The Common Council met 02/19/2025. They separated out two items related to the proposed development of the Thrivent property west of Ballard Road and just north of 41. One of these items was a cost reimbursement agreement between Thrivent and the city in which Thrivent fronted $100,000 to help pay for consulting services associated with the development process. One of the consultants that some of that money would go toward paying was Ehlers who was going to assist the city in determining whether the area qualified to be turned into a Tax Incremental Financing District. The other item was the contract with Ehlers itself for $14,000 for “Tax Incremental District (TID) creation services and further fiscal analysis service to be billed a $325/hour”.
Both of these items ended up being amendment to clarify that Ehlers was not being hired for “TID creation” services but instead for “TID consulting/evaluation” services. This change was made in an attempt to make it clear that creating a TID in that area was not a fait accompli and may end up not happening. The amendments to each of the items were approved by a vote of 14-1 with Alderperson Nate Wolff (District 12) opposing the change.
The amended items were then each approved 15-0.
I’ve prepared a transcript of the discussion for download:
Tax Incremental Financing Districts are a way to use future property taxes in an area to spur development. When a TID is created property values are set at a base level and then, for the duration of the TID, property taxes are paid on that base level even when the property value increases. The increase in property value is then used to help pay for the redevelopment of the project. TIDs are only supposed to be created in areas where the development would not happen “but for” the use of the TID.
Alderperson Sheri Hartzheim (District 13) voted against these two items at the Community Development Committee meeting because, although she was in favor of the city being reimbursed for some of the extra costs the city was taking on related to the Thrivent Development, she was opposed to creating a TID in that area. At the Common Council meeting she stated she had concerns about the language of the item and said, “It concerns me that we’re putting, perhaps, the cart before the horse in saying we would like ‘TID creation services’ rather than ‘TID exploration services’. So, I just fear that we’re on the precipice of starting something that we won’t be able to pull back from should we choose not to create a TID here.” She went on to point out that “Thrivent Financial for Lutherans is an $8 billion company in 2023. Who knows what 2024 was. But billion with a B, which is thousands of millions. I, again, fear that we walk down this path of TID creation services, and that is almost like a look Appleton is creating a TID for an $8 billion company”.
Alderperson Patrick Hayden (District 7) shared some of her concerns. He wanted to confirm that Thrivent understood that the consulting services that would be paid for “aren’t for the creation of a TID explicitly but that we’re looking into the potential of creating a TID, and that it’s not guaranteed”.
Community Development Director Kara Homan confirmed that Thrivent did have that understanding. “We’ve made it abundantly clear that in order to proceed with creating a TID, we need substantial documentation of the ‘but for’ for the TID, as well as any corresponding development agreement that would have increment passed on, again, deep dive into the pro formas and back and forth and analytics, which is why we, given the complexity of this development, felt it warranted to bring on Ehlers as an expert to assist.”
Alderperson Hayden stated, “I have a hard time with the ‘but for’ test, which I have a hard time seeing this pass, just because I kind of feel like this development is going to happen whether or not the city gets involved in financing it or not.”
He wanted to know what Thrivent’s development plans if a TID was not created versus if one was. Mayor Woodford stated that because the TID analysis had not been done that they did not have the answer to that question yet.
Alderperson Chad Doran (District 15) asked if it was normal for the city to pay for the services they would be hiring Ehlers to perform. Director Homan said that the city had used Ehlers in the past for at least one if not two TID amendments. “In terms of going out for these services, we are in transition in terms of staffing. Also, we’ve never had a TID creation that was this complex in terms of public infrastructure, potential development, pro forma review. It is typical of cities of our size to go out for consulting of this type. It’s just something new that we’re doing here at the City of Appleton, but not new to other communities.”
Mayor Woodford added that in the past the city has paid for outside consulting services but in trying to identify places where users (instead of the city) could pay for fees, they recognized that this was an opportunity to have Thrivent cover these costs. He noted that having users/applicants cover these costs was the direction that the sector was headed in in general. So, although Appleton had not passed these costs on to developers in the past, doing so was not unique within the sector.
Alderperson Chris Croatt (District 14) made an amendment to replace the term “TID creation” with “TID consulting/evaluation” services. This amendment did not change any of the language any of the supporting documentation or the agreement itself, it did clarify what the intent of the Common Council was.
Each of the items were amended, and the motions to amend passed 14-1 with Alderperson Wolff being the only one who opposed the change. He did not indicate why he opposed the amendment.
The amended items were then each approved by a vote of 15-0.
View full meeting details and video here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=1254912&GUID=B757A893-3C2B-43F2-B22A-EDF53CE044A3
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