Dave Gawenda spent an afternoon last week knocking on doors. As Dane County treasurer, Gawenda does not often go door to door. But a recent development proposal by the village of Deerfield got him fired up.
"This is the first proposal I've seen offer a direct subsidy to builders of single-family homes," says Gawenda, who sits on the county's joint review board, which must approve the TIF district. "My gut reaction is, why do taxpayers need to subsidize single-family homes when there are plenty of homes being built already?"
The village wants to create a new tax-increment financing district, with retail and condos. What bothers Gawenda, though, is that the village's proposal would give a developer a subsidy of up to $200,000 to cut down a stand of trees and build 19 single-family homes.
Gawenda, who lives in southwest Madison, was knocking on doors in Deerfield looking for residents opposed to the development so that he could "persuade the village to do something different."
John Mathews, village president, says building more single-family homes would lure more residents to Deerfield. And a larger population would make it easier for the small village to attract a grocery store. The village has about 2,200 people, with another 1,500 in the nearby town of Deerfield. That population was not big enough to sustain the village's only grocery store, which closed a few years ago, says Mathews. Right now, residents go to Cambridge or to Madison to shop.
"You see older people on fixed incomes buying milk and eggs at the gas station," says Mathews. "We need a grocery store."
And Mathews says Deerfield needs to expand its property-tax base through more housing. The village is about $5 million in debt from building new roads and infrastructure. The municipality also had to build a new sewer plant, which is costing residents about $100 a month in water bills. "A growing population could help spread out the cost."
Gawenda did find at least one Deerfield resident who questions the proposed TIF. "I would love a grocery store," says Michele Rick, who moved with her family from Madison to Deerfield in 2003. "But I don't think they have to pile residents on top of each other. I think they have a big-enough base of people already."
In fact, Pardeeville in Columbia County is the same size as Deerfield and it has a grocery store. And the village did not have to use TIF to get it.
Gawenda thinks it's unlikely that Deerfield's TIF proposal will attract enough people to the area to make a big grocery store viable. "It's optimistic to think the village will grow in short order to 5,000 people."
It's not just the finances of Deerfield that stir Gawenda's concern. He thinks Deerfield's proposed subsidy could set a bad precedent in Dane County.
"It wouldn't be a big leap for developers to point to this and say, 'I'm going to need a subsidy,'" he says. "I'd hate to see Dane County communities competing with each other for single-family housing."
Mathews acknowledges this concern, but thinks developers will understand that these are special circumstances and not ask other municipalities for the same deal. "I don't think this applies generally to all development in the area," he says.
But Gawenda says the land, which is owned by Veridian, was already scheduled to be developed by 2011. The village is merely offering an incentive to get the development sooner.
"We have this test for TIF," says Gawenda. "We ask, 'Would this development occur if it were not for TIF?' Well, yeah. It will occur by 2011."
Mathews says the village can't wait that long. "We want the grocery store to happen now."
In fact, Deerfield's proposed TIF is not unprecedented. Mathews says the village has gotten approval for another TIF district that offered builder Don Tierney a subsidy for single-family housing. The village may pay Tierney as much as $2 million to build more houses on its west side.
Gawenda says that situation is different. The TIF money is being used to remediate stormwater issues, not merely push development ahead of schedule.
"I wasn't thrilled about it, but I did go along with it," says Gawenda, who sat on the review board that okayed Tierney's TIF. "I only approved it because I understood the money was needed for the stormwater issue."
But he can't justify the new TIF, which would take tax revenue away from the county, the school district and MATC. "I wouldn't be able to explain to somebody in the town of Primrose why they need to pay more taxes so Veridian can build more houses in Deerfield."
The village board approved the TIF plan this week. The county's joint review board is scheduled to take up the matter at its meeting on Aug. 29.
Mathews insists this subsidy is a one-time deal for the village. "I don't see any other reason to do a residential TIF again," he says. But this proposal "is an opportunity to help people in town. It will benefit everyone."
