City's focus on business eases tax burden on homeowners

New Berlin — Philip Oberman has lived most of his life in New Berlin, but he - probably like many others - is surprised at how much the manufacturing and commercial sectors of the city help keep property taxes down.

Commercial and manufacturing combined make up about one-fourth of New Berlin's tax base. And without them, the owner of a home assessed at $300,000 would pay roughly $1,800 more in property taxes for the city and its schools each year.

"That does surprise me," Oberman acknowledged.

"Of course, my house isn't worth that much," he joked.

And while some may wish for a community of all single-family homes, Oberman, who has lived in New Berlin since before it was incorporated, thinks the city is on the right track in continuing to grow its business tax base.

Forty years ago, commercial and manufacturing made up 15.8 percent of New Berlin's tax base. By 2009, that percentage rose to 24.8 percent, and businesses generated nearly $6.4 million in property tax revenue for the city.

Trend expected to continue

And that figure is likely to continue to grow, as city officials increased the proportion of land set aside for business park and industrial development when they recently approved the 2020 comprehensive plan.

That's just fine with Oberman.

"We need business in here," he said. "It keeps taxes down, and people need jobs."

Indeed, Director of Community Development Gregory Kessler said the desire for tax stabilization drove the move to increase the percentage of land devoted to business parks. Both the committee that worked on the 2020 plan and the city Plan Commission favored the increase, he said.

While the city is pushing for more business and industrial parks, New Berlin's No. 1 property-tax payer is a company that owns several apartment complexes in the city.

"We love working in New Berlin," said Tim Smits, president of the land development division of the Thomson Corp., which owns Stonegate Apartments, 13301 W. National Ave., with 188 units, and Fountain Square, near National Avenue and Sunnyslope Road, with 256 units.

In fact, at Stonegate, the company is cleared to build another 44 units as soon as banks start lending again, Smits said.

"In New Berlin, you're close to everything - all the services people need," Smits said. "The National Avenue/Sunnyslope corridor is all you need."

BuySeasons continues to grow

The largest manufacturing taxpayer is BuySeasons Inc., 5915 S. Moorland Road, which is the fifth-largest property-tax payer. BuySeasons is a retailer, wholesaler and manufacturer of costumes and children's party supplies.

Jalem Getz, president and CEO, said the company could have moved out of New Berlin two years ago when it outgrew its home in the middle of the Westridge office park, where it had done business for four years.

But the company's relationship with the city and its police and fire departments were too valuable to give up, Getz said.

"They understand our truck traffic and they know how to manage the fluctuations in our shifts," he said.

About 2,000 employees come to work every day in October for the busy Halloween season, for example. But only 400 or 500 employees work in January.

Getz said local businesses see a peak in their business as well when things are hopping at BuySeasons.

"Their busiest months are our busiest months," he said. And he speculated that 2,000 employees going to area restaurants and the nearby movie theater probably represent more revenue for the city than the taxes the company pays.

Other attractive aspects of New Berlin include room to expand and being reasonably centrally located for employees who come from as far as Oconomowoc and Racine, Getz said.

Location is key asset

Similarly, David Nestingen, president of Industrial Electric Wire & Cable, said the company's location off Interstate 43 at 5001 S. Towne Drive, is handy for its employees, many of whom live within seven miles of the plant.

Also, the city keeps its infrastructure in good shape, Nestingen said, and city officials are easy to work with.

"There are stories of the past, maybe 10 or 20 years ago, when it had not always been so easy," he said, but the administration and City Hall are supportive of local businesses.

The only thing he would like to see in New Berlin from a business standpoint is more retail, restaurant and hotel development to support business.

"There is a fair bit, but some on the higher end would be welcome," Nestingen said.

City assistance is limited

While city officials appreciate the importance of the business sector, New Berlin - unlike other communities - gives no financial incentives for companies to come or stay here, development director Kessler said.

But it does help them get in touch with the Waukesha County Economic Development Corporation if they need low-interest loans, he said. The city also will help small manufacturers expand by approving industrial revenue bonds, he said. Although the bonds represent no risk to the city, they offer businesses lower costs by being exempt from taxes. Kessler said he usually sends one or two requests for bonds every year to the Common Council for approval.

In the past, New Berlin encouraged business growth using tax-incremental finance districts, known as TIFs. A TIF allows municipalities to borrow money to fund infrastructure improvements for an area that otherwise would be difficult to develop or redevelop. The increased property tax revenue from the improved land is then diverted from the tax roll to pay off the loan.

Communities all over the state commonly use TIFs to encourage development or redevelopment. The Westridge office/business park is the most recent TIF in New Berlin. Robust development there enabled the city to pay off its infrastructure loan and close the TIF ahead of schedule in about 2005, Kessler said. Westridge is between the 4700 and 5800 blocks of South Moorland Road and includes the Target and the Ridge Cinema.

"We don't have any active TIFs at this point," Kessler said. But a TIF is one of the financing alternatives the city will look at for developing the Mill Valley redevelopment site at I-43 and Racine Avenue, he said.

City works to lure businesses

In addition, city officials work to attract new businesses.

"When we find somebody looking for a new location, we send marketing materials to those companies," Kessler said.

The city also works with real estate brokers to make sure they're aware of what type of spaces - both new and vacant - are available in New Berlin, he said.

Sometimes companies do not want it known that they are looking for space, so if city officials want to attract a specific type of business, they send a letter to companies in that field urging them to consider New Berlin if they plan to expand, Kessler said.

Officials go to this trouble because they know how important commercial and manufacturing is to stabilizing the city's tax base.

"There is a lot of value in those kinds of things in terms of assessed value and they don't contribute children to the schools," Kessler said.

While some school districts want more children so that they do not lose state school aid, New Berlin gets very little state aid, anyway, said Roger Dickson, the district's finance director.

In fact, building up the tax base helps the district because it results in a better credit rating, he said.

Dickson also appreciates the beneficial tax impacts of more businesses in the community.

"Commercial and manufacturing spread the property tax out more," he said. "So if that was the only thing, it is better to have it."

AT A GLANCE

Tax base from commercial and manufacturing:

West Allis - 32.5 percent

Brookfield - 28.3 percent

New Berlin - 26.3 percent

Muskego - 10.7 percent

TOP 10 TAXPAYERS

New Berlin's property-tax payers and how much they paid in 2009.

The Thomson Corp., based in Brookfield, owns apartments/condominiums/subdivision lots paid $1,126,274

Luterbach Construction, 2880 S. 171 St., New Berlin, business/real estate, paid $955,355

Towne-Luterbach, commercial properties, paid $475,529

FedEx SmartPost, 16555 Rogers Drive, package distribution, paid $433,231

BuySeasons Inc., 5915 S. Moorland Road, commercial business, paid $330,086

Sanctuary Woodshire apartments, 2200 S. Clubhouse Drive, paid $317,874

Pinewood Creek Apartments, 3150 S. Moorland Road, paid $250,873

Industrial Electric Wire & Cable, 5001 S. Towne Drive, commercial business, $247,114

Carriage Way Apartments, 1405 S. Coachlight Drive, paid $204,446

Princeton Club, 14999 W. Beloit Road, commercial business/health club, paid $199,672