Muskego Deal With Northern Gear Called 'Win-Win'

Mayor Kathy Chiaverotti expressed her excitement over the to issue $7.2 million in bonds and to create a TIF district to provide incentives to build a facility along Moorland Road.

"The agreement is a win-win for both parties," she stated in a press release. "The business will have investment in its own facility, become more profitable while expanding. The city realizes more commerce and jobs in the area while incentives help ensure that the tax increment district can be paid off sooner with taxes distributed earlier to the overall tax roll."

The city's incentive package is valued at $825,000, and will help the company move large CNC machines from its current location in Franklin, as well as prepare the site, which is just south of GE Medical on Moorland.

What is a TIF District?

Tax incremental financing districts are created to spur development. Once they are established, an equalized assessed value is established. As properties are improved, the values — and therefore the tax revenue — also incrementally rise, and those increments are reinvested into the district.

For example, a business that uses TIF funds is assessed at $500,000 and pays $5,000 in taxes. As the value of that business increases (let's say $5,500) the additional taxes incurred ($500) are paid back into the district. 

While TIF funds can't be used for "brick and mortar" improvements to the businesses, they can be applied to other infrastructure improvements and subsidies.

Northern Gear employs 95 people, and the proposed 96,000-square-foot facility could expand by 50,000 square feet in the future.

After the announcement was made during Tuesday's Common Council meeting, owner Ronald Janusz told Muskego Patch that the location was ideal for the company's expansion, and it appears that the mayor agreed.

"The Moorland corridor business center is an ideal location for this business and its quality facilty and the City of Muskego is eager to have a valued employer such as Northern Gear based in this premier location of the city," Chiaverotti stated in the release, adding that future such partnerships will be sought for other companies.