“This is it.”
Steve Sobiek’s words, just before Monday’s meeting of the Joint Review Board, summed up the importance of the decision made during the 5-minute meeting — to approve the creation of a tax increment financing district in Portage full of long-empty storefronts, including the former Kmart and Fashion Bug sites.
For all practical purposes, it’s a done deal, said Sobiek, the city’s director of business development and planning and a citizen representative on the Joint Review Board. Other members represent taxing bodies within the Portage city limits — Columbia County, the Portage Community School District and Madison Area Technical College.
All that needs to happen is certification from the Wisconsin Department of Revenue.
“You should never assume the state will approve it,” Sobiek said. “But it would be highly unlikely that they wouldn’t.”
Effective Jan. 1, with the revenue department’s concurrence, the 13-acre trapezoidal parcel near the north end of New Pinery Road will be designated as a “blighted” TIF district.
Lynn Holdings LLC proposes renovating the existing buildings, and constructing two more, to add an estimated $4.3 million to the property value.
Depending on how much the value actually increases, and when, developer Richard Lynn and partner Jason Adamany could reap up to $685,000 over the 27-year maximum life of the TIF district, to reimburse some of their upfront costs for renovation and construction.
With Monday’s Joint Review Board decision, Lynn said, the development is expected to happen rapidly.
By January, he said he expects to announce the name of the new occupant for the 86,000-square-foot structure that housed Kmart until the store closed in 2014.
That business should open by next spring, Lynn said.
Lynn and Adamany still are working to land multiple tenants for the building that housed Fashion Bug until it closed in 2013, and for two new buildings he plans to construct on the site — one near the Aldi grocery store, the other behind the former Fashion Bug location.
“We have several interesting prospects for those buildings,” Lynn said. “It’s going to be a great year.”
The 27-year maximum life of the TIF district — District No. 10 — is established by state law.
But Jon Cameron of the Waukesha-based Ehlers consulting firm has predicted that, if development proceeds as planned, the district will generate increased revenue sufficient to cover the city’s costs by 2030, well ahead of the 27-year lifespan.
Because the district is set up on a “pay as you go” basis, Lynn Holdings can reap some of the proceeds stemming from the area’s increased value, but only if the value actually increases due to development.
Lynn said he can soon tell prospective occupants of the site that the tax increments will be available to help recover some development costs.
The district takes effect Jan. 1, but its lifespan is calculated as beginning Oct. 11, the day the Portage Common Council adopted a resolution to create the district.
Sobiek said the Department of Revenue’s certification should come through by early January.