By Shereen Siewert
City officials this week will consider a proposal to increase taxpayer investment in the Wausau Center mall demolition and redevelopment by about $2 million.
Wausau Opportunity Zone, Inc., or WOZ, in February purchased the financially troubled Wausau Center mall from Rialto Capital Management. The purchase was funded in part by a pair of local foundations, the Dwight and Linda Davis Foundation and the Judd S. Alexander Foundation, in partnership with the city of Wausau.
The Wausau City Council in October approved the group’s proposal to purchase the mall, a plan that included $1.6 million in taxpayer-funded incentives. The city’s initial participation, according to city documents, included a $1 million forgivable loan and transfer of city-owned assets to the LLC for $1. Those assets include the former Sears building, which the city purchased in 2017 for roughly $650,000.
The current agreement between WOZ and the city also includes projected future annual $327,000 developer payments. Now, officials are being asked to exchange those annual payments for a 2021 developer grant of $3,500,000. The net additional investment of these changes is expected to be approximately $2,000,000, according to city documents.
The adjustment is being proposed to fund a series of steps to redevelop the space starting with demolition of the mall, which is anticipated in early 2021.
Wausau Dist. 3 Alder Tom Kilian, who represents the mall district, is calling for more public participation before a decision is made.
“When there is a substantial amount of public dollars involved in a project, there should also be substantial public involvement and public input processes for that project,” Kilian said. “To date, there have essentially been no opportunities offered by WOZ for the general public to participate and meaningfully contribute to or alter the ‘vision’ presented. I will not support committing millions of public dollars to a process that continues to exclude the public.”
Mayor Katie Rosenberg said the economic development and finance committees will have a joint meeting to discuss the mall because the city is getting to the point where budget priorities for 2021 are set.
“Obviously this is a huge undertaking and it needs to be talked about both at the project level and the overall city budget level,” Rosenberg said.
The demolition and restoration of damaged and or exposed facades is expected to cost about $3.5 million. Water, sewer, and storm will be installed in the new street grid. Temporary streets would be constructed for Second, Third and Jackson Streets, while Washington Street would be expanded for two-way traffic and pedestrian amenities, infrastructure improvements expected to cost about $1.2 million.
When this work is completed the area will be available for redevelopment, said MaryAnne Groat, in a Sept. 17 memo to members of the finance committee.
“We have seen substantial investment in this project, including the initial million dollars and the yearly $300,000 or so in payments,” Rosenberg said. “I am not looking to get city taxpayers ensnared in a never-ending list of new requests and that’s why our team is suggesting we update that agreement.”
In July Chuck Ghidorzi, on behalf of WOZ, presented council members with a plans for what a reimagined Wausau Center mall space could look like in as little as five years. The sweeping plan calls for hundreds of residential and office units, more than 80,000 square feet of retail space, a public market, outdoor beer garden and a spiral bridge connecting the mall property to a year-round farmer’s market on River Drive.
Project planners call for major changes that include running a portion of Third Street through what is now the center of the mall, ending at the entrance of HOM Furniture, which would be refaced. Third Street would then intersect with a newly constructed Jackson Street, that would end at Fifth Street. Second Street would also run from Washington Street through the current mall to Forest Street.
Groat, in her memo, acknowledged that cash flows in the early years of a redevelopment is a challenge. She is recommending amending Tax Increment District 7 to serve as a donor district, allowing the district to “donate” excess increment to another tax increment district. Cash flow estimates for TID 7 project excess increment of about $1.3 million annually from 2023 to 2025. That nearly $4 million allocation would then be used to offset early deficits, while a short-term loan from the Alexander Foundation would also be considered.
Mayor Rosenberg said city officials must be as clear as possible about public investment and city participation, as well as expectations on the return on investment.
“I’ve talked to our internal teams as well as WOZ representatives about what I need to feel comfortable moving forward and that includes an updated agreement that lays out what the city will invest, how that investment will be used, and when we can expect to start seeing the development on city tax rolls,” she said.
Rosenberg said she has already talked to the city’s team about holding a public hearing on the project.
“Now that we have more details, it’s a good time to hear from the public and give policymakers a bit more to work with so they can feel confident in their decision-making,” Rosenberg said. “It will be up to the committee members to decide what they need but I think public hearings are a great opportunity for citizens and policymakers to get aligned on our shared goals.”
Rosenberg said the presentation on Tuesday should lay out a roadmap for policymakers on this project.
A joint meeting of the finance and economic development committees is set for 5:15 p.m. Tuesday, Sept. 21 at City Hall, 407 Grant St., Wausau.
Due to the COVID-19 pandemic, the meeting is being held in person and via teleconference. Members of the public may attend in person, subject to the social distancing rules of maintaining at least 6 feet apart from other attendees, or by calling 1-408-418-9388. The Access Code is: 146 421 8927 with the password: wausau.
See the full packet here.