21.16 per $1,000 of value. 2. Values are shown in the year in which the corresponding development projects will be added to the tax rolls. Tax increment from the projects is then payable beginning in the following year. ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 21 JECTED V TABLE 5: FINANCIAL FEASIBILITY Collection/Budget Year 2015 2016 2017 2018 2019 2020 2021-2025 2026-2030 Cumulative JANUARY 1 CASH AVAILABLE 3,920,436 $ 3,389,761 $ 7,065,996 $ 3,648,881 $ 5,630,901 $ 3,326,419 $ 2,393,417 $ 12,586,848 $ 3,920,436 $ ESTIMATED CASH INFLOWS Tax Increment From: Approved Existing Development 8,692,301 8,655,261 8,698,537 8,742,030 8,785,740 8,829,669 44,815,001 45,946,636 143,165,175 Projected New Development - - 352,039 1,020,758 1,684,251 2,347,744 20,128,080 32,807,813 58,340,686 Amendment # 9 Adjustment - - (1,491,771) (1,499,230) (1,506,726) (1,514,259) (7,760,579) (7,954,593) (21,727,157) Total Tax Increment 8,692,301 8,655,261 7,558,806 8,263,559 8,963,266 9,663,154 57,182,502 70,799,855 179,778,703 Other Revenue: Golf Fund 650 Advance Repayment - - - - - - 1,041,416 1,801,764 2,843,180 TID # 5 Repayment - - - - - - - 1,564,726 1,564,726 New Borrowing - - - 4,500,000 - - - - 4,500,000 Interest Income and Other Revenue 727,016 693,910 689,430 686,199 682,968 680,988 1,250,000 1,000,000 6,410,511 Total Other Revenue 727,016 693,910 689,430 5,186,199 682,968 680,988 2,291,416 4,366,490 15,318,417 Total Cash Inflows 9,419,317 9,349,171 8,248,236 13,449,758 9,646,234 10,344,142 59,473,918 75,166,345 195,097,120 Total Estimated Available Cash 13,339,753 12,738,932 15,314,231 17,098,639 15,277,135 13,670,561 61,867,334 87,753,194 199,017,556 TID #3 Cash Availability Analysis As of: 8/20/2015 2015 2016 2017 2018 2019 2020 2021-2025 2026-2030 ESTIMATED CASH OUTLAYS PY payables to be paid in Next Year - 100,000 100,000 100,000 100,000 100,000 500,000 0 MOM building demolition - Actual Costs 0 0 0 0 0 0 0 0 0 Previously Committed Expenses Prior to July 2015: Payments to Developers per City/Developer Agreements 2,604,930 1,139,223 1,076,069 959,715 973,780 994,877 2,976,563 505,573 11,230,730 2015 Approved Project Costs 3,207,728 - - - - - - - 3,207,728 2015 Administrative and Professional Services 2,031,530 - - - - - - - 2,031,530 Current Debt Service (Ends 2022) 2,105,804 2,110,517 2,104,576 2,098,319 2,092,231 1,722,563 355,400 - 12,589,410 Total Committed Expenses 9,949,992 3,249,740 3,180,645 3,058,034 3,066,011 2,717,440 3,331,963 505,573 29,059,398 Projected New Projects and Expenses: Capital Improvements - - 2,477,778 2,477,778 2,477,778 2,477,778 12,388,889 - 22,300,000 Infrastructure - - 2,888,889 2,888,889 2,888,889 2,888,889 14,444,444 - 26,000,000 Real Estate Acquisition and Relocation - 55,556 55,556 55,556 55,556 277,778 - 500,000 Economic Development Incentives - - 714,286 714,286 714,286 714,286 3,571,428.57 3,571,429 10,000,000 Plan Implementation and Cost Recovery - 1,956,530 1,881,530 1,806,530 1,731,530 1,656,530 8,282,650 - 17,315,300 Finance Charges and Interest - - - - 450,000 300,000 150,000 - 900,000 Donations to Other Districts - 466,667 466,667 466,667 566,667 466,667 2,333,333 3,898,059 8,664,726 Total Projected New Projects and Expenses - 2,423,197 8,484,705 8,409,705 8,884,705 8,559,705 41,448,523 7,469,488 85,680,026 Repayment of 2018 Principle - - - - - - 4,500,000 - 4,500,000 Total All Disbursements 9,949,992 5,672,937 11,665,350 11,467,738 11,950,715 11,277,144 49,280,486 7,975,061 119,239,424 DECEMBER 31 ESTIMATED CASH AVAILABLE 3,389,761 7,065,996 3,648,881 5,630,901 3,326,419 2,393,417 12,586,848 79,778,132 79,778,132 Footnotes: Table prepared by City of Middleton Finance Department. ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 22 SECTION VIII. CONSISTENCY OF ACTIVITIES WITHIN TAX INCREMENT DISTRICT #3 WITH THE CITY ZONING ORDINANCE, MASTER PLAN AND OTHER DEVELOPMENT ORDINANCES No change has been made to this section in this amendment. SECTION IX. STATEMENT ON RELOCATION No change has been made to this section in this amendment. ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 23 APPENDIX A: METHODOLOGY FOR DETERMINING THE BASE VALUE OF SUBTRACTED PROPERTIES ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 24 APPENDIX A: METHODOLOGY FOR DETERMINING THE BASE VALUE OF SUBTRACTED PROPERTIES The current values of the parcels proposed to be subtracted from TID #3 in Amendment No. 9 were obtained by electronic means from Dane County. However, the process for calculating the 1993 base values for select 2015 TID #3 subtraction parcels – based on their current boundaries – involved the translation of paper-based maps and tables into an electronic format. The remarkable success of new development activities taking place in the District since its inception has included a number of subdivisions, plats, and issuance of new tax identification numbers that, in some instances, proved difficult to track in their entirety based on gaps in information available from historic records – both at the time of the District’s establishment in 1993, as well as the numerous boundary amendments and reconfigurations of constituents parcels in the intervening years. The following is a detailed accounting of the methods undertaken by Vandewalle & Associates to compare current subtraction parcel information with 1993 hard-copy data to the greatest extent possible. Where appropriate, the base values of parcels to be removed have been prorated as a percentage of current acreage to its parent parcel(s), and/or estimated in a manner that is reasonably consistent with surrounding parcels (where data is unavailable or incomplete). 1. Gathered 2015 (Access Dane) and 1993 parcel values (paper records furnished by City of Middleton and the Department of Revenue). 2. Acquired acreages of 2015 TID #3 parcels of interest from Dane County GIS: DCI Maps. 3. Using DCI Maps 2015 parcel information, 1995 Ortho data, and 1993 parcel map information, outlined and calculated the total acreage of original parent parcel(s) in 1993. 4. Divided the total acreage of the 2015 subtraction parcel by the total acreage of its 1993 parent parcel(s) and calculated the prorate percentage. 5. Multiplied the prorate percentage by the total base value of each 1993 parent parcel yielding base value figures for each 2015 subtraction parcel As noted on Table A.1. (which is the same as Table 1 in Section I of the plan document), complicating factors also necessitated special base value calculations for several subtraction parcels: 1. A portion of the 1993 parent parcel of 2015 Parcels R/S was dedicated for public right of way. The base value of this parcel has been adjusted to reflect previously removed value increment (as a function of current acreage of the two 2015 parcels vs. the entire 1993 parent parcel). 2. Parcel T consists of twelve parent parcels from 1993, for which hard-copy base value data is incomplete. However, review of parent parcel records available on Access Dane revealed a high likelihood that four of these parcels, while included in the District at the time of its creation, were exempt and have a base value of zero (owned, as they were, by a local church that has since reconfigured its parking areas and outlots in the vicinity). The listed 1993 Base ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 25 Value Total is comprised of known values for eight parcels, including one duplex parcel that has been split, and the remaining four parcels assigned a base value of zero. While the current parcels (comprised of 18 single family-homes) have been subdivided and reconfigured since 1993, the total acreage of the area to be subtracted remains substantially the same, allowing for a reasonable comparison between the two years. Table A.2. provides a correlation of the 1993 parcel numbers with the current 2015 parcel numbers. For more detailed information concerning this methodology, please contact: Scott Harrington, AICP, Principal Planner Vandewalle & Associates 120 E. Lakeside St. Madison, WI 53715 [PHONE REDACTED] [EMAIL REDACTED] ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 26 TABLE A.1.: PARCELS FOR REDUCTION ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 27 TABLE A.2.: PARCEL NUMBER COMPARISON ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 28 This page intentionally left blank ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 29 MAP A.3.: TID #3 BOUNDARY COMPARISON ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 30 This page intentionally left blank ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 31 APPENDIX B: LEGAL DESCRIPTION ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 32 APPENDIX B: LEGAL DESCRIPTION The previously described boundary of TID #3 excluding the areas described as follows: Parcel A - Lot 18 of the Airport Road Business Park Plat. Parcel B - Lot 1 of Certified Survey Map number 7335 recorded in volume 37 of CSM’s pages 244-246 as document number 2562148 at the Dane County Register of Deeds. Parcel C - Lot 10 of the First Addition to Evergreen Industrial Plat. Parcel D - Lot 11 of the First Addition to Evergreen Industrial Plat. Parcel E - Lot 1 of Certified Survey Map number 8164 recorded in volume 44 of CSM’s pages 20-22 as document number 2748574 at the Dane County Register of Deeds. Parcel F - Lot 