By Keene Winters
It’s the dreamers that you have to worry about.
In my experience, the economic development sphere is to be loaded with officials, consultants and other pundits pitching grand schemes on how to spend other people’s money. Mostly, they hope that the projects created will be monuments to themselves with nary a care for whether the investments have paybacks. There are big egos with no financial “skin-in-the-game,” and they will bankrupt you if you let them.
That seems like a lesson that should be firmly imprinted on our collective memory by would-be riverfront developer Michael Franz. It should be clear to everyone that the city cannot have a public-private partnership with an LLC that has no money.
Yet, here we go again. We have jumped into bed with Wausau Opportunity Zones, LLC, (WOZ), a limited liability company with big dreams for the Wausau mall site and absolutely no money. Instead, WOZ seems to believe it should have an open-ended line of credit from the city taxpayers for whatever it wants to do.
In Phase I, it acquired the mall. The city gave WOZ the former Sears building, which it bought for $650,000. Then WOZ bought the former JC Penney building and the middle sections of the mall from Rialto Capital with a $1 million grant from the city and a $1 million grant from two local foundations.
Before us now is the Phase II “ask.” It is for $3.5 million taxpayer dollars to demolish the mall building and $1.2 million city-funded infrastructure improvements to the mall site. This step will be 100% government funded since WOZ has no money of its own. Any bets on how much the taxpayers will have to put up for Phase III?
In any case, there is a fundamental problem with the proposition that WOZ has put before the city. There is no way to evaluate whether it is worth spending $4.7 million more on top of the $1.65 million we have already spent unless we know how much taxable property will be built on the site afterwards. And we don’t know that. Rather, we are just supposed to trust that we are headed in a good direction and that things will work out.
Remember, we have no shortage of land for development in the downtown. There are still ten or so “clean-and-green” acres left from the original 16-acre riverfront site. The city has also acquired and cleared the former Great Lakes Cheese site and owns the former Wausau Chemical site. It is not like there is a queue of developers waiting for a space to open up. To the contrary, we have space to fill and investors are in short supply.
Here is where the folks at WOZ really could be helpful. Instead of being another Michael Franz, WOZ’s board of directors could use their time, talents and connections to what Christian Schock was unable to do for this property—write and circulate a request for proposals (RFP) that gets a meaningful response. In other words, WOZ should put its energies into finding and vetting a developer with money and convince him or her to invest in Wausau. Help the city develop the core competencies for its economic development department.
And, until WOZ finds that investor, leave the existing shops in the mall alone and do not burden HOM Furniture or the mall’s other neighbors with a demolition project. Do not bother to lay out new streets until you find out what the developer would like to do. Don’t give us any more pie-in-the-sky architectural renderings.
We need a group of business professionals to do a first class job of marketing Wausau and attracting investment to the downtown. That would be extremely helpful. Conversely, the last thing we need is another group of self-styled visionaries sitting around and brainstorming ways to write themselves into local history by spending public money.
Withdraw this demolition proposal and get to work on your RFP to bring investment to Wausau.
Keene Winters is a financial advisor who served two terms on the Wausau City Council, from April 2012 to April 2016. He lives in Wausau.
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