April 5, 2021 – West Bend, Wi – Following a one-hour closed session the West Bend Common Council cast a 6-1 vote (Dist. 8 Meghann Kennedy the lone dissent) to approve a project plan and establish boundaries for creation of TID #15.
The focal point of TID #15 would be the redevelopment of the old West Bend Brewery which would be converted by HKS Holdings, LLC into 181 apartments and retail space. “Tax base, foot traffic and connectivity between the north and south of the river walk were the key points of the project,” said Phil Cosson with Ehlers Public Finance Advisors.
HKS proposes a mixed-use development with 181 high-end apartment units and a commercial space for retail or a restaurant.
After closed session District 5 alderman Jed Dolnick rattled off a list of direct questions. “The current value of the brewery and land is worth $770,000 (amount corrected) and it will be replaced by a structure that is conservatively estimated to be $35 million,” he said.
“The only money we (the City) will borrow is for the public improvements of the City river walk, the river walk going under Highway 33 and improvements to Main Street plus a third of the cost to clean up this site but we are not borrowing any money ($10 million) to build this.
“The third point, the most confusing, the MRO is not being paid for by borrowing it is being paid for out of the tax being paid on the property.”
Cosson confirmed all of Dolnick’s statements.
Kennedy voted against the proposal adding, “I’m really excited for this project, it’s beautiful and I think it’s going to bring a lot to the City. My no vote is on the belief that we have four potential new board members that could be on this board tomorrow (April 6 is Election Day and the even-numbered seats are up for election) so that is why I’m voting no,” she said. “I think this issue should be put before the new board.”
During his initial review of the $35 million development plan, Cosson said:
- It will take 23 of the 27 years to fully pay back the tax increment district (TID)
- There are up to $9.7 million in capital expenditures that are TID eligible.
- The $1 million incentive to the developer is for cleanup of the site including relocation of the We Energies site. Cleanup is estimated to cost $3 million total.
- $500,000 for river walk north. The $1.5 will be borrowed and it would be paid back by the City from increment from the development.
- River walk south is $2.2 million and that includes a tunnel under Highway 33.
- Portion of Main Street improvements which will be tackled in 2023.
- HKS estimates it will have its development constructed by 2023.
- MRO = municipal revenue obligation – a contract between developer and City. After the City’s obligations are first paid the remaining increment will go back to the developer up to $4,425,000. “The key is the City costs, borrowed money, will be paid first and what gets paid last is the MRO payment which will be due on an annual basis,” said Cosson. “If the valuation comes in less or it under performs the developers are the ones at risk and they are the ones that will be hurt.”
- Increment from the HKS development is 1 half of 1 percent appreciation factor as the revenue that comes into the TID.
The proposed TID #15 must still go before the Joint Review Board later this month, April 15.