The city of Milton is taking steps to encourage and facilitate the development of a chocolate factory that initially could bring 60 jobs.
Proposed development by Clasen Quality Chocolates (CQC) includes 169 acres land north of Putman Parkway and 8 acres west of County M, according to City Administrator Al Hulick, who spoke at virtual Joint Review Board and Plan Commission meetings Thursday.
CQC specializes in chocolate and confectionery coatings and has facilities in Middleton and Watertown, with corporate offices and a CQC Innovation Center in Madison.
“CQC intends to develop their site in three phases, with their first phase being 390,000 square feet, their second probably doubling that and their third probably tripling that,” Hulick said.
In the first phase, Hulick said CQC is calling for 60 jobs and expects to “ratchet that up rather quickly.” The company could move to Phase 2 as soon as 2022, he said.
“At this point,” he said, “there’s not a lot of risk on the table because 1) we haven’t given Clasen anything yet and 2) we don’t have anything invested in it other than the creation of the district.”
By “district,” he is referring to the creation of Tax Incremental Finance District (TID) 11.
If all goes according to plan, Hulick said Milton will be only the second in Wisconsin’s history to do a “simultaneous creation and subtraction.”
Before the city of Milton can create a TID, it’s in a situation where it must subtract from a TID.
If the city of Milton could just add land to an existing TID, he said it would.
“By state statues, no municipality can ‘TIF’ more than 12% of its equalized value,” he said.
“We’re not allowed to add land to an existing TIF district without doing a corresponding subtraction,” he said.
Simultaneous creation and subtraction is a municipal tax incremental finance fete that requires not only the coordination of many moving pieces but the good will of an existing company.
The city of Milton found that good will in Charter NEX.
“The initial question is always, ‘What’s in it for us,” Hulick said. “And the answer is nothing (for Charter NEX).”
And, it doesn’t change anything for Charter NEX, as far as their tax bill, he said.
State statute also says a municipality may not subtract parcels and add them back into the TID in the same year.
“The only opportunity afforded to us in state statutes is what they refer to as a simultaneous creation (and) subtraction,” he said.
To add land that’s not currently within a TIF, he said, “We need to subtract out value from existing TIFs that would allow us to fall below the 12% threshold.”
That value is about $4 million, he said.
Because TIF 6, the city’s oldest TIF, will expire the soonest (3 or 4 years), that’s where the city looked to subtract value.
“We contacted Charter NEX and asked if they would be willing to be removed from the existing TIF 6,”Hulick said. “Because they are right on the boundary, it made for kind of an easy subtraction.”
Hulick said the value of Charter NEX is actually about $7 million.
“They were very accommodating to our request and have agreed to be removed from the TIF,” said Hulick, noting Charter NEX has seen tremendous growth, so their value is increasing rapidly and they have not utilized TIF funds.
“It was kind of a double plus for us,” he said because the new TIF could be created and the Charter NEX value would return to the overlying taxing jurisdictions.
The Plan Commission agreed and approved the plans to amend TID 6 and create TID 11.
TIF 11 will encompass the entirety of the Clasen Quality development site as well as parcels on the periphery that are currently located in an existing TIF.
