Fueled by cheese

Elkhart Lake creating tax incremental finance district to aid Sargento expansion as well as residential developments
Emmitt B. Feldner of The Review staff


The village of Elkhart Lake is creating its second tax incremental finance district to help keep Sargento Foods' technical center in the village and clear the way for up to $15 million worth of expansions to the facility. The TIF could also aid several future residential developments in the village. — Review photo by Emmitt B. Feldner The village of Elkhart Lake is creating its second tax incremental finance district to help keep Sargento Foods' technical center in the village and clear the way for up to $15 million worth of expansions to the facility. The TIF could also aid several future residential developments in the village. — Review photo by Emmitt B. Feldner ELKHART LAKE – It’s already been far less controversial than the village’s first tax incremental finance district but village officials are hoping it will be just as successful in the end.

The plan for Elkhart Lake’s TIF 2 was unveiled Wednesday at a public hearing before the Plan Commission at the Grashorn Municipal Building.

The plan will go to the Village Board at their May 20 meeting and before a Joint Review Board May 30 before it becomes official.

The spur for creation of the district – which utilizes property tax revenues from improvements within district boundaries to pay for public improvements – is a proposed $15 million expansion of the Sargento Foods research and development/engineering facility in Elkhart Lake.

But the boundaries of the district include much more than the existing Sargento facility and the project plan will impact potential residential developments in the village and more.

Financial advisor Phil Cosson of Ehlers and Associates told the Plan Commission that the district has been created as a mixed use district.

“Originally it was going to be created just for Sargento’s proposed expansion,” Cosson explained. “But it was expanded to include the proposed Victory (residential) development,” east of North Lincoln Street and west of Moraine Drive.

“The TIF was expanded in size, in part, in order to meet state law on mixed use district TIFs,” Cosson continued.

He said the projected life of the TIF is 20 years. The project plan includes seven potential projects to be financed with TIF proceeds.

“It’s kind of a laundry list of projects in here and some of these may never be done,” Cosson admitted. “This plan is not a budget. It gives the village the ability to move forward with some or all of these projects. It’s going to be a combination of both projected development and cash flow (in the TIF) that dictates what projects are done and when.”

The TIF plan also includes $1.1 million in developer’s incentives to Sargento to be paid over a threeby year period at the start of the TIF.

Sargento plans to begin construction this summer, according to Karl Linck, vice president of engineering for Sargento.

“We want to be able to use this site for the long term in Elkhart Lake,” Linck stated. “We want to continue to expand our R&D site here as well as R&D and engineering (offices) for all our sites.”

The TIF plan calls for extension of North Lake Street to make the Sargento expansion possible, as well as abandoning part of West Street and moving another part of West Street.

“Without the TIF, this site becomes maybe not so practical for future expansion,” Linck admitted.

The first phase of construction will see about a 5,000 square-foot addition this summer, with bigger additions in future years, according to Linck.

Another proposed TIF project, construction of a new street from State 67 (North Lincoln Street) to Moraine Drive, would aid the Victory residential development, Cosson said.

That development would be part of the TIF and add to the tax increment to pay off the up to $3.75 million worth of projects in the plan.

Possible expansion of the Cedar Landing complex, which is also located within the TIF boundaries, could aid the district, Cosson said.

While Cedar Landing is taxexempt, it does make an annual payment in lieu of taxes to the village to cover the cost of village services. Any expansion of Cedar Landing would result in an increase in the annual payment and that increase would go toward TIF revenues, Cosson said.

Cosson emphasized that the village will execute developer’s agreements with both Sargento and Victory Builders prior to groundbreaking by either party.

“It spells out clearly what they’re going to do and what the village is going to do,” Cosson said of the agreements.

The village’s first TIF was created to aid the development of The Osthoff resort project in the early 1990s. That TIF was met with significant opposition over several features, including the closure of a portion of Lake Street to aid the resort development.

The district closed last year with a positive cash balance, which was distributed to the village, the school district, the county and the Lakeshore Technical College district.


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