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City presents Tax Increment District review: eight active TIDs, TID increment above 12% statutory test
Summary
City staff presented an annual review of Oak Creek’s Tax Increment Districts (TIDs). As of Jan. 1, 2025 the city’s active TID increment exceeded the state’s 12% test (13.24%), limiting ability to create new TIDs until several current districts close or increment changes; staff outlined status, fund balances and outstanding debt across districts.
Oak Creek staff presented the city’s annual Tax Increment District (TID) review to the Common Council on Aug. 19, summarizing values, fund balances, outstanding debt and the city’s capacity under the state 12% equalized-value test.
Overall picture: The city currently has eight active TIDs and ten closed TIDs. Staff reported total increment across the open districts of about $845 million as of Jan. 1, 2025, which represented 13.24% of the city’s equalized assessed value and exceeded the state’s 12% threshold that constrains the ability to create new TIDs. Staff noted the city’s TID increment figure has fallen from earlier years (about 18% two years ago) but that major value additions to existing TIDs and expected future development mean the city may not fall below 12% until several districts close in the coming years (earliest likely after TIDs 8, 10 and 11 close in future years).
District highlights: Drexel Town Square (TID 11) remains the largest generator of new value with more than $230 million in increment and active pay-as-you-go and general obligation debt related to early infrastructure investments. TID 12 (IKEA parcel and surrounding development) and TID 13 (lakefront/bluff area) each reported significant increases in value during the year, with TID 13’s increment rising from $43 million to about $70 million in the latest period due to recent multifamily and single-family valuations. Staff noted that some TIDs will see lower revenue in 2026 if property valuation growth does not match a roughly 8% decrease in the citywide tax rate expected next year; that mismatch can reduce increment if values do not rise proportionally.
Debt and capacity: The city’s outstanding general obligation debt is shown across funds, with TIDs carrying a meaningful portion of debt used for infrastructure and land acquisitions. Staff reminded council that the city’s statutory capacity to issue general obligation debt remains substantial but that the 12% TID test affects the ability to create new TIDs and to use TID increment for projects prior to district closeout.
Why it matters: Tax increment financing is Oak Creek’s principal tool for incentivizing private development and funding associated public improvements. Staff recommended monitoring TID performance and noted that expected development activity in TID 12 and TID 13 could change the city’s 12% position in either direction.
Sources: Presentation by Max Gagan, Deputy City Administrator/Finance Officer, to the Oak Creek Common Council.
