By Kevin Boneske
Staff Writer
ASHWAUBENON – A development agreement to build a three-story, 60-unit affordable housing apartment building for seniors and 15, two-story, three-bedroom rental townhomes between Mike McCarthy Way and Borvan Avenue was rejected on a 4-3 vote Tuesday, Dec. 1, by the village board.
Village President Mary Kardoskee and trustees Allison Williams, Steve Kubacki and Traci Flucke voted against the agreement with trustees Gary Paul, Chris Zirbel and Jay Krueger voting in favor.
Upon rejection of the agreement with General Capital, which would have received a $1.2 million Tax Incremental Financing (TIF) loan incentive upon issuance of the final occupancy permit, the board also voted down the site plan for the project.
Community Development Director Aaron Schuette said repayment of the loan by General Capital would have been guaranteed over a 20-year period, starting in 2022, with annual payments of $80,825.
Schuette said the project would have had an assessed value of in the first year of $4.125 million, and the village could have kept any amount above $80,825 had the assessed value of the property generated more than that in annual property taxes.
Sig Strautmanis of General Capital said he hoped the amended agreement, which reduced the developer’s TIF loan request by $200,000, could “bring this deal together.”
Strautmanis said he worked with Schuette and Village Attorney Tony Wachewicz “to negotiate a fair and balanced development agreement.”
“In the development agreement, we agreed to a 5 percent premium payment over the cost of any borrowing – in other words, not just to cover the TIF borrowing, but also a premium of 5 percent,” he said. “And maybe most importantly, we agreed to remove a clause that would have essentially had a flat tax concept for us.”
Strautmanis said the agreement was “the best that we can do.”
“We still want to make this deal work and meet everyone’s expectations of quality and high design,” he said.
In deliberations lasting about 90 minutes, the board’s discussion focused on the financial risk the project could have for the village and whether it would miss out on another opportunity for a better investment on the site with another project locating in TIF No. 5 in the future.
Earlier in the day, Ashwaubenon’s Community Development Authority agreed to sell General Capital the 2.51-acre site for $1 with the conditions the board approve a comprehensive development agreement for senior housing and townhome development, along with General Capital being awarded Wisconsin Housing and Economic Development Authority tax credits and closing on the sale not occur until after the development agreement is fully executed and WHEDA tax credits are awarded.
Finance Director Greg Wenholz said TIF No. 5 is projected to end the year with a deficit of $6.2 million, and without any additional projects going on next year, it would have a deficit of $7.2 million.
Wenholz said the housing project General Capital proposed is “somewhat cost neutral to the village as it stands today,” but given the limited amount of land and opportunity for projects in TIF No. 5, the village could miss out on another project that might have located there in the future.
“You bring each project and look at it individually for what it stands for all the merits,” he said. “If it wasn’t senior housing, I doubt we’d be having these many meetings.”
Wenholz said he doesn’t think TIF No. 5 will close out with a deficit.
“Most TIFs start out that way (with a deficit), but you don’t know what’s going to happen next year or the year after,” he said. “Ashwaubenon has been very fortunate by its location. It’s desirable. So many people want to be here that most likely something’s going to come into play.”
Though locating affordable senior housing in Ashwaubenon is a goal of the village, board members questioned whether the project as proposed would be right for the area and have the necessary infrastructure to succeed.
Kardoskee said she didn’t want to “put our taxpayers at risk because we want affordable senior housing so bad.”
Flucke said she was concerned about moving forward with the housing project and not adding infrastructure along Borvan Avenue.
COVID-19 concern
Kardoskee said the village faces “so many unknowns with the COVID issue.”
Schuette said two projects previously approved in TIF No. 5 – a hotel and an office building – haven’t proceeded with the COVID-19 pandemic ongoing.
Zirbel, who described the timing and location being right for moving ahead for the housing project, said the village will have “bigger problems than we have here” if the pandemic runs another year.
Future site use
Following the board’s rejection of the housing project, Kardoskee said the site “will be available for development for anything that is allowed in the sports and entertainment zoning.”
“We will continue to explore our options for senior housing in Ashwaubenon, as that is a high priority for our board,” she said. “However, with the TIF request, it did not seem possible to have any increment dollars for infrastructure needs that development brings, as the request was for the life of the TIF. We will continue to explore our options that are available, as I said senior housing is very important for our residents.”