The current Shorewood Village Board is spending some big dollars and planning to spend more, and gambling that increasing property values will pay the bill.

Shorewood is using what is called a TIF (tax incremental financing) as a Financing Tool to pay for various projects, such as Streetscaping, the River Project, Condo Development, etc. 

According to the information published by the Wisconsin Dept of Revenue, a TIF works like this:

"Tax Incremental Finance, or TIF, is a financing tool that allows municipalities to invest in infrastructure and other improvements, and pay for these investments by capturing

property tax revenue from the newly developed property. An area is identified (the tax

incremental district, or TID) as appropriate for a certain type of development, and

projects are identified to encourage and facilitate the desired development. Then as

property values rise, the property tax paid on that private development is used by the

municipality to pay for the projects."

There is a risk though, that IF property values Decline, rather than Increase --- All the Property Tax Payers will pay for the expenditures through Increased Property Taxes, as explained here by the Dept of Rev:

" Municipalities can invest significant amounts of money  into  these infrastructure

improvements in hopes that growth will follow (sometimes called the "build it, and

they will come" strategy). However, if little or no private development occurs after the

improvements are made, there may be no tax increment revenue with which to pay for

the investment. If there is no increment revenue, the bonds used to pay for the

improvements will have to be paid for with general tax revenue. Paying for these bonds without a larger tax base means a higher tax burden. Another risk of over-investing can be that the site is improved, but the improvements actually prevent some types of development from being able to use the site."  

The Big Question now becomes --- are Shorewood Property Values Increasing or Decreasing ?

There are many different ways to calculate the values, and with the current volatile real estate market --- it is anybody's guess of what the values will be by the end of the current year. The basic method of calculating property values, involves what is termed "Market Value", and changes in what the sales prices are in comparison between two comparable time periods.  (Other methods of valuation, "replacement" and "income" are not commonly used for residential property appraisals or assessments).

Taking a snapshot of Single Family Home sales in Shorewood for the time period of January 1^st of this year (2008) to date, compared with the same time period for last year (2007), there is a notable trend:

JANUARY 1 TO MARCH  26, 2007 --- SINGLE FAMILY HOMES SOLD IN SHOREWOOD (17 sales)

ORIGINAL ASKING PRICE             DAYS ON MARKET             SALES PRICE

189,900                                               24                                            192,100

214,900                                               169                                          180,000

224,900                                               114                                          215,000

230,000                                               16                                            221,500

259,900                                               126                                          235,000

289,900                                               183                                          237,000

289,000                                               13                                            289,000

298,000                                               46                                            298,100

329,900                                               99                                            295,000

309,000                                               20                                            310,000

320,000                                               45                                            320,000

339,000                                               42                                            335,000

364,900                                               43                                            356,000

387,900                                               68                                            350,000

449,000                                               10                                            460,000

749,000                                               18                                            750,000

1,495,000                                            62                                            1,425,000

Tot  6,740,200                                     1098                                        6,468,700

Avg 396,482                                        65                                            380,511

THERE WAS APPROX A 4% DECREASE BETWEEN ORIG PRICE AND SALES PRICE

JANUARY 1 TO MARCH  26, 2008 --- SINGLE FAMILY HOMES SOLD IN SHOREWOOD (9 sales)

ORIGINAL ASKING PRICE             DAYS ON MARKET             SALES PRICE

279,000                                               112                                          237,000

314,900                                               146                                          290,000

399,900                                               141                                          300,000

415,000                                               181                                          376,500

424,900                                               172                                          417,000

479,900                                               91                                            449,000

589,900                                               88                                            555,000

599,900                                               31                                            560,000

1,349,000                                            204                                          1,000,000

Tot  4,852,400                                     1166                                        4,184,500

Avg   539,155                                      130                                          464,944

THERE WAS APPROX A 13% DECREASE BETWEEN ORIG PRICE AND SALES PRICE, AND DAYS ON MARKET DOUBLED OVER THE PREVIOUS YEAR.

