Redevelopment in downtown Hudson will get a boost from a new tax-increment district approved Monday by the Hudson Common Council for the area.

The boundary for this mixed-use district is the historic downtown area, ranging from Elm Street to Interstate 94 and First Street to Third Street.

Typically, taxes for the area go to the various taxing jurisdictions, including the city, county, school district and technical college. With tax-increment financing, Sean Lentz of Ehlers financial planning said the current development of the district is frozen and known as base value. Any added value from new development, redevelopment or inflation in the district is then known as increment value. Taxes from the base value continue to go to all the regular jurisdictions, but taxes on the increment value are collected in a special fund that the city can then use for expenses to promote development and redevelopment in the district.

Council Member Randy Morrissette II asked if the district should be expanded to St. Croix Street to include the bike path, but Lentz said the half-mile allowance gives the city flexibility.

Lentz said this area will be focused mainly on redevelopment.

An estimated project list of park projects, street reconstruction, stormwater improvements and more shows expenditures of about $34 million in the 20-year life of the district, Ehlers said.

With known upcoming development and other future redevelopment, Ehler said the projected incremental value for the district is $62 million over the life of the district. That number is in addition to the current base value of more than $66 million. Taxes collected on the increment value are projected to be about $22 million.

Ehlers said the city has a 15-year implementation period to make individual decisions on how to use the funds collected from the tax increment district.

Hudson trolley

Residents and visitors will have a new way to tour Hudson as the city approved Kim Bennewitz's proposal for a sightseeing trolley tour company. The trolley would operate with the Octagon House as its anchor site, with pickups and drop offs on Third Street.

When the idea was first presented to the council in May, council members had concerns about parking and licensing. Since that visit Bennewitz said the trolley has been reduce from a 23-passenger to a 15-passenger vehicle. That means trips will likely result in only seven cars parking on Third Street.

Bennewitz said the tour focuses on other sites in Hudson beside the downtown area.

"We would really like to stay as much as we can out of downtown," she said.

Though the 15-passenger trolley is not subject to Wisconsin Department of Transportation regulations, Bennewitz said she would be following them anyway as her insurance requires it.

City Attorney Catherine Munkittrick said the city doesn't have any ordinance regulating this type of service. She said it could be similar to a taxi license in the city, which requires users to show proof of compliance with other regulations like vehicle inspections, insurance and license.

Bennewitz has already filed a taxi license with the city.

Morrissette said he supported giving the company a chance, but wanted to see the city work on an ordinance for the future.

The city will revisit the company's status in January.

Bennewitz said the company is looking at a start of end of July or mid-August.