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Howard filing objection over value of TIF

By Kevin Boneske
Staff Writer

HOWARD – Following the creation of a ninth Tax Incremental Financing (TIF) District to help sell and develop property formerly owned by OMNOVA Solutions, the value of the land is now in dispute where improvements are planned by Nouryon Pulp and Performance Chemicals, LLP.

Located on an approximately 80-acre site at 1701 Cornell Road, the boundaries and project plan for the new TIF District were approved in April by both the village board and the Joint Review Board.

The project plan includes a pay-as-you-go incentive over 20 years for Nouryon, which indicated in a development agreement it would continue to use the facility as a manufacturing plant and invest at least $50 million.

Director of Administrative Services Chris Haltom said paperwork submitted to the State of Wisconsin to create the TIF District includes a base value for the property before improvements are made.

“The base value would be determined based on what the value is on Jan. 1 of this year,” Haltom said.

Haltom said the state sets the full value assessment of manufacturing properties, which should be equal to 100 percent of the properties’ value, if the community is assessed at 100 percent of the full market value.

He said the assessed value in the village should be close to the full market value with a reassessment of properties taking place this year in Howard.

“Because the state did come up with the full market assessment, we can request the state to alter the valuation, or do an objection to the assessed value that they placed on the property,” Haltom said. “There’s two different issues involved. One related to the TIF District in the agreement that we have with Nouryon, who has purchased the property, and we had an assessed value or base value based on last year’s value. Last year we were at 92 percent of full value.”

Haltom said going to 100 percent of the property’s full value this year would create a problem for the village.

OMNOVA sold the real estate from Nouryon for $2.8 million with the personal property selling for $2.1 million, resulting in a total purchase price of $4.9 million.

However, Haltom said the state set the full value assessments at $7,865,700 for the real estate and $1,486,600 for the personal property for a total value of $9,352,300, while the developer agreement with Nouryon set the base value in TID 9 at $8,192,000.

He asked the board to authorize the filing of an objection with the state that would seek to have the full value real estate assessment of $7,865,700 be closer to $2.8 million.

Haltom, who noted the personal property valuation would not be contested, said it is the village’s position that the best estimate of a property’s value “is what it sells for.”

“The village gets to keep all the new tax base created above whatever the baseline is,” he said. “So if the baseline were zero, we’d get to keep all the taxes that they would pay. If the baseline is $4 million, we get to keep everything over $4 million. Once it gets over the value we put in their agreement they’ve made, we have to pay them an incentive back. That difference in $4 million and $8 million is money we would get to keep.”

Haltom said the village thought the property was worth around $8.1 million when it created the TIF documents, based on last year’s assessed value, and the best evidence of what it is worth now is based on the selling price.

By creating the TIF District, tax revenue raised from new property value will be able to go toward paying off the TIF debt, such as the cost of infrastructure improvements, instead of the additional property tax revenue having to be split among the various taxing entities in Howard.

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