 

WHAT DO YOU THINK ?  YOUR COMMENTS ARE APPRECIATED !

  

  You Paid for It: A Shining Shorewood

 For some thoughts on issues other than Shorewood, visit my other blog at

http://nonconventionalwisdomperspectives.blogspot.com/

At its last meeting the Village Board voted to authorize bids for the new Streetscape Plan. Preliminary estimates for the first phase are in the $3 million range.

Many of Shorewood’s residents probably remember the last time Shorewood had a major renovation project, It was the streetscaping of North Oakland Avenue in 1996. That renovation replaced the street, sidewalks and all the streetlights. Also installed were sidewalk pavers, benches, planters and trash receptacles.

We now find, barely more than 10 years after spending all that money on North Oakland Avenue, that all those nice new street lights, pavers, benches and trash receptacles are obsolete !

Apparently everybody involved failed to notice that we have winters in Shorewood, we use salt on our streets, and all those nice new fixtures, made of cast iron, are prone to rust. Reportedly, they have rusted to the point that they need to be replaced.

Our weather has not been especially kind to all of those pavers that were installed along the sidewalks either. Walking on what is left of the pavers, is taking a risk to breaking an ankle ! Patterned cement, in hindsight, would have been much more economical to install and maintain, while achieving the same decorative look.

The average taxpayer probably imagines that when the Village Board was informed that all the tax money that was spent 10 years ago has rusted away --- literally --- the Board was upset, and determined to find out how and why such a major mistake was made, and that the Board decided to get those answers and to thoroughly examine the new proposals, before committing to any new multi million dollar projects.

Unfortunately, the average taxpayer would be wrong !

The only Board Member who dared to rock the boat during the discussion to approve the bid process was Jeff Hanewall. He brought up concerns about the designs that were being proposed for the new streetscaping, and asked questions as to whether they were appropriate for Shorewood. It is noteworthy that Trustee Hanewall is an architect and is well versed in such matters, albeit that design is always of a subjective nature.

In the following discussion, it appeared that all the other trustees and village management considered the plan, as presented, to be a “done deal”, with no room for discussion or dissent.

When the slide show presentation of the plan was made to the board (you can view the same presentation on the Village’s website), there was a heavy emphasis on the fact that the CDA conducted a number of public meetings, and that Shorewood citizens in study groups, actually voted in favor of the plan that was presented.

That story, however, quickly changed upon questioning.

Trustee Hanewall questioned how the process was actually run. He questioned whether the design firm involved limited the selections available to the participants of the groups, and whether the selections were made without the context of viewing the elements as a whole. He pointed out that a popular vote of approximately 20 volunteers was going to be the deciding factor for a multi million dollar project for a village of 13,000 plus residents.

This was when a whole new description of the process by the CDA was quickly offered.

The new line given was that although there was a popular vote of citizen volunteers, the CDA and designers didn’t “really” let that be a deciding factor. They said that they had actually limited the information available to the volunteers, and that they never intended to, nor did they, abide by the consensus of the study groups.

Going on the appearances and actions at the Board meeting, it would be a good guess that the project is pretty much a “done deal”. There does not seem to be any appetite on the Board to study what went wrong with the North Oakland project --- nor to examine in any depth, the proposed elements for the new project.

And that begs the question of whether we in a rush to more obsolescence ? Are all those street light and poles rusted beyond redemption ? Have any restoration experts been contacted to examine the existing poles and assess whether there are any methods which can restore them --- and how that would compare in cost to replacing them with new ones ?

It has been said that we live in a “throw away” society. And perhaps all those nice “10 year old new” light poles are destined to our landfills.

But shouldn’t we expect better in Shorewood --- shouldn’t the Village Board examine this issue much more carefully before actually committing the millions of dollars it will cost --- with at least a minimal expectation that the new streetscape will have a useful life of more than 10 years before it is obsolete ?