The developer of Kettle Park West will have to wait a little longer to find out whether it can get TIF assistance from the City of Stoughton.

Forward Development Group has been working with the city on the westside commercial and residential development since 2009. In July, it formally requested $3 million in tax-increment financing from TIF District No. 7 to help fund onsite costs of KPW phase 2, which features a residential subdivision.

The Common Council did not approve the request at its Sept. 24 meeting, citing a need for additional time to review the TIF application, finance director Jamin Friedl wrote in an email to the Hub. The council plans to revisit FDG’s TIF request Tuesday, Nov. 26, though it might handle the issue sooner, Friedl wrote.

Phase 2 onsite projects include alleys, trails, interior streets, extensions of existing streets and facilities for managing stormwater runoff. FDG initially requested $5.4 million of TIF assistance in 2016 for phase 2 on-site projects, but the council was not comfortable with the sum.

Phase 1, which included the Walmart Supercenter, got a separate TIF funding in 2015 after two years of controversy, including a referendum in which the majority of voters said they did not want the development and did not want the city to help pay for it.

“It would be great if we could proceed forward with the development not seeking any TIF at all – unfortunately that is not the case,” FDG representative Ron Henshue said at the Sept. 24 meeting. “This development, for a variety of reasons, requires some assistance. We’ve worked hard to try to get it to as low a level as possible.”

The phase 2 project area is adjacent to the north and west to the commercial center at the intersection of Hwy. 138 and U.S. Hwy. 51 and is planned for 195 housing units, along with new parks and roads.

Phase 2 also features Kettle Park Senior Living, 2600 Jackson St., which is set to open Sunday, Oct. 6, and a planned hotel that has been approved has not yet begun construction.

To help finance the entire KPW planning area, the city created the 140-acre TID 7 in 2014, which must close by 2035.

Any TIF assistance for phase 2 would be on a “pay-as-you-go” plan, Friedl told the council at the Sept. 24 meeting. That means the city would not have to pay anything until the increment is available from increased taxes collected on the site.

Under the proposed developer agreement presented Sept. 24, increment would first go toward paying off city administrative costs, phase 1 debt and the cost of road improvements on Oak Opening Drive and Deer Point Drive FDG would receive any TID 7 funds from phase 2.

FDG would also be responsible for all on-site public improvements for phase 2, including roads, sidewalks and buildings, under the agreement. The proposal also included a “lookback provision” in which the city would reserve the right to inspect the developer’s internal rate of return to make sure it did not earn more than initially stated.

An initial estimate of FDG’s rate of return included in the council packet is 12.5 percent. A city analysis in the packet said that meets the “but for” test, which means the developer would not be able to complete the project without the city’s tax increment.

KPW phase 2 cannot commence until the state Department of Transportation completes a roundabout at the intersection of Roby Road and Hwy. 51. Construction for the roundabout is projected for 2021.