The old feedmill/brewery in Bangor has been reduced to a pile of rubble, but what will go up in its place is still unclear. It is hoped that an Aug. 21 public hearing before the Planning Commission on establishing a tax increment financing district for the site will bring the situation into much sharper focus.

“Things will be a lot clearer by then — we’ll all know a lot more after the 21st,” said Village President Robin Gjertsen. That Aug. 21 hearing date was changed from the originally announced date of Aug. 20 to give the public additional notification.

At present, the site is owned by developer Paul Schams. Former owner Robert Lunke sold the property to Schams earlier this summer.

Meanwhile, the village board has been moving forward with the preliminary steps to establish a TIF district as a financial incentive to spur prospective development.

Last week the village sent out notices about the hearing to property owners within the proposed TIF district inviting them to the hearing. The fact that the notices were sent only to those with property within the TIF district concerned some village residents enough that they tried to ensure the letters got wider circulation.

“Myself and some others made copies of the original letters and passed them out,” said Ellen Steele.

“We think the village as a whole should know,” Steele said. “Our main concern is that the public know all the details since it will affect everyone in the village. This might be a great idea, but before we move too far I think the citizens need to become aware.”

Community leader and Village Inn owner Brian Berg agreed that residents are unsure of just what’s going on. “I think the biggest thing right now is that people need to be educated,” he said.

People are confused as to what establishment of a TIF district means, Berg said. “I don’t think anyone will miss the feedmill, but there are some homes there and nobody wants to see their home taken away.”

One property owner within the proposed TIF district put up signs saying “They are stealing our home.”

According to Gjertsen, it is premature to accuse the village of taking anybody’s property. “Nothing has been decided yet — much will depend on the final boundaries of the TIF,” he said. “We haven’t seen the developer’s plans yet and I don’t think anyone has.”

The stated purpose of the hearing will be to consider the proposal to create a TIF district and discuss the proposed boundaries of the district.

Contact Michael Martin at mike.martin@lee.net or (608) 786-6813.

HEARING: The Bangor Village Board will hold a public hearing on the creation of a tax increment finance district at 7 p.m. Aug. 21, at Bangor Village Hall.

How TIF districts work

In a tax-increment financing district, a municipality issues bonds to pay for development-related expenses, which can include land acquisition, road projects, sewer and water projects, even the purchase of a new fire truck.

To pay off those bonds, the municipality channels taxes on the increase in the value of the developed property toward repayment. The difference between the base property value at the establishment of the TIF district and the increased value is known as the increment.

The TIF district captures tax revenue on the increased property value for the county, school district and technical college as well as the municipality. Therefore, the county, school district and technical college collect taxes only on the base value of the property until the TIF district expenses are paid off, which can take as long as 20 years.

Here’s a simplified example of how it works. Let’s say the property within the TIF district is valued at $1 million when the district is established. The county, school district, technical college and municipality would continue to collect taxes on the property based on that $1 million valuation.

During the first year after the TIF district is established, buildings are built within the district that increase the property value to $3 million. The TIF district will then capture all of the tax revenue that would have gone to the four taxing entities on that additional $2 million and use it to pay off bonds for projects undertaken to encourage development.

Property owners within TIF districts pay the same in taxes as they would without the TIF district. But instead of paying those taxes to the schools, the county and the municipal general fund, that tax revenue from the increment is used to pay for things developers ordinarily have to pay for.

The state created the TIF district option for municipalities as a way to promote development or redevelopment of property that otherwise would not be developed.

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