Groups sue city of Port Washington over tax incremental district referendum

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The Metropolitan Milwaukee Association of Commerce has filed a lawsuit against the city of Port Washington challenging an April referendum to require tax incremental districts with a value of $10 million or more to be approved by local voters. Trade groups in real estate and construction have joined the lawsuit on the side of MMAC, arguing it would change already established state laws on TID and create uncertainty for economic development.

The legal action challenges a proposed ordinance that will be on the ballot April 7 to require referendums for future tax incremental districts worth $10 million or more.

The city of Port Washington Common Council on Dec. 16 approved a motion to put the ordinance on the ballot after a neighborhood group called Great Lakes Neighbors United submitted a petition with more than 1,000 signatures.

Recently, the city approved a $458 million TID to support the $15 billion Vantage Data Centers project along Interstate 43, which prompted Great Lakes Neighbors United to file a lawsuit against the city. The city has motioned to dismiss that lawsuit. The April referendum isn’t expected to affect the existing TID after it was approved.

TIDs are created by cities, villages and towns with approval by their boards and require approval by a Joint Review Board, which includes a member of the public.

TIDs have been used to attract economic development and in part supported different construction projects over the years such as the Fiserv Forum in Milwaukee for example. Milwaukee is considering a TID to support the conversion of the historic 100 East building to more than 300 apartments.

Lawsuit argues that referendum will disrupt established state law on TIDs

The lawsuit requested the Ozaukee County Circuit Court to find the ordinance invalid and restrict the city from putting it on the ballot in the spring, according to a court complaint filed Thursday. MMAC argued that the proposed ordinance conflicts with existing state law governing tax incremental financing, which is used to support construction projects and economic development.

“Unless the court intervenes to halt the matter being submitted to the electorate, the proposed ordinance will irreparably harm employers, taxpayers and economic development interests in the city of Port Washington and throughout the region,” according to the filing.

Port Washington officials did not immediately respond to a request for comment.

“Drastic measures like the one we’re embarking on with this lawsuit are not taken lightly,” said Dale Kooyenga, president and CEO of MMAC, in a news release. “State statute already dictates the process in approving TIDs. A measure of this nature would not only conflict with state law, it would be devastating for economic development in Port Washington and would set a dangerous precedent with long-lasting economic impacts across the region and throughout the state.”

Construction and real estate associations join lawsuit

The Associated General Contractors of Greater Milwaukee, Building Advantage, Commercial Association of Realtors-Wisconsin, NAIOP Wisconsin Chapter, Wisconsin Realtors Association and Port Washington-based Sid’s Sealants joined MMAC’s lawsuit.

Officials at Building Advantage, a union construction trade group, said they joined the lawsuit because moving TID approvals to direct legislation was illegal and would hinder economic growth beyond data centers and Port Washington, officials said.

“This referendum threatens the financing of a countless number of projects and the development pipeline that provides jobs for our contractors and union trades people,” said Chris Mambu Rasch, executive director at Building Advantage, in a statement. “We can’t afford to let short-term politics of just a few people jeopardize decades of progress TIDs have provided for our industry and communities.”

Building Advantage officials said moving TID approvals to referendum would cause uncertainty and delay projects that need to use a TID. TIDs would no longer be used in many instances, and the economic impact would be felt across the region and throughout the state, they added.

“Our business’s success is heavily reliant on new construction,” said Sid Arthur, owner of Port Washington-based Sid’s Sealants, in a statement. “If large-scale construction projects become subject to the process being proposed, those opportunities will dry up. That means a loss of jobs, fewer investments and less growth in our community.”

“We know TIDs are essential to keeping our members on the job and earning family-supporting wages,” said Mark Kessenich, CEO of the Associated General Contractors of Milwaukee, in a statement. “Adding political hurdles will slow projects, drive investment away and threaten good union jobs. Our workers build the workplaces, housing and infrastructure Wisconsin relies on – this referendum puts that progress and those paychecks, at risk.”