1 of Certified Survey Map number 11691 recorded in volume 71 of CSM’s pages 257-260 as document number 4167178 at the Dane County Register of Deeds. Parcel G - Lot 2 of Certified Survey Map number 11691 recorded in volume 71 of CSM’s pages 257-260 as document number 4167178 at the Dane County Register of Deeds. Parcel H - Lot 3 of Certified Survey Map number 11691 recorded in volume 71 of CSM’s pages 257-260 as document number 4167178 at the Dane County Register of Deeds. Parcel I - Lot 2 of Certified Survey Map number 11037 recorded in volume 66 of CSM’s pages 159-162 as document number 3898368 at the Dane County Register of Deeds. Parcel J - Lot 3 of Certified Survey Map number 11023 recorded in volume 66 of CSM’s pages 117-120 as document number 3893053 at the Dane County Register of Deeds. Parcel K - Lot 1 of Certified Survey Map number 11175 recorded in volume 67 of CSM’s pages 194-199 as document number 3967777 at the Dane County Register of Deeds. Parcel L - Lot 4 of Certified Survey Map number 11085 recorded in volume 66 of CSM’s pages 300-305 as document number 3920490 at the Dane County Register of Deeds. Parcel M - Lot 1 of the Greenway Station Plat. Parcel N - Part of Lot 3 of Certified Survey Map number 7646 recorded in volume 40 of CSM’s pages 32-35 as document number 2642934 at the Dane County Register of Deeds, located in the SE1/4 of the SE1/4 of Section 10, Township 7 North, Range 8 East, City of Middleton, Dane County, Wisconsin more fully described as follows: Beginning at the most easterly corner of said Lot 3; Thence South 23°26’08” West, 271.56 feet; Thence South 88°58’00” West, 180.00 feet; Thence South 01°02’00” East, 20.00 feet; Thence South 88°58’00” West, 160.24 feet; Thence North 01°02’00” West, 223.87 feet; Thence North 45°06’20” East, 148.85 feet; Thence South 81°12’17” East, 350.54 feet to the point of beginning. ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 33 Parcel O - All of the Valencia Lofts Condominium Plat recorded in volume 4-013B of Condo Plats, pages 1-4 as document number 3568022 at the Dane County Register of Deeds. Parcel P - Lot 1 of Certified Survey Map number 10417 recorded in volume 61 of CSM’s pages 239-241 as document number 3496705 at the Dane County Register of Deeds. Parcel Q - Lot 1 of Certified Survey Map number 10377 recorded in volume 61 of CSM’s pages 122-125 as document number 3480333 at the Dane County Register of Deeds. Parcel R - Lot 2 of Certified Survey Map number 10377 recorded in volume 61 of CSM’s pages 122-125 as document number 3480333 at the Dane County Register of Deeds. Parcel S - Lot 1 of Certified Survey Map number 12346 recorded in volume 76 of CSM’s pages 298-299 as document number 4382191 at the Dane County Register of Deeds. Parcel T - Lot 4, Block 4 of the Middleton Station Plat, EXCEPT the west 8 feet thereof. Also, Lot 1 of Certified Survey Map number 9385 recorded in volume 53 of CSM’s pages 180-181 as document number 3137820 at the Dane County Register of Deeds. Also, Lot 2 of Certified Survey Map number 9385 recorded in volume 53 of CSM’s pages 180-181 as document number 3137820 at the Dane County Register of Deeds. Also, A parcel of land consisting of a westerly portion of Lot 1 and an easterly portion of the vacated Bristol Street right-of-way in Murray’s Subdivision of Outlots number 9 and 10 in Middleton Station, City of Middleton, Dane County, Wisconsin more particularly described as follows: Commencing at the Northeast corner of Lot 1 of said Murray’s Subdivision; Thence South 88°27’00” West, 57.75 feet along the South right-of-way line of Hubbard Avenue to the point of beginning; Thence South 1°37’00” West, 136.00 feet; Thence South 88°26’50” West, 73.67 feet; Thence North 1°35’00” East, 136.00 feet to the South right-of-way line of Hubbard Avenue; Thence North 88°27’00” East, 73.75 feet along said right-of-way line to the point of beginning. Also, Part of the East 1/2 of Lot one Murray’s Subdivision of Outlots 9 and 10 in Middleton Station, in the City of Middleton, Dane County, Wisconsin; more fully described as follows: Beginning at the Northeast corner of Lot 1 of said Murray’s Subdivision; Thence South 88°27’00” West, 57.75 feet along the South line of Hubbard Street; Thence South 1°37’00” West, 136.00 feet; Thence North 88°26’50” East, 57.67 feet; Thence North 1°39’00” East, along the East line of said Lot 1, 136.00 feet to the point of beginning. Also, Lot 4 of Certified Survey Map number 6122 recorded in volume 29 of CSM’s pages 188-190 as document number 2204561 at the Dane County Register of Deeds. Also, Lot 2 of Certified Survey Map number 6122 recorded in volume 29 of CSM’s pages 188-190 as document number 2204561 at the Dane County Register of Deeds. ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 34 Also, Lot 1 of Sara’s Addition Plat. Also, Lot 2 of Sara’s Addition Plat. Also, Lot 3 of Sara’s Addition Plat. Also, Lot 4 of Sara’s Addition Plat. Also, Lot 5 of Sara’s Addition Plat. Also, Lot 6 of Sara’s Addition Plat. Also, Lot 7 of Sara’s Addition Plat. Also, Lot 8 of Sara’s Addition Plat. Also, Lot 9 of Sara’s Addition Plat. Also, Lot 10 of Sara’s Addition Plat. Also, Lot 11 of Sara’s Addition Plat. ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 35 APPENDIX C: LETTERS TO TAXING JURISDICTIONS ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- Publish in newspaper Publish on August 6 and August 13, 2015 PUBLIC NOTICE CITY OF MIDDLETON TO WHOM IT MAY CONCERN: The City of Middleton Plan Commission will hold a Public Hearing at 7:00 pm, Tuesday, August 25, 2015, at City Hall, 7426 Hubbard Avenue, Middleton, Wisconsin, on proposed Project Plan Amendment No. 9 for the City of Middleton Tax Increment Finance District #3 (TID The purpose of the Amendment is to subtract properties from the boundary as well as add approximately $120 million in eligible project costs. These costs may include capital costs; infrastructure; real estate acquisition and relocation; administrative and professional services; finance charges and interest; and donations to other TIF districts. Proposed project costs identified in the amended Project Plan also include discretionary payments and other cash grants that may be provided by the City to owners, lessees or developers of property within TID pursuant to Wis. Stat. § 66.1105. A copy of the proposed TID #3 Project Plan Amendment No. 9 is available and will be provided upon request at the City Clerk’s Office at City Hall during regular business hours, 7:45 am to 4:30 pm, Monday through Friday. At the Public Hearing interested parties will be afforded a reasonable opportunity to express their views on the proposed Project Plan amendment. Lorie Burns City Clerk ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 42 This page intentionally left blank ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 43 APPENDIX D: PROOFS OF PUBLICATION FOR PLAN COMMISSION HEARING AND JOINT REVIEW BOARD MEETINGS ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 47 APPENDIX E: PLAN COMMISSION PUBLIC HEARING MINUTES AND RESOLUTION APPROVING AMENDMENT NO. 9 PROJECT PLAN ---PAGE BREAK--- G:\Data\Admin\AD2015\Commit\PC\08-25minPC.doc 1 of 3 9/23/2015 MINUTES MIDDLETON PLAN COMMISSION TUESDAY AUGUST 25, 2015 7:00 P.M. PRESENT: Sonnentag, Hilbert, Elskamp, Hubbard, Dorn, Wexler ABSENT: Zellers ALSO PRESENT: Kelley, Opitz, Attoun Chair Sonnentag called the meeting to order at 7:02 p.m. 1. Minutes of 8-11-15 Moved by Wexler, seconded by Hubbard, to approve the minutes of 8-11-15. Motion carried 6-0. 2. Public Hearing – Tax Increment Financing District #3 (TID Amendment #9 (PC 1234i) Chair Sonnentag opened the public hearing at 7:03 p.m. Kelley provided a brief summary of Amendment #9 to Tax Increment Financing District which includes the subtraction of parcels with a total value increment of $70.5 million and proposed new expenditures of $84.8 million for numerous public improvements, development incentives, administration and cost recovery, and donations to other districts. The estimated additional value from the proposed additional spending is $380 million. Chair Sonnentag closed the public hearing at 7:06 p.m. 3. Recommendation on Tax Increment Financing District #3 (TID Amendment #9 (PC 1234i), Resolution 2015-45 Moved by Wexler, seconded by Dorn, to approve Resolution 2015-45, approving Project Plan Amendment #9 to Tax Increment Financing District #3 and recommending approval to the Common Council. There was no further discussion and the motion carried 6-0. 4. Specific Implementation Plan (SIP) Modification for Addition – Plaza 14 Development, 8301- 8303-8307-8309 Murphy Dr. (PC 2340) Following discussion, moved by Hilbert, seconded by Dorn, to approve the Specific Implementation Plan modification as a minor modification contingent on: construction of the 5’ sidewalk along the northern edge of the property prior to a certificate of occupancy being issued; resolution of engineering staff comments dated 8/13/15; and tenant façade signage to be approved at a future meeting. Motion carried 6-0. 