Plan Commission votes to recommend blighted TID creation

By Sarah Nigbor

ELLSWORTH – “We know there needs to be more housing, but does it have to be right there?”

This was the general consensus from people who live near the former Ellsworth Junior High at 254 S. Chestnut St. Multiple neighbors attending the June 18 Ellsworth Plan Commission meeting were worried their neighborhood will change drastically, and not for the better, when the building is torn down and the site is redeveloped.

The Plan Commission ultimately voted to recommend a resolution to the village board establishing the boundaries and approving the project plan for new Tax Incremental District 12. The new TID includes the three parcels, roughly 2.43 acres, that the dilapidated building calls home in Ellsworth’s Dunbars Addition.

Village President Becky Beissel made it clear that no developers or development plan are up for consideration yet. Creating a TID is step one of a lengthy process, one that will hopefully keep taxpayers from shouldering the burden of paying for the junior high demolition.

Senior Municipal Advisor Sean Lentz from Ehlers Public Finance Advisors provided attendees to the public hearing a summary of what it means to create a TID and why.

“In this case, we are taking an existing blighted site and creating a funding source to pay back the cost of redeveloping the site, the purpose of the TID,” Lentz said. “How does it work? By creating a TID and using it to promote the redevelopment, we’re able to capture new tax revenue that is developable and created on the site to pay for the cost to make the site developable. The creation of the TID is Step 1 and gives us the tool to be able to pay for costs associated with redeveloping the site.”

Creating a TID is not required to demolish the building or redevelop the site. It’s a tool to have a dedicated revenue stream to pay for the demolition and marketing of the site, rather than running it through the tax levy, he added. The village is under no obligation to create a TID.

These days, it can be tough to inspire a developer to redevelop a site, Ehlers said. In many communities, it’s not necessarily enough to just demolish a building and make it site ready. The village may have to provide incentives to get a developer to come in. The proposed TID creation plan includes a budget for demolition and one for incentives.

Tax Increment Financing (TIF) is a way for the community to target and invest to try to develop or redevelop an area within the community, Lentz explained. Sometimes a municipality needs help to do that, if they don’t want the cost to fall on taxpayers.

“The way the financing end works is you

See TID, Page 10

The old Ellsworth Junior High at 254 S. Chestnut St. will cost roughly $1.1 million to demo, according to estimates from a local firm. Neighbors are worried about what will take its place. Photo courtesy of Village of Ellsworth TID

from Page 1

find an area in the village that has a goal of re development, calculate if there is any taxable value on that property,” Lentz said.

While the property is in a TID, the village can create new taxable value through redevelopment. The property is taxed at the same rate (based on value prior to redevelopment), but 100% of taxes goes to the village, who uses it to pay back project costs. The other taxing jurisdictions, such as the school district, county and technical college, will see the benefits of higher tax revenue for their portions once the TID closes.

“As Becky noted in her letter, there’s a number of challenges with the site and the opportunity is for the village to secure the site and clean it up, remove the building that’s there now and provide in the long-term for a new project,” Lentz said. “Residential nature is likely. Houses, senior housing, apartment, anything. Step 1 is to demolish the building and make it suitable for redevelopment.

“In the short-run, the village will need some funding for demolition and making the site development ready.”

Currently, the site has a base value of $155,000, Lentz said. A new roughly $7 million structure built in 2023, if a TID is created, would mean $6.844 million captured TID value. That would generate about $132,000 in taxes (revenue) that the village could ear mark to pay back demolition and incentives.

“In today’s world, an apartment building gets you to $7 million in value pretty quick,” Lentz said.

The potential redevelopment would have two expenses. Demolition is estimated (from Ehlers) to cost $1,160,000. The second is incentives to developers, which don’t need to be paid up front.

“You sit down with a developer and you say if you do this project, if you pay your taxes and we use the Tax Increment revenue that you’re now paying, we’ll pay demo first and whatever is left over we’re willing to pay this back to you up to a certain amount of money to reimburse you for your development costs,” Lentz said.

The district could be paid back in the 27-year maximum life of a blighted district.

“What happens if we don’t find an interested party or developer?” asked Trustee Dale Hines.

The worst-case scenario, Lentz said, is the village would have to pay the demolition costs back from other funds, such as the tax levy.

Resident reaction

Although the TID was the item on the agenda and not what will actually go on the site, neighbors shared their opinions on what they want to see done there. They all agreed that the building needs to go, but not on what should be put on the lot.

