Port Washington data center lawsuit: TIF ruling expected Feb. 23

At issue is a public referendum that could create a taxing district.

Last fall, community groups opposed to the data center collected enough signatures to get a public referendum on the April ballot.

They essentially want the chance to vote down a tax increment district (TID) that would help fund the data center. But several business groups filed suit, arguing state law does allow the city to put it to a vote.

Tracy Johnson is the president and CEO of the Commercial Association of Realtors Wisconsin (CARW). She said the latest lawsuit is not about data centers. "It is very clear about the concerns and that the conflict with state statute is at the core of the concern."

CARW is one of seven organizations trying to stop a public referendum that would decide on the creation of a tax increment district to help finance the project.

Johnson said, "We're concerned that if the way TIF is approved were to change, it would chill economic development."

On Friday, Ozaukee County Judge Adam Gerol called for the parties to file any arguments by next Thursday, Feb. 19. He'll then issue a ruling on Feb. 23.

The issue started last fall, when opponents of the data center wanted the public to get to vote on the tax increment financing. They wanted any tax increment district of more than $10 million to first go up for a referendum. The city accepted their petition in December.

But the suit argues state law allows only municipalities to create tax increment financing, not voters.

Johnson fears if communities are allowed to vote on every proposed TIF, "This is going to become a very litigious situation and investors are going to say, 'You know what? I can't work in this environment.'"

The city actually agrees with the lawsuit, writing in a response that it believes the referendum "unlawfully restricts and conditions powers that the Legislature has expressly delegated to Municipalities."

The city is named in the suit because that's who accepted the signatures and put the referendum on the ballot. But attorneys for the city wrote in a filing, "they are prohibited by law from rejecting the subject legislation even though they largely agree with the concerns outlined in the Complaint."

Port Washington Mayor Ted Neitzke was not available to speak on pending litigation.