5. Specific Implementation Plan (SIP) Modification for Garage – Petersburg, 8787 Evergreen Rd. (PC 1886a) Moved by Hubbard, seconded by Dorn, to approve the garage placement as a minor Specific Implementation Plan modification contingent on the building being shifted a minimum of 1.5 ft. to the east so that the eaves and gutter do not extend across the lot line, and contingent on resolution of any staff comments. Motion carried 6-0. ---PAGE BREAK--- PLAN COMMISSION MINUTES AUGUST 25, 2015 2 of 3 9/23/2015 6. Specific Implementation Plan (SIP) Modification for Deck – WTS Paradigm, 1850 Deming Way (PC 2415) Moved by Dorn, seconded by Elskamp, to approve the deck as a minor Specific Implementation Plan modification. Motion carried 6-0. 7. Specific Implementation Plan (SIP) Modification for an Overhead Door & Canopy - Welton Enterprises/Nedrebos, 8475 Murphy Dr. (PC 2460) Following discussion, moved by Wexler, seconded by Hilbert, to approve the changes as a minor Specific Implementation Plan modification, contingent on resolution of staff comments and on additional landscaping being provided along the property line adjacent to USH 14. Motion carried 6-0. 8. Design Review – Firefighters Memorial Park Indoor Batting Facility, 3201 Pleasant View Rd. (PC 2085) Plan Commission members discussed the proposed indoor batting facility with Mike Hinz, representing the Middleton Baseball & Softball Commission. Dorn asked if there could be details added to the exterior to dress up the building to better match the improvements that have already been made to the park. Hubbard said he understands the budget concerns but it would be nice if some architectural elements could be added. Suggestions for possible changes include different color bands or different materials, or possibly enhanced landscaping around the building. Moved by Dorn to defer this item and request alternative exterior treatments be submitted. Motion failed for lack of a second. Moved by Hubbard, seconded by Elskamp, to grant concept approval to the project and request that alternative elevations and exterior treatments be submitted, and/or landscaping and screening. Motion carried 6-0. 9. Concept Review – Tax Increment Financing District #3 (TID Request for Assistance and Concept Review, Parking and Other Improvements, Pharmaceutical Product Development (PPD), 8551 Research Way, and Vanta Commercial Properties (PC 2453) Moved by Hilbert, seconded by Wexler, to recommend conceptual approval to the Common Council for Tax Increment Financing District #3 (TID assistance for Pharmaceutical Product Development (PPD), and Vanta Commercial Properties, 8551 Research Way. Motion carried 6-0. 10. Set a Public Hearing – Request for Rezoning from Planned Development District – Specific Implementation Plan (PDD-SIP) to an Amended Planned Development District – General Implementation Plan (PDD-GIP) – Middleton Center/T. Wall Enterprises and Knothe & Bruce Architects on behalf of Uptown Middleton, LLC (PC 2451) Moved by Wexler, seconded by Hilbert, to set Tuesday, September 22, 2015 at 7:15 p.m. as a public hearing to consider this request. Motion carried 6-0. ---PAGE BREAK--- PLAN COMMISSION MINUTES AUGUST 25, 2015 3 of 3 9/23/2015 11. Discussion on Comprehensive Plan Update (PC 2437) Attoun provided a summary of proposed revisions to the Housing element of the plan to incorporate public input obtained, workforce housing strategy recommendations, and an enhanced focus on sustainability. Commission members discussed the small lot concept and requested information from other communities on how to encourage smaller homes on smaller lots which will do more to encourage housing affordability. No action was necessary. Moved by Wexler, seconded by Hilbert, to adjourn at 8:12 p.m. Motion carried 6-0. EILEEN KELLEY Note: These minutes were prepared by Eileen Kelley, Planning Director & Zoning Administrator. These minutes are based on the notes of the recorder and are subject to change at a subsequent meeting. ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 53 APPENDIX F: CITY COUNCIL RESOLUTION APPROVING TID AMENDMENT NO. 9 PROJECT PLAN ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 56 This page intentionally left blank ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 57 APPENDIX G: JOINT REVIEW BOARD MINUTES, REPORTS, AND RESOLUTION ON TID AMENDMENT NO. 9 ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- JOINT REVIEW BOARD TAX INCREMENTAL DISTRICT NO. 3 (TID AMENDMENT NO. 9 CITY OF MIDDLETON INFORMATION AND PROJECTIONS Wisconsin state law requires that certain information and projections be provided to the Joint Review Board. The contents are listed in Wis. Stat. § 66.1105(4m)(c)(1). The local legislative body shall provide the joint review board with the following information and projections: 1. The specific items that constitute the project costs, the total dollar amount of these