With that said, last night I learned that our special council meeting scheduled for Wednesday has been moved to tonight (Tuesday, December 19) and is now an emergency meeting to allow the city to take action on ten items related to pending developments on the city's "Bluff Site," the current home of Fox Banquets, and the Zuelke Building.
These discussions have been underway for some time and likely would have reached council in 2018 under normal circumstances, but unfortunately actions taken by the state and federal government have left us in a situation that is far from normal. In each of these cases processes have had to be accelerated to take action in advance of major changes to tax laws. In both cases, the city's contributions to the projects via Tax Increment Financing (TIF) could be taxable under the new federal tax laws. In the case of the Zuelke Building there are also concerns about the availability of Historic Preservation Tax Credits, whose funding is now in question under a new state budget.
In both cases, those changes could create major funding issues for these projects that would increase their costs at bare minimum, and at worst could impact their viability. As such, council will come together in special session tonight to attempt to get agreements hammered out while we still can under the old rules.
Seven of the ten action items for tonight are related to the Bluff Site and are intended to facilitate development of a new $49.5 million corporate headquarters for U.S. Venture, Inc. Negotiations on this project have been underway for some time, but they're drawing to a close a little faster than anticipated in response to the factors listed above. The seven items up for consideration tonight include:
- A development agreement with U.S. Venture for the project, outlining among other things the city's proposed contribution to the project, expected tax credits from the Wisconsin Economic Development Corporation (WEDC) and the expected final value of the new facility ($49.5 million).
- The city's commitment to own a parking ramp under the new development.
- Related to the previous item, a commitment to provide 1000 parking stalls for use by U.S. Venture.
- Approval of the city acquiring the necessary property for the project.
- Approval of the concept (but not final design) and construction of a parking structure under the building.
- Modifications to Oneida Street near the development site.
- Vacation of nearby streets as necessary for the development.
Last week in closed session the Community and Economic Development Committee learned of accelerated plans for possible renovations to the Zuelke Building, located at the corner of College Avenue and South Oneida Street. The building is on the National Register of Historic Places but has fallen into a bit of disrepair in recent years. Last week the Committee was briefed on a proposal that would renovate the building to include upper floor apartments, improved office spaces and the addition of some underground parking. The three items that need to be approved tonight to continue the project are:
- A development agreement, once again outlining the expected city contribution, expected contributions via Historic Tax Credits and the expected final value of the improved facility (not less than $10 million). The facility is currently valued at slightly less than $2 million.
- Financial reimbursement of a portion of the project expenses via Tax Increment Financing to an amount not to exceed $2,019,500.
- An easement to allow access to the proposed underground parking through the corner of Houdini Plaza at the south side of the building.
Tax Increment Financing
Both of these proposed projects are located within the city's recently created Tax Increment Financing District #11, and the city's expenditures in and related to these projects would largely be funded using that system. Over the coming days and weeks some large numbers are likely to be thrown around but it's important to remember that expenditures funded by Tax Increment Financing do not result in increased property taxes. This is probably a good time for a recap on how TIF works:
- The amount of property tax revenue going to the four taxing entities (the city, county, school district and FVTC) from properties within the district is frozen for the duration of the TIF financing period.
- Money is borrowed to finance the TIF's expenditures, which may include infrastructure improvements, developer incentives, etc, with the goal of increasing property values within the district.
- As the property values within the district increase, so does the amount of property tax revenue collected. Any revenue over the "frozen" amount listed above is the increment, and is used to pay down the borrowing.
- Eventually the debts are repaid and the TIF district is closed. At that time, the taxing entities are again allowed to collect the full value of the property taxes.
I am frustrated by the speed with which these projects need to be approved and, as a result, the limited opportunities for council and community review. In the end, however, the timing issue is out of our hands and, barring something of major significance coming up tonight, I anticipate council will take action to approve these items and welcome these two projects and the opportunity they present to improve the economic status of our city.
Keeping you informed on issues that may impact you around the city is one of my primary goals as an alderman. Good governance happens in the open, and I remain committed to raising awareness on the issues coming before us.