Franklin’s TID 10 – Poth’s General Faces Legal Challenge Over Failure to Meet “But-For” and Blight Requirements

 

By Dr. Richard A. Busalacchi
Franklin Community News

A proposed Tax Incremental District tied to the Poth’s General development (TID 10) in the City of Franklin is now facing a formal legal challenge, raising significant questions about whether the project complies with Wisconsin law.

In a May 5, 2026 letter to the Franklin Common Council and Joint Review Board (JRB), attorney Joseph R. Cincotta, representing property owner Linda Mathwig, stated plainly:

“The proposed TID No. 10 and the Project Plan that supports it is not in compliance with the TID statute.”

The letter, submitted on the eve of the JRB’s consideration of the project, places the City on notice that approval of TID 10 – Poth’s General could be subject to judicial review.

The Central Legal Issue: The “But-For” Test

At the core of the objection is a foundational requirement of Wisconsin Tax Increment Financing law: a TID may only be approved if the development would not occur “but for” public subsidy.

Cincotta directly challenges whether that standard has been met:

“When a developer is able to finance its own improvements, and then receive what is in effect tax refund in future years… it defeats and is contrary to the idea that the development would not occur ‘but for’ the availability of public subsidy.”

The letter emphasizes that TIF is not intended to subsidize projects that are already financially viable:

“The ‘but for’ test should not be interpreted to allow for public subsidy merely on the assertion by a developer that they are not willing to risk and/or cannot get the financing they would prefer without TID subsidy to develop their project.”

In blunt terms, the letter argues that where financing is available but declined:

“In such a case the market is signaling that the project should not be built.”

State Guidance Requires “Convincing Evidence”

The objection also relies on guidance from the Wisconsin Department of Revenue, which outlines how Joint Review Boards must evaluate TIF proposals.

Cincotta quotes directly from the State TIF Manual:

“Before JRB members agree to the ‘but for’ criterion, they must have convincing evidence showing TIF is necessary to make the development possible.”

The guidance is explicit:

“If TIF is not needed before a development proceeds, the JRB members should not agree to the ‘but for’ criterion.”

According to the letter, however:

“The City’s consultant did not advise the JRB members… of the existence of the State TID Manual or provide the above guidance to the decision-makers involved in this matter.”

If accurate, that raises a critical issue: whether decision-makers were properly informed of the legal standard they were required to apply.

Blight Determinations Are Not Immune From Review

The letter also addresses the justification often used to support TID creation—blight.

Cincotta asserts that the project area does not meet any meaningful definition:

“The project area involved here is not genuinely blighted under any definition within the statute or otherwise.”

He supports this position by citing controlling case law:

“The predicates for a municipality’s determinations regarding the formation of a TID must be subject to some form of judicial review.”

This directly challenges the notion that municipal findings alone are sufficient or beyond scrutiny.

Subject to Certiorari Review

The letter makes clear that approval of TID 10 would not end the matter.

Under Wisconsin law, such decisions are subject to certiorari review, where a court evaluates whether the City:

• Acted according to law
• Followed proper procedure
• Relied on sufficient evidence

Cincotta explicitly warns that those standards may not be met here.

Notice of Potential Legal Challenge

The City, the Joint Review Board, and the developer are all put on formal notice:

“The intention… is to pursue further investigation and a potential legal challenge to this approval should it occur.”

The letter urges caution:

“We would suggest the approval be denied, but in the alternative, the matter be adjourned… so that the JRB can be provided with and evaluate the facts that are needed to make a proper decision.”

Implications for the Common Council and Joint Review Board

With this objection now formally on record, the decision before the Franklin Common Council and Joint Review Board is no longer a routine development matter.

The central issue is not whether the project is desirable.

It is whether TID 10 – Poth’s General satisfies the legal requirements imposed by Wisconsin law.

If the concerns raised in the letter are borne out, approval of the TID could be subject to judicial review and potential invalidation.

Additional Concerns: Process and Context

While the Cincotta letter focuses on statutory compliance, the record surrounding the project’s advancement raises additional concerns that may become relevant if the matter proceeds to court.

During Plan Commission review:

• An initial motion related to the project failed
• Commissioners then moved simply “to vote again”
• The same motion was subsequently approved on a second vote
• No formal motion to reconsider or amended proposal was introduced

This sequence—where a failed motion was revisited without a recognized procedural mechanism—could factor into a court’s review of whether the City proceeded on a correct theory of law.

The role of Mayor John Nelson, who serves as Chair of the Plan Commission, is also notable:

• The Mayor has voting authority but had not voted in multiple prior meetings
• He did not vote on the initial motion, which failed
• He did vote on the subsequent vote, which passed

The outcome changed only after his participation.

Campaign Contributions and Project Stakeholders

Campaign finance records from Mayor John Nelson’s 2023 campaign—during the period when the Poth’s General development was first advancing—show contributions from individuals connected to the project.

These include:

• Five contributions of $750 each from members of the Pekar family
  • Total: $3,750
• Two contributions of $750 each from members of the O’Malley family
  • Total: $1,500

Combined total: $5,250

Public records identify members of these families as being associated with entities involved in the Poth’s General development underlying TID 10.

There is no indication that these contributions violated campaign finance laws.

However, when considered alongside the approval process:

• A project tied to identifiable contributors comes before the Commission
• The initial motion fails
• The matter is revisited without a formal reconsideration process
• The Chair participates in the subsequent vote, which passes

This sequence may raise additional questions regarding the broader decision-making context, particularly if the matter is subject to judicial review.

Conclusion

The challenge to TID 10 – Poth’s General is grounded in a clear legal argument: that the statutory requirements for public subsidy have not been met and that the record does not support approval.

The additional circumstances surrounding the approval process—including the handling of the vote and the involvement of project-connected contributors—may further shape how that record is evaluated.

With litigation now a stated possibility, the City’s next steps will determine whether the project proceeds—or whether the matter ultimately shifts from the council chamber to the courtroom.

This piece reflects the author’s personal opinion and experiences. All statements are presented as commentary protected under the First Amendment. Readers are encouraged to review public records, filings, and documented evidence referenced throughout this article.

Dr. Richard Busalacchi is the Publisher of Franklin Community News, where he focuses on government transparency, community accountability, and local public policy. He believes a community’s strength depends on open dialogue, honest leadership, and the courage to speak the truth—even when it makes powerful people uncomfortable.

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