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Bill to give Wisconsin cities new way to clean up contamination in blighted buildings

Lawmakers held a public hearing Wednesday on a bill that would give Wisconsin municipalities a new means of tearing down blighted buildings that contain asbestos and other contaminants.

The proposal, labeled Senate Bill 518, would give local governments authority to create a tax increment finance district to pay for the costs of environmental clean-up work that could arise from demolishing a blighted building. Currently, state law doesn’t give local governments authority to use TIF districts to finance clean-up work that might —say — result from disturbing asbestos in a vacant building.

Seth Hudson, director of economic development services for consultant Cedar Corp. said “hundreds if not thousands” of vacant buildings around the state contain environmental contamination such as asbestos. The presence of such toxins are often enough to dissuade developers. And cities can’t use TIF incentives to pay for such remediation work.

“Think about all the old schools, hospitals alone that would have that,” Hudson said. “Typically any structures that was built prior to the ’70s late ’60s has asbestos in it.”

The bill, co-authored by Sen. Robert Cowles, R-Green Bay, and Rep. David Armstrong, R-Rice Lake, received a public hearing before the Senate’s Committee on Natural Resources and Energy.

Cities now have authority to create an environmental remediation TIF district to cover the costs of cleaning up latent environmental contamination. The bill would allow municipalities to create such financing districts to pay for cleaning up environmental contamination caused by the redevelopment of a building — a use that’s not now listed in state law.

A number of groups have registered in favor of the proposal, including the Wisconsin League of Municipalities, Wisconsin Manufacturers and Commerce, the Wisconsin Realtors Association and the Wisconsin Economic Development Association.

Michael Welsh, legislative affairs director for WEDA, said the bill would expand the “economic toolbox” for local governments.

“This would provide a little flexibility to revitalize downtowns, industrial corridors and clean up some spaces that would spur additional redevelopment, tax base growth,” he said.

Cowles said there are 16 TIF districts around the state specifically created to deal with environmental contamination — a number that hardly approaches the number of polluted buildings in Wisconsin.

“We’ve all driven past buildings in our respective districts wondering ‘why doesn’t someone do something with that abandoned building?’ or ‘It’s a shame that building is still vacant,”” Cowles said. “Often it’s due to the fact that these buildings hold various harmful contaminants which require costly remediation and could possibly prevent redevelopment opportunities from coming to fruition.”

Armstrong, likewise, said a vacant elementary school in Rice Lake occupies a prime site for a housing development — the sort of project that’s in demand in his northern Wisconsin city, which has a population of 9,000. The property contains asbestos and formaldehyde, however, which is scaring off developers.

The bill, he said, could give the city authority to redevelop the property by creating a TIF district to finance environmental-remediation work.

“Rice Lake alone has three properties that could probabaly benefit from this, that have languished for years,” Armstrong said.

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