Development News for Salem Lakes, Wisconsin

TIF and TID Explained: Mechanisms, Types, and 'But For' Test for Development

The presentation provided a detailed overview of Tax Increment Financing (TIF) and Tax Increment Districts (TID) in Wisconsin, explaining their purpose as economic development tools. It covered the distinction between TID (geographic area) and TIF (financing tool), the creation process, the types of TIDs (mixed-use, industrial, blighted, conservation, environmental remediation, and the new residential TID), eligible project costs, financing methods (municipally funded vs. pay-as-you-go), amendment procedures, and closure conditions. The "but for" test and the role of the Joint Review Board were emphasized as crucial for TIF justification. A specific analysis of the "Brener Fields" development's request for $8.7 million in TIF assistance on a pay-as-you-go basis was presented, indicating that without TIF, the project's internal rate of return would be insufficient (6.97%) compared to the acceptable range (11-18%), thus necessitating the TIF to make the project feasible.