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City mulls funding options for $66.7 million in redevelopment

in Investigations/Wisconsin news

By Shereen Siewert

WAUSAU — City leaders will take public comment tonight on a proposal to add two new tax increment districts to facilitate a combined $66.7 million in proposed development projects.

Tax increment financing, or TIF, subsidizes companies by refunding or diverting a portion of their taxes to help finance development within a tax increment district, or TID. The money generated by improvements stays within the district until the TID is retired, typically between 7 and 30 years.

If approved, the proposed TIDs will bring the city’s total debt to nearly $145 million, according to city documents.

TID #11

TID #11, which is located on the far west side of Wausau, would facilitate relocating two businesses currently on the city’s riverfront to newly acquired property in the city’s Business Campus. Under the plan, Great Lakes Cheese and Wausau Chemical would receive incentives to relocate, and would in turn donate their existing property to the city.

Draft of proposed TID #11. Source: City of Wausau

The project costs for TID #11 include nearly $9 million for three phases of infrastructure improvements, $1.5 million for pedestrian trails, nearly $4.4 million in interest and financing charges, and more than $1.5 million in land assembly deficits. The bulk of the $28 million proposal includes offering $4 million in development incentives to Wausau Chemical and $5.9 million to Great Lakes Cheese, according to city documents.

Both businesses would receive property within the new TID for $1 each and would build new facilities on those sites. Great Lakes Cheese also proposes adding 125 jobs to its existing 200-employee workforce, though the proposal does not appear to include a remedy for the city if those jobs do not materialize.

City Finance Director MaryAnn Groat presented the proposals to the city’s joint review board early Tuesday and said that that so far, no potential buyers have come forward to redevelop either property.

TID #12

The proposed TID #12 encompasses much of the east side riverfront property and some downtown parcels, extending south to Forest Street. The plan calls for $2 million in street improvements, $14 million for parking and skywalk project costs, nearly $6.8 million in interest and financing charges and more than $2.2 million in land acquisition deficits. The proposal also includes $1 million to Micon theater, an additional $3.95 million to Wausau Chemical and nearly $8 million for “other developer incentives” not yet specified.

Draft of proposed TID #12 projects. Source: City of Wausau

“We’ve done our homework here,” Mayor Rob Mielke told members of the joint review board Tuesday. “This hasn’t just been thrown together like some people think.”

Site cleanup

So far, city officials have not stated specifically who would be responsible for paying cleanup costs for the Wausau Chemical property, an EPA Superfund site.

In its most recent assessment, filed in April 2015, EPA officials wrote that complete remediation of soils beneath the Wausau Chemical building is “impractical.” EPA’s cleanup included several groundwater wells with treatment systems, two soil vapor removal systems, a landfill cap, land and groundwater use restrictions and groundwater monitoring.

But at Tuesday’s meeting, Groat dismissed concerns about potential toxicity at Wausau Chemical, pointing to a 2015 study by Conestoga-Rovers and Associates that indicated the property could be rehabilitated for residential redevelopment in the future. The property is currently subject to a deed restriction from the EPA, on file since 2007, that prohibits residential development on the land.

Groat said the cleanup at Wausau Chemical would likely be a “pretty easy project” and a “cakewalk compared to the soccer field,” referring to the former Holtz-Krause landfill that is now the site of a soccer complex.

The Holtz-Krause site, a landfill for more than 20 years, was assessed in the 1980s by the EPA but was never a Superfund project. That land went through an 18-year remediation process before being redeveloped, according to the Department of Natural Resources.

City council representative Pat Peckham called the Conestoga report, reviewed June 6 by the economic development committee, “good news.” That report showed the current soil contamination at Wausau Chemical is not currently having an impact on groundwater quality, but warned that future infiltration could be a problem when the existing building is removed.

Next steps

A public hearing on the two districts appears on the agenda for the June 20 meeting of the plan commission. That meeting will be held at 5 p.m. at City Hall.

Negotiations with Great Lakes Cheese and Wausau Chemical are complete and agreements are now being drafted by attorneys, Groat said, though both are subject to council approval. The full council will review both agreements, along with plans for both new TIDs, at the July 18 council meeting. If approved, the proposed new tax districts would then move to the joint review board for a final decision.

According to the city’s website, the joint review board’s decision to approve or deny a proposal is based on the following criteria: whether the development expected in the tax incremental district would occur without the use of tax incremental financing; whether the economic benefits of the tax incremental district are insufficient to compensate for the cost of the improvements; and whether the benefits of the proposal outweigh the anticipated tax increments to be paid by the owners of property in the overlying taxing districts.

Robert Tess, who represents the Wausau School District on the joint review board, praised the city’s “progressive thinking” in creating incentives for development and said the projects could potentially bring more students to the district.

“It certainly isn’t going to hurt,” Tess told the review board.

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