Oconomowoc committee reviews amendment to TID No. 7 to add parcels, expand eligible costs and extend cash‑flow projections

City of Oconomowoc officials and financial advisors presented and discussed a proposed amendment to Tax Incremental District No. 7 during the Committee of the Whole meeting on July 1, 2025. The amendment would add two parcels totaling 16.23 acres, increase eligible TID project costs by $24,136,000 and revise the district’s projected cash flows.

The change matters because the amendment is intended to capture incremental tax revenue from additional townhouse development and other projects inside the district to help pay existing and planned district obligations. “TIF is really our only tool to help facilitate development, from that perspective,” city staff member Bob Duffy told the committee.

Greg Johnson, identified in the meeting as “Greg Johnson from Eller’s,” summarized the amendment as a twofold action: a boundary amendment adding the parcels and added project cost authority for public infrastructure and development incentives. Johnson said the amendment assumes approximately $50.6 million of incremental value from Newman Development (including an estimated $10 million for the repurposed chalet called “the social”) and about $36 million of incremental value tied to Vanguard’s Elevate project. The two parcels proposed for addition are estimated to add $34.6 million of incremental value.

Johnson walked the committee through the cash‑flow assumptions used in the draft project plan. He said the district’s tax rate at creation was $16.47 per $1,000 of assessed value and has declined to $12.07 per $1,000, a change that reduces annual increment and affects the timing of debt repayment. With the amendment and the projects factored in, the draft cash‑flow model shows the district’s cumulative balance exceeding liabilities by February 2044, which would permit an early close and payoff of obligations. The district’s original projected close date was February 2041, and Johnson said the projection lengthened in part because the chalet redevelopment was not included in the original assumptions.

City and developer financing relationships were described in general terms. Johnson said some infrastructure and incentive costs are anticipated to be financed with debt, consisting of a tax‑exempt piece for public improvements and a taxable piece for development incentives tied to the social building. He described existing agreements in which developers (named in the presentation as Land Guard and Newman) guarantee shortfalls: “Under the current development agreements ... if the tax increment that their developments alone generate is not sufficient to cover their respective share of the debt service, they are required to make shortfall payments to the city,” he said. Johnson also said some incentives are structured as pay‑as‑you‑go municipal revenue obligations (MROs) and that the city is not obligated to make up any shortfalls on those pay‑as‑you‑go incentives.

Aldermen questioned whether the twin‑home units shown on the map were newly planned or simply previously identified product types. City staff said the twin homes were always identified in the planned development and that adding the parcels into the district is an effort to capture the increment from that development. Alderman Mulder and others asked about the apartments’ affordability and whether the townhomes would be “attainable.” City staff responded that the city cannot control market pricing but that the proposed twin homes are priced lower than typical single‑family homes in the city and were included to diversify housing options.

Johnson outlined the next steps required by state law: a Plan Commission public hearing (scheduled the following evening), Plan Commission approval, formal consideration by the Common Council (noted for August 5 in the presentation), and final action by the Joint Review Board (tentatively scheduled for August 6). He noted that the Joint Review Board had held an organizational meeting the same afternoon and “no objections were raised,” but that the board took no formal action at that meeting.

Developer representative Matt Maroney (identified in the meeting as with Long Guard) offered brief comments in support of the projects, saying the repurposed chalet (“the social”) and the Elevate building would be positive assets for the area. “We’re very appreciative of our relationship with the city ... and most importantly, we’re really excited about the social,” Maroney said.

No formal action on the amendment was taken by the Committee of the Whole at this meeting; staff emphasized the project plan amendment itself does not commit the city to undertake the listed infrastructure projects or to issue debt. Those steps would require separate approvals, including construction approvals and developer agreements.

The presentation and the discussion included multiple financial assumptions and qualifications that the council and public may want to track closely if the amendment advances: estimated incremental values from specific developers, the added $24,136,000 of eligible project costs, the estimated interest and taxable financing tied to incentives, and the cash‑flow projection that shifts the possible close date into the 2041–2044 range depending on build‑out and tax‑rate movement.

The Plan Commission public hearing was noted as the next statutory step; Plan Commission approval is required for the amendment to advance to the Common Council, and the Joint Review Board must also approve the amendment before it becomes effective.