The Uptown neighborhood is closer to getting its “first major corporate tenant” with the establishment of a new tax-increment financing district that could spend millions of dollars to bring it here.
Monona-based tech manufacturing company Phoenix has asked the city for help building a new, 50,000-square-foot global headquarters on the northeast side of the city off of Lacy Road and a 10,000-square-foot neutron imaging facility.
The project plan for Tax Increment District 13, which the Common Council approved Sept. 11, covers a much broader area, at 65 acres west of U.S. Hwy. 14. But it would authorize spending about $10 million on infrastructure and incentives to bring Phoenix to the city.
Ald. Tom Clauder (Dist. 4) said the TID and hard work by staff helped bring Phoenix and the roughly 150 jobs the company projects it will add and that the company was also considering Madison and Janesville.
Representatives from the company told the council Tuesday they plan to expand their workforce with the move and that the jobs average $81,000 a year.
TIF is a public funding mechanism that pools the increased taxes from development among all underlying jurisdictions – including the school district and county. It’s generally considered the most potent economic development tool municipalities have.
The plan still requires the approval of a joint review board, comprising representatives of those taxing bodies, though JRBs rarely say no. The Wisconsin State Journal reported that meeting will be Sept. 25.
The district plan includes an additional 300,000 square feet of commercial development, a prospective hotel development and some retail/residential mixed-use developments. Altogether, the city would be authorized to spend up to $23.5 million on a mix of infrastructure, development incentives and planning, legal and administrative costs to generate a projected increase in value of $132 million throughout the district.
Phoenix, founded in Madison in 2005, designs and manufactures commercial neutron generators used in healthcare, energy and defense sectors. The company has more than 70 full-time and 30 part-time employees, according to the project plan, and expects to grow to nearly 150 total by the end of 2022.
The first phase of the company’s growth here would be the imaging facility, which would begin operation in mid-2019. Its headquarters would open in early 2020.
The plan calls for street improvements that would include East Cheryl Parkway and new roads, called Greenmarket and Golden Gate. It allows for a total of $20.1 million in development incentives, infrastructure parking structures and sustainability features.
Half of that would be to bring Phoenix, including $5 million for a parking structure, $3 million for onsite infrastructure and $2.1 million in developer incentives.
Any development incentives in the project would be structured as a “pay as you go,” in which money is paid to the developers only after receiving increased taxes. That leaves the risk on potential developers, rather than the city, Mike Harrigan, the city’s financial adviser, explained.