project costs to be paid with the tax increments, and the amount of tax increments to be generated over the life of the tax incremental district. Response: Amendment No. 9 refines the list of projects and project costs found in the original TID #3 project plan (adopted in 1993), in Amendment No. 3 (adopted March 2002), and Amendment No. 7 (adopted September 2011) in addition to adding new projects. These improvements include, but are not limited to: stormwater and water quality management projects; vehicular, bike and pedestrian improvements; economic development and business recruitment participation; and downtown improvements such as parking and transit improvements. Altogether, the City proposes to undertake $85,680,026 in additional project costs under Amendment No. 9 (to be incurred by 2025). When these are added to previous expenditures, outstanding debt and existing commitments under pay-as-you-go agreements with developers, the total level of disbursements over the full life of the District will be $178,235,626, or $64,821,626 more than previously authorized. Assuming a rate of growth comparable to that of the District to date, TID #3 could see as much as $380 million in new value increment within its remaining life, generating an additional $58.3 million of new tax increment revenues by 2030. The City will carefully monitor additional tax increment revenues and proposed project costs that will be paid by actual collection of tax increment revenues. 2. The amount of the value increment when the project costs in subd. 1 are paid in full and the tax incremental district is terminated. ---PAGE BREAK--- Response: TID #3 had an equalized value increment of $409,038,800 as of January 1, 2015. The total value increment from existing and new development at the time of the District’s expected retirement in 2030 is projected at $822,814,554 even with the proposed subtraction of $70.5 million in value increment (see assumptions of Table 4 in the amended Project Plan). 3. The reasons why the project costs in subd. 1 may not or should not be paid by the owners of property that benefit by improvements within the tax incremental district. Response: As described in the project plan amendment, the City has identified a number of additional projects that are necessary to facilitate and induce additional development. As has been the case in the past, the extent and timing of additional development would not occur but for the use of tax increment finance assistance. Accordingly, the City will continue to responsibly use TID #3 tax revenues to encourage and expand business, create new jobs, use sustainable methods for redevelopment, and continue with stormwater and water quality management practices, all of which benefit the entire region and continue to make Middleton a business leader in the region. Given the success of attracting additional development to date, the City has determined the tax increment from 20 parcels totaling $70.5 million in value to be surplus over and above that necessary to undertake the additional proposed projects. Per 2011 Wisconsin Act 139, the City has chosen to use one of its four additional boundary amendments to subtract these parcels from the District and bring the $70.5 million of value increment onto the general tax rolls to the benefit of taxing jurisdictions. With this amendment, the total value of properties placed back on the general tax rolls through four subtractions (2006, 2009, 2011, and 2015) is approximately $340 million. To offset the impacts of the slow economic recovery and local levy limitations imposed by the state, the proposed subtraction will provide general tax relief to taxpayers in all of the overlying jurisdictions. Even with this significant subtraction, the updated cash flow in Amendment No. 9, still projects retirement of the District within the statutorily-allowed time frame (2030) with a sizeable fund balance and with all project costs committed by 2025, as required by law. 4. The share of the projected tax increments in subd. 1 estimated to be paid by the owners of taxable property in each of the taxing jurisdictions overlying the tax incremental district. ---PAGE BREAK--- Response: As of January 1, 2015, the total equalized value of TID #3 was $472,440,600 and the total value increment was $409,038,800. Following the parcel value subtraction in Amendment No. 9, and assuming that the District will remain open until 2030 and that future development occurs within the District as projected, it is possible that TID #3 could generate up to $192,813,560 in total 2016-2030 tax incremental revenue collections from both new and existing