By Keene Winters

After four decades of downtown TIF spending, Wausau still lacks clear evidence that taxpayers are getting a meaningful return on their investment.

For 45 years, there has been a clarion call to “save Wausau” by investing in its downtown using Tax Incremental Financing (TIF). The TIF laws allow municipalities to create a geographically defined stream of property tax dollars and set them aside for use on economic development projects. The theory is that these segregated funds—if invested wisely—would generate sufficient new tax base to pay taxpayers back and leave the community in a better place.

Has that worked for us? If not, how much money is it going to take, and how long before we see results? These are not rhetorical questions. They are a function of knowing how much public money was spent, how much private money was spent, how much new tax base was created, and how much new property tax revenue was created?

What do we know already about the success—or lack thereof—of Wausau’s downtown TIF projects? The answer is: not nearly enough, considering the amount of money spent and the amount of time involved. But, we do know some things.

In January 2024, retired journalist Peter Weinschenk released a three-part analysis of District #1, the TID created for the construction of the Wausau Center mall. He chronicles how $57.7 million in public money was spent (a large sum for the early 1980s), how the project only lasted for 38 years, and how it ended up costing taxpayers money rather than producing tax relief.

Its successor is TID #3, which replaced TID #1 in the downtown and has become the granddaddy of Wausau’s TIDs in both age and in money spent. The maiden venture for TID #3 was the Dudley Building. In operation since 1994, $167 million in public funds have been raised for TID #3.

Here are a couple of observations about that revenue. First, TID 3 has been declared distressed, enabling it to receive nearly $15 million in donated property tax revenue from other TIDs.

Secondly, the district has generated almost $42 million in new property taxes since its inception, but none of it has ever been made available for city services. Those property tax dollars remain “fenced-off” and have—by choice—been devoted to the repayment of TID #3 debt and other TID expenses.

What was all that money been used for? To start, $85 million has been used to repay debt and interest. Another $67 million has been used for “infrastructure.”

What infrastructure? The list includes the riverwalk, the day-lighting of Stinchfield Creek and the neon walking bridge built over it. The list also includes the park and ice cream store underneath the Bridge Street Bridge and the docks by Wausau on the Water. Yes, it is all there for the public to enjoy. And no, none of it will ever pay any properties.

As a catalyst for private development, it has been 30 years, and we are still waiting.

Finally, out of $166 million spent, a paltry $11 million was committed to developer incentives. A third of that amount was caught up in the Frantz Community Investors scam. So, only a small amount was directed to what people commonly think of as tax-paying economic development projects.

What did Wausau get for $166 million in public investment? The answer is $165 million in new property values. That is a little less than the city invested, so the actual return on this investment is, in fact, negative. Now, if you’re thinking that $165 million seems pretty good regardless, that number is deceptive. A big chunk of data is missing.

The city has never collected or published any information on the private dollars invested in TID #3. Consider the the tens of millions of private money spent on the Dudley Building, the Wisconsin Eye Clinic, Pick-N-Save, Culvers, Trolley Square, the Loft Apartments, the Riverlife Apartments, and Wausau on the Water. That is all part of the investment that should have produced new taxable property. However, the mismanagement of the public dollars has been so great as to have eaten-up all of the private investment.

Look at it another way. Say, there was $80 million in private investment in TID #3. If we counted that as part of the investment, the ROI would be something like 67 cents in valuation for every dollar invested. It would also mean that every public dollar attracted less than 50 cents in private money. Factor in the effects of inflation over such a long time period, and it really becomes an abysmal return on investment.

TID #3 could have been closed at the end of 2023 or 2024. It had a positive accumulated balance at the end of those years. Instead, the city hatched a plan for TID #3 to borrow $7.3 million in 2025 and $3.3 million in 2026 to do the following projects:

This plunges TID #3 back into the red until 2031. Based on their descriptions, none of these projects will ever directly produce taxable increases in property values or bring any good-paying jobs to Wausau. In the meantime, while we are waiting for TID #3 to close, we the taxpayers will have to foot 100% of the bill for any staff increases or inflationary increases in the city budget.

It would not be hard for the city to put together a report analyzing its TIDs. You have just seen a good share of the data needed. It is in the city budget. Next we could use the permit and inspections databases to catalog how much private investment went into the district. We could then calculate the ratio of public to private dollars or do the math for an ROI.

Together, in TIDs 1 and 3, the city spent over $220 million over a span of more than 40 years. So I ask, how much more do we have to pay to “save the downtown?” How long before the investments pay off for ordinary taxpayers? More importantly, how long before we acknowledge that the big government model of the city buying land and then trying to decide its highest and best use parcel by parcel has clearly been a failure.

Do we want the downtown to thrive? Of course. But no city committee is going to brainstorm its way to that result. Only the free market will. Wausau should close its downtown TIDs, sell all the land it is holding, and use the proceeds to lower property taxes. Only then will a true catalyst for re-development take root.

Keene Winters is a former Wausau city alderman. He is also a two-time winner of recognition from the Wisconsin Newspaper Association for opinion page content.

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Winters: Decades of TIF spending haven’t ‘saved’ downtown Wausau. Why keep doubling down?