A Madison alderwoman’s call to arms to lure industrial development is getting hushed by those who say such aggression comes with risk.
“It’s not a zero-sum game,” said Madison Alderman Michael Schumacher. “If a business puts a plant up in Madison near the McFarland border, but all the people move to McFarland, is that the greatest benefit to us? We have not done enough analysis to know.”
Nevertheless, Madison Alderwoman Judy Compton said the city has not been aggressive enough using tax-incremental financing to boost the city’s industrial areas. The result, she said, is businesses instead are moving to neighboring cities such as Sun Prairie, Verona, Fitchburg and Middleton.
“We’re crumbling,” she said. “We’re losing ground, jobs and residents to periphery cities, and we have to pull ourselves back out.”
Compton said the city should focus TIF resources on new industrial developments. In a TIF district, municipalities borrow money to promote new development through street and utility construction, environmental remediation, or loans and grants to private projects. The subsequent developments are expected to generate the money to repay the city’s investment.
Madison has created 36 TIF districts since 1978. Verona, meanwhile, has created four.
Yet, Bruce Sylvester, Verona’s director of planning and development, said the city has made the best of those TIFs and is not worried about competition.
“We evaluate each request for incentive, and if there’s something we can offer, we will,” he said. “But we won’t give a business something just because Madison promised it.”
Verona does not fear a Madison focus on industrial development, Sylvester said, because Dane County’s growth means local competition is becoming a thing of the past.
“We, as a region, need to start getting away from that mindset of what’s good for Madison is not very good for the rest of us,” he said. “Maybe one municipality gets the tax base, but Dane County gets the business.”
Still, in tough economic times, cities are prone to fight for that tax base, said Neil Stechschulte, Sun Prairie’s economic development director.
“It gets hard not to compete,” he said. “Does that mean we’re going to screen every business looking at us and looking at Madison? No. If some big project comes along, we could very well both have the gloves off.
“But an industrial project on Madison’s east side will still probably provide some benefit to us.”
In fact, Stechschulte said, TIF benefits were not a factor in luring some businesses to Sun Prairie.
“It probably helped that we’d put infrastructure in and had the land ready to go,” he said. “But usually it’s something like electrical rates or service issues.”
Madison, Schumacher said, should use caution before rushing into a TIF war.
“I’m not convinced Madison needs to become an industrial hub,” he said. “If we understand what we are about, then we know what we can offer businesses.
“Succeeding doesn’t mean giving the store away.”