development. The share of project tax increments estimated to be paid by the owners of taxable property in each of the taxing jurisdictions is estimated as follows: State of Wisconsin 0.81% $1,567,775 Dane County 14.97% $28,857,389 City of Middleton 31.52% $60,775,410 Madison Area Technical College 4.44% $8,569,770 Middleton/Cross Plains School District 48.26% $93,043,217 (Discrepancies may occur due to rounding) 5. The benefits that the owners of taxable property in the overlying taxing jurisdictions will receive to compensate them for their share of the project tax increments in subd. 4. Response: The long-term benefits to not only the City of Middleton residents but those in the overlying taxing jurisdictions have been evident since the creation of TID #3 in 1993. Over 4,000 jobs have been created (with many more on the way with projects already approved), and more than $600,000,000 of new tax base has been added inclusive of development value previously subtracted from the District on three occasions. The implementation of stormwater and water quality management projects has significantly enhanced the areas in TID #3 as well as into Lake Mendota and further. Blight elimination through redevelopment and appropriate new development affects the entire community and region. Lastly, subtracting an additional $70.5 million of value and putting it back on the general tax rolls will bring immediate and direct economic relief to all owners of taxable property in the overlying taxing jurisdictions. This single benefit alone fulfills the spirit of the tax incremental law. ---PAGE BREAK--- JOINT REVIEW BOARD TAX INCREMENTAL DISTRICT NO. 3 (TID AMENDMENT NO. 9 CITY OF MIDDLETON DECISION CRITERIA Under the Wisconsin Statutes, Joint Review Boards must base their decision to approve or deny a proposed tax incremental district plan and boundary designation on the following criteria: A. Whether the development expected in the tax incremental district would occur without the use of tax incremental financing; B. Whether the economic benefits of the tax incremental district, as measured by increased employment, business and personal income and property value are sufficient to compensate for the cost of improvements; and C. Whether the benefits of the proposal outweigh the anticipated tax increments to be paid by the owners of property in the overlying tax districts. This report has been prepared to address those criteria by providing some information and data on the impact of TID Amendment No. 9, in the City of Middleton. The criteria are addressed in turn below. A. TID #3 was created for multiple purposes which included, but were not limited to: job creation (living wage jobs); tax base creation; diversifying the tax base from higher percentages of residential to more commercial and industrial/business; development compliant with City standards of under- utilized properties through stormwater and water quality management projects; controlling the aesthetics of the properties along the Highway 12 corridor; providing services for appropriate development; business recruitment; and enhancing land use patterns and relocating inappropriate land uses to further enhance development of abutting properties. To date, the District has been an unqualified success with both the extent and speed of growth far exceeding those of the City and the region as a whole, which would not have occurred but for the use of tax increment assistance and will, likewise, not continue as projected without such assistance. B. The economic benefits of creating TID #3 have been numerous and benefit not only the City of Middleton but also all of the overlying taxing jurisdictions as well. The amount of revenue generated from increased employment and income taxes as well as increases in property values are sufficient to ---PAGE BREAK--- compensate for the project expenditures and debt service associated with borrowing for those project costs but only through the use of tax incremental financing. As the City has demonstrated since creation of TID #3 in 1993, these substantial project costs can be properly retired through the judicious use of tax increment financing. C. Amendment of TID #3 to subtract an additional $70.5 million of value and placing it on the general tax rolls of all underlying taxing jurisdictions is an immediate and direct benefit to all affected property owners. Under current tax rates, $1.5 million annually will flow to all of the jurisdictions from this subtraction providing tax relief to all property owners within them. Continuation of projects undertaken within TID #3 also will have additional far reaching impacts on all property owners by facilitating additional development and providing benefits such as improved infrastructure, environmental protection, job creation, quality housing, and enhanced amenities that, over the long run, will far outweigh the anticipated increments to be paid by owners of property in the overlying taxing districts ---PAGE BREAK--- ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 66 This page intentionally left blank ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 67 APPENDIX H: CITY ATTORNEY OPINION LETTER ---PAGE BREAK--- ot. ! 