Tarter Brothers Mechanical owner Greg Tarter appeared before the Delavan City Council at its most recent meeting to seek clarification regarding the terms of a tax increment financing (TIF) agreement approved by the council earlier this month.

The agreement concerns planned exterior improvements to Tarter Brothers Mechanical’s property at 117 E. Fourth Street. While previous TIF recipients have received forgivable loans as part of their development agreements with the city, the council elected to structure Tarter’s incentive package as a repayable loan carrying a 3% interest rate.

Tarter told council members he was surprised by the change in terms and questioned why his project was being treated differently than previous recipients.

“I’m a little curious about the 3%,” Tarter said. “I was assuming that it was a grant.”

The issue stems from action taken by the council at its prior meeting, when aldermen rejected a recommendation from Hometown Consulting to provide a forgivable loan for the project. The council instead approved a loan that must be repaid over three years at 3% interest, with payments beginning 90 days after project completion.

During that discussion, Ward 1 Alderman Joshua Lusher argued against continuing the city’s practice of issuing forgivable loans through its TIF program.

“I think we should give a low-interest loan, not forgivable,” Lusher said at the earlier meeting. “I think this forgivable stuff’s part of the reason why we’re in financial trouble.”

Addressing the council, Tarter noted that he has contributed to the TIF district through property taxes and expressed frustration with being required to repay assistance funded through a district into which he has paid.

“I have two properties that I pay TIF on,” Tarter said. “Now you turn around and you’re going to charge me for it.”

TIF districts are designed to encourage development and property improvements by using increased tax revenue generated within a designated area to help finance eligible projects. In Delavan, several previous recipients have received forgivable loans, making the council’s decision on the Tarter Brothers project a notable departure from past practice.