“If this does happen, do the village citizens have a say as to what will be developed there?” asked resident Lisa Olson. “I assume it won’t be a park because it doesn’t bring in anything. Citizens want to have a voice. Is there a specific developer in mind and will bids be accepted?”

Beissel confirmed the land is zoned R-1 for housing.

“We’re just getting to the end of updating our comprehensive plan, and they’ve had a lot of say,” Beissel said. “For this particular property, we haven’t yet had conversations about that. As far as a developer, none are in mind yet. It will be kind of a marketing promotion to get people to want to develop it.”

Those conversations will begin this week at the Community Development Authority meeting, scheduled for 5:30 p.m. Thursday, July 21.

Another resident, whose name wasn’t clear, said the windows have been open for years and the roof flapping. She’s nervous about the demolition releasing “the yuck” into the air.

Trustee Andrew Borner reassured her that he provided Ehlers with a book labeling the asbestos in each room, obtained at the school district. Any asbestos would be properly abated.

Resident Dan Nelson lives on an alleyway between Chestnut and Plum streets. He’s worried a new development will increase an already annoying traffic problem, since Chestnut is a one-way street. He estimated 40 to 50 vehicles already cut through the alley per day to get around the one-way street.

“No one has ever done anything with it,” Nelson said about the alley traffic. “Make it a two-way street. People cut through to get to their houses.”

Beissel promised the issue will be looked at. No one remembers why the street is a oneway, but she assumes it was because of the school.

Resident Bob Wittenberg has lived in the neighborhood for 25+ years. He knows the school is an eyesore, but is nervous the nice, quiet, safe neighborhood will be disrupted.

“Old past history and mistakes were made that left some sore spots in the community,” Wittenberg said of the school district’s sale of the building. “They were logical decisions at the time. But moving forward, we just want to make sure there’s a good logical decision made for the community and the village.”

He pointed out that Chestnut is a main thoroughfare for bus traffic and high school kids parking. He also said Ellsworth needs more parks that are accessible to handicapped and senior citizens.

“We really don’t have a park in our area,” Wittenberg said. “We have two in town and neither one of those are well-conducive for handicapped or elderly” due to the hills.

He also proposed erecting senior housing on the site rather than low-income. According to his research, 15% of Ellsworthians are age 70+.

“People want to stay in their own community,” he said. “It’s an ideal location next to St. Francis and other churches.

“I’ve heard the rumors of looking at a lot of low-income housing. There may be a need in Ellsworth, I don’t know. We have a duplex next door to us. Living there for 25 years we’ve seen a lot of problems, including drugs, a lot of disturbance calls, a constant turnover of rental there. I would really hate to see something like that going into our neighborhood. The people with low income need a place to live too, but we need to be really careful.”

Lifelong Ellsworth resident Dawn Benoy has lived on Chestnut for 13 years. While she knows the junior high needs to come down, she doesn’t want to see modern homes plopped in an “idyllic area.”

“It seems like village board members already have their minds made up to plunk housing in our neighborhood,” Benoy said.

She asked them to consider how they’d feel if their pleas fell on deaf ears.

As the questions continued, Hines posed a question to residents: “What do you want done with this building? We don’t want to spend your money because it’s our money too. This is the only way we can economically do it. If we put this out to the village (in a referendum), it will never pass because it’s not pretty.”

One man admonished commissioners for being defensive and not listening to people. Hines then asked for a show of hands of people who attended the comprehensive plan town hall meetings. One man answered that he doesn’t read the newspaper because “it’s all depressing” and isn’t on Facebook, so the village needs to find another way to get information out.

One woman became emotional about the possibility of a “100-person building” going in.

“If it turns into that, I’m selling my house,” she said. “I don’t want to leave there. I love my home and I love my neighbors. You want to keep the long-term residents where they are if it doesn’t get developed into a big atrocity. I want to stay there until I die.”

Beissel reminded everyone that the meet- ing was talking about TID financing, not the development.

“We always want your guys’ opinions,” said Trustee Lance Austin. “We’re a governing body, not a dictatorship. Come to the CDA meetings.”

“If we don’t do the TID and you want the building down, we need to take it out of the tax levy and taxes would go up,” Borner said.

Beissel said the old junior high was people’s number one concern in the community survey and at comprehensive plan town hall meetings. Also in the top three were the village’s aging water and sewer systems.

The resolution for creation of TID 12 will be on the August village board agenda.