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Committee recommends TIF increase and term extension for 100 East Wisconsin amid rising costs
Summary
The committee recommended a developer-financed increase to the tax-increment financing package for 100 East Wisconsin (TID 127), boosting the TIF ceiling and extending the repayment term to account for roughly $21 million in increased project costs tied to higher construction and financing costs.
Department of City Development (DCD) staff told the committee that market shifts since initial TID approval have raised overall project costs for the 100 East Wisconsin conversion by about $21 million. The amendment proposes increasing the developer-financed TIF from $14.4 million to up to $16.6 million and lengthening the TID term from 16 to 20 years.
DCD’s Larry Kilmer explained the project remains a commercial-to-housing conversion of a historically designated building that would deliver 373 residential units, of which 20% would be rent- or income-restricted up to 100% of area median income. He described the mechanics of a developer-financed TIF: the council approves a dollar amount and term, the developer uses that approval to secure lender financing, and the city reimburses incremental property-tax receipts to the developer annually up to the approved amount. Kilmer clarified the city does not issue upfront bonds under a developer-financed TIF.
Joe Klein of the development team cited increased hard- and soft-costs (labor, Davis-Bacon-related wage impacts, material costs and higher interest expense) and said project numbers were locked in to meet a firm lender closing date.
Committee members asked whether taxpayer risk exists; Kilmer and staff said the project places repayment risk primarily on the developer and their lenders, and that the city’s obligation is limited to the increment received. Two members recorded objections before the motion passed on a 4–1 committee voice (chair recorded a 4–1 vote tally in the transcript). The committee recommended the amendment be advanced to full council consideration.
