The untold story about the Strauss rejection: A tax increase

City of Franklin residents demonstrate along West Drexel Ave. against the Strauss Brands' proposed slaughterhouse expansion on Friday, September 25, 2020.

The city of Franklin’s Finance Committee met Tuesday night to discuss a review of the TID 6 financing plan with a pending $3 million debt authorization. Committee members were well aware of the Franklin Common Council’s 4-2 vote to kill an expanded facility for Strauss Brands.

“If I were Strauss Corporation  and I was going to guarantee to the city that I was going to invest $10 million in new construction, and I gave you that guarantee, I think that there would be some inkling that the city would approve my project,” said Committee Chair Dennis Ciche who was extremely critical of the Council’s action.

Alderwoman Shari Hanneman who voted against the Strauss expansion serves on the Finance Committee. Ciche asked Hanneman who represents the district where the current Strauss plant is located “have you heard from your corporate citizen?” Hanneman answered she had.

Ciche then asked Hanneman if she wanted to share what she had heard from Strauss. Alderwoman Kristen Wilhelm who attended the meeting via phone immediately interrupted. “Is that a financial matter?”

Ignoring Wilhelm momentarily, Ciche continued to question Hanneman.

“Do you want to speak to the committee?”

Hanneman replied, “At the moment, no. I would like to decline.”

“I think it is a financial matter,” Ciche continued “because the Common Council put the citizens of Franklin on the hook with a TIF District bond commitment. So, the council right now is sitting with a 3 and a half percent tax increase to the citizens because…”

Wilhelm then interrupted again, saying she would argue that Strauss should have known the special use amendment was not a guarantee, and said she was “not willing to put more on the record and I would caution others “about “putting additional information on the record” regarding the TID.

Ciche responded “Well Alderwoman Wilhelm I think that’s what we are talking about. The TID has a commitment from the city that’s backed by the taxpayers. So right now six council members and the mayor are going to be going out to the taxpayers of this community and saying ‘guess what? You have a tax increase that’s coming.’ And I see some heads nodding at the head of the table. Am I incorrect on that?”

Ciche and the committee were informed there are general obligation bonds the city has sold. If the TID doesn’t pay those it’s on the city with no help from the county, school district, MMSD, or the vocational district.

“To me it’s ludicrous,” said Ciche.

“Somebody needs to get their act together.  And furthermore. This is the best part that I think. It’s not Meijer’s from Grand Rapids, Michigan that we’re talking about. It’s an existing Franklin corporate citizen that has paid taxes, does the same type of operation that they’re talking about, and why are they expanding? This is the part I like. Why are they expanding?  Because demand is there. They have demand for their products. Isn’t that a good thing? Isn’t that what the city of Franklin wants with commercial development because if we build the homes we can’t keep the tax rate at where it is.

“I can just imagine when the public gets a hold of this, and the press. We are re-funding these bonds with a 3 and a half percent increase to the taxpayers. Welcome to Franklin in the year 2021. “I think the council has got the cart in front of the horse. When you approve a TID district and you’re willing to put the taxpayers and their guarantee on the line and then we come back and turn down a proposal, I’m finding it hard to see how that makes any sense.

“If the council decides to do nothing, the bond will be issued. We have obligations to pay. And we might as well put an advertisement in the paper that hey, we made a mistake, your tax rate is going up 3 and half percent because we’re issuing debt for a project that now we’ve cancelled. Because that’s the bottom line.

“Look at this on its surface. You’re out soliciting developers to bring activity to your community. You want that. You sign an agreement. And then, we get to the altar, and then we turn around and go the other way.”

The committee decided not to make any formal recommendation about the TID to the full Common Council.

3 thoughts on “The untold story about the Strauss rejection: A tax increase

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