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Walworth County committee questions TID plan tied to Newman Development, asks for more information
Summary
Committee members reviewed a proposed tax-incremental financing (TID) plan tied to Newman Development, raised concerns about developer returns and county exposure, and asked staff to invite a city representative and share the consultant review at the next meeting.
Walworth County Finance Committee members discussed a proposed tax‑incremental financing (TID) project tied to a Newman Development residential subdivision and asked staff to gather more information before the county casts its vote on related approvals.
A county staff presenter told the committee that the Village of East Troy's Joint Review Board recently approved a new TID and that the City of Elkhorn (materials initially referenced as “Alcorn”) has submitted a project plan that appears to include the language the county usually requests. The presenter said the Elkhorn plan lists 422 properties in the TID area and identifies a proposed first development by Newman Development for 163 single‑family homes with a projected total build value of about $91,500,000 and an average assumed unit value of $450,000.
The presenter said the plan assumes the developer will pay roughly $9,300,000 in necessary infrastructure costs within the project assumptions and that the proposed developer incentive would return 70% of the increment to the developer. The county's consultant Ehlers completed a cash‑flow pro‑forma and concluded the development ‘‘would not be able to afford it’’ without the incentive; the presenter said Ehlers estimated the project's internal rate of return at about negative 0.29% under current assumptions, while typical benchmark returns cited in the materials are 12%–18%.
Committee members pressed several points: one asked whether the county's eventual share of the TID's total cost was quantified; the presenter said the county's share would be about $3,370,000 over the life of the TID under current assumptions. Other supervisors questioned whether the project should be classed as affordable housing (several committee members said it was not), and whether the county could meaningfully block or alter the development given the county holds only a single vote on the Joint Review Board.
Members asked staff to obtain and distribute the consultant (Ehlers) review from the city before the committee's next meeting. The presenter said the organizational meeting for Elkhorn would occur Feb. 6 and that committee votes on approvals were not expected before the committee's next meeting; the item was continued for further information and the committee invited a city representative to the February meeting.
No formal county vote on the Elkhorn/Newman plan occurred at the Jan. 23 meeting.