33 Ecst lYcin Street : suite 5oo i lYodiron, Wl 53703-3095 Moiling Address: P,O. Box 2038 Modison, Wl 53701-2038 Phone: [PHONE REDACTED] Fox: 608 257,2508 MotthewJ. Fleming Direct Line [PHONE REDACTED] Focsimile 608.257 .4333 mfl eming@ 1 October 2015 VIA E-MAIL and U.S. MAIL Mayor Kufi J. Sonnentag and Middleton Common Council City of Middleton 7426Hubbard Avenue Middleton, W 53562 City of Middleton Tax Increment District No. 3 Project Plan Amendment No. 9 Dear Mayor Sonnentag: As requested, we have acted as counsel to the City of Middleton, a Wisconsin municipal corporation, in connection with the adoption of Amendment No. 9 to the Middleton Tax Increment District No. 3, a'Wisconsin Tax Increment District created in 1993 pursuantto Wis. Stats. 1991 $ 66.46. In our capacity as counsel to the City of Middleton, we have examined originals (or copies identified to our satisfaction as identical to the originals) of the following documents: Amendment No. 9 to Project Plan for Tax Increment District No.3, as dated August 27,2015; Notice of Public Hearing relating to adoption of the said Amendment No. 9; Minutes of Middleton Plan Commission dated August 25, 2015 related to said public hearing; Resolution No. 2015-45 of the Middleton Plan Commission relating to approval of the said Amendment No. 9; Resolution No. 20Il-46 of the Middleton Common Council relating to approval of said Amendment No. 9; Re: 1 ) aJ. 4 5 lYcdison I jcnesville ---PAGE BREAK--- Mayor Kurt J. Sonnentag 1 October 2015 Page2 Notices to Chief Executive Officers or administrators of all local governmental entities having power to levy taxes on property within the said Tax Increment District No. 9; Minutes of the meetings of Joint Review Board relating to the said Amendment No. 9 dated August 25, 2015 and September 16, 2015; Resolution No. 2015-47 of the Joint Review Board approving said Amendment No. 9. Based upon the foregoing, and pursuant to Wis. Stats. 2009-2010 S 66.1 105(4)(f), it is our opinion that the Project Plan for Tax Increment District No. 3, as revised by Amendment No. 9 to said Project Plan, is complete and complies with Wis. Stats. 2009-2010 $ 66.110s(4XÐ. We render no opinion with regard to the accuracy, validity or sufficiency of any statements and/or findings contained in the said Amendment No. 9, since these were prepared by City staff and consultants rather than by our office. Sincerely, Matthew J. Fleming MJF:daz 200738 Amd No. 9 Opinion lt cc: Mr,MichaelK.Davis,[EMAIL REDACTED] Ms. Eileen Kelley, [EMAIL REDACTED],us Ms. Susan Hoeft, [EMAIL REDACTED] 4839-7610-2441,v. I 6 7 I ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 70 This page intentionally left blank ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 71 APPENDIX I: IMPACT ON OVERLYING TAXING JURISDICTIONS ---PAGE BREAK--- City of Middleton TID #3 Amendment No. 9 DOR Submittal Page 72 Current Base Value: $63,401,800 Base Value of Subtracted Parcels: $2,749,842 Revised Base Value: $60,651,958 Value Increment of Subtracted Parcels: $70,499,558 Projected Total Value Increment: $822,814,554 (At district closure in 2030) Projected Total Tax Increment $192,813,560 (From 2016 to closure in 2030) Taxes Collected Taxes to be Total Tax Increment Annual Taxes Increase in Annual on Revised Collected on Collected by the Collected After Taxes Collected % of Mill Rate Base Value Subtracted ParcelsTID Over Remaining TID Closure After TID Closure Taxing Jurisdiction 2014 Tax Rate by Jurisdiction by Jurisdiction by Jurisdiction Life of the District by Jurisdiction by Jurisdiction Dane County 3.3 15.09% $200,151 $232,649 $29,093,953 $2,715,288 $2,515,137 City of Middleton 6.95 31.78% $421,531 $489,972 $61,273,628 $5,718,561 $5,297,030 Madison Area Technical College 0.98 4.48% $59,439 $69,090 $8,640,022 $806,358 $746,919 Middleton/Cross Plains School District 10.64 48.65% $645,337 $750,115 $93,805,957 $8,754,747 $8,109,410 Total 21.87 100% $1,326,458 $1,541,825 $192,813,560 $17,994,954 $16,668,496 Footnotes: All values are equalized values as January 1, 2015. APPENDIX I: IMPACT ON OVERLYING TAXING JURISDICTIONS