Tax Increment Financing/Downtown Incentive Grant Program – Frequently Asked Questions:
What is Tax Increment Financing (TIF)? The TIF process allows a municipality to pay for public improvements and other eligible costs within a designated area, called a tax incremental district (TID), using the future taxes collected on the TID’s increased property value to repay the cost of the improvements. The rationale behind TIF is that the public investment will promote private development, jobs, and tax base growth that would not otherwise occur absent the TID. Whitefish Bay has two TIDs. TID #1 is the Silver Spring District and TID #2 is the Beaumont Place/Public Parking garage development.
What is TID Fund Balance? TID Fund Balance is the accumulation of dollars that are generated in a TID as a result of the growth in assessed value within a specific TID that occurs after a TID is created.
What is the current Fund Balance in TID #1? The current available balance is approximately $814,000 and is projected to grow to $4 million by 2031, which is the last allowable year for TID #1 to remain open. Despite a mandatory termination date of October, 2030, TID #1 has an expenditure period that ends in October of 2025. Therefore, financial commitments must be made by October of 2025 for spending to take place between then and October of 2030.
Are TID #1 Funds able to be used to pay for general Village operations? No, the TID #1 Fund Balance may only be utilized for costs that directly relate to improving/revitalizing the Silver Spring District. One recent example of an allowable expense was the Consaul Commons project.
What happens to any unspent Fund Balance when the TID closes? The Village has exclusive control of the funds while the TID is open but the majority of unspent funds at the time of TID closure would be distributed to other taxing jurisdictions.
What is the Downtown Incentive Grant Program? The program is a discretionary grant program that qualifies as an eligible TID activity because it incentivizes private sector investments for projects in the Silver Spring Business District that otherwise may not occur and achieve one or more of the following:
- Create engaging spaces, encourage social spaces, and promote pedestrian activity through upgrades to storefronts, façades and streetscape features.
- Attract new businesses and encourage business development that improve the district’s retail mix and commercial density through building expansions or interior renovations.
- Improve accessibility through building and/or site improvements that bring properties up to code for ADA accessibility standards.
- Improve the roofscape of the district through rooftop build-outs and improvements that can create occupiable spaces.
Is the Downtown Incentive Grant Program funded with tax dollars? The program is not funded by the Village’s general property tax revenues. Grants are funded with TID #1 Fund Balance. Current taxpayers do not bear the burden of grant payments because the fund balance exists as a result of the new tax base that has been generated since the TID’s creation.
Does the Village Board review grant requests? Due to its oversight authority in TID #1, the seven member Community Development Authority (CDA) is responsible for reviewing grant requests on a case-by-case basis. Any grant award recommendations that exceed $50,000 require final review by the Village Board.
Is the Downtown Incentive Grant Program discretionary? Yes, the program is fully discretionary. Applications are reviewed on a case-by-case basis. The CDA has the authority to approve a lesser amount than requested or to fully deny a Grant Application. In line with the general basis for TIF, the CDA reviews each request from a “but for” perspective. In other words, the CDA strives to affirm that a specific project would not happen “but for” the inclusion of grant funds.
How many grants have been awarded in the Silver Spring District? Since 2017, 11 grants have been awarded to incentive projects that have resulted in new construction, building repairs/renovations, fire prevention enhancements, tenant space buildouts, restaurant kitchen infrastructure and outdoor seating areas.
Are grant funds paid upfront? No, funds are disbursed after all required work has been completed and applicants have provided proof of payment for materials, contractor expenses, etc. In addition, each grant award is subject to a grant agreement prepared by the Village Attorney. Such agreements routinely contain guarantees (increased assessed value, additional tax revenue, etc.) that if not met, require grant recipients to repay funds to the Village.