Damakant Jayshi
The Wausau Museum of Contemporary Art is one step closer to transferring ownership after a vote this week from the city’s Economic Development Committee.
The committee voted, 4-1, to waive the city’s first right of refusal for the owner of the property on 309 McClellan Street and approve the sale of the property. The majority of the committee also voted to go beyond a recommendation from city staff to collect some payment in lieu of the potential lost taxes after the sale to a nonprofit organization.
Once ownership of the property transfers, it will be eligible for tax exempt status.
The right of refusal clause was part of a commercial loan agreement that David and Rebecca Hummer, representing Jim N.E. Cricket LLC, signed with the city in 2017. The loan allowed the couple to renovate the former Wausau Club property and transform it into the Wausau Museum of Contemporary Art, which brings internationally recognized artists and their work to the city.
David Hummer spoke to the committee, outlining why the museum needed the action. He said museums are economic machines and helped attract new residents and visitors, thus boosting the economy.
“Whether any of you realize it or not, whether or not the majority of our community realizes it yet, it is an international attraction,” said Hummer, who will continue as executive director of the museum. He added 85% of the visitors to the museum are from out of the city, out of the state or out of the country. Those visitors stay in local hotels, eat at local restaurants and shop at local stores.
The WMOCA is a volunteer-run, and “no one’s ever made a dime there,” he said.
David Hummer said that Development Director Liz Brodek’s predecessor, Chris Schock guaranteed him, “in a private meeting, that that the museum would never be taxed or go back on the tax rolls.” He only found later that Schock was not the one to determine that. “You can imagine how upsetting that is.”
As part of the loan condition, the Hummers signed a Right of First Refusal stipulating they would not sell the property to a nonprofit – which would deem the property as tax exempt, the staff memo said. It added if the nonprofit purchasing the museum qualified for tax-exempt status, it would go against the First Right of Refusal signed at the time of the Commercial Rehabilitation Loan closing.
“Through discussions, it was recommended the museum pay a Payment in Lieu of Taxes (PILOT) payment to make the city whole for the services provided,” a memo from Community Development Manager Tammy Stratz states. That will not be required, the committee decided.
That PILOT payment has not been determined yet and might not be necessary if the committee’s decision is endorsed by the full 11-member Wausau City Council.
Stratz told Wausau Pilot & Review that the staff proposed that the Hummers continue to pay the amount of the tax bill that the city would receive – just over $6,000 for last year – out of a total tax bill of $15,067. If the recommendation had been accepted, tax payments would continue “until the 20-year restrictive covenants expired.”
During the discussion, Alder Lisa Rasmussen said she normally did not make such recommendations but added she would like the city to help in this case.
“I don’t see why we would demand PILOT payment from that entity if you allow for this transfer,” Rasmussen said, adding it would be unfair to demand such a payment from the Hummers when the city does not ask the same of the Leigh Yawkey Woodson Art Museum. The Dist. 7 alder also said the Woodson does not pay tax and receives room tax on two separate allocations.
The McClellan Street property that once housed The Wausau Club had fallen into disrepair after its closure and needed extensive renovations when the Hummers bought the building. Rasmussen said the Hummers, who live in her district, approached her for help in the transfer. They had never sought room taxes or other financial assistance from the city.
Alder Tom Kilian said the assessed value of the WMOCA property in 2021 was calculated as $595,900 and added that sale price listing was $950,000. “It makes sense to allow the transfer to the nonprofit but from the reasonable, realistic financial perspective, I do not think waiving an agreement which…both parties had agreed to would be warranted or customary in this situation.”
Rasmussen said she felt the Hummers couldn’t continue in the situation they faced without the city’s support.
“I think that’s what caused it to be listed to prove a point in the first place,” she said.
Hummer said the LLC ownership arrangement was done on the advice of an attorney and now the museum has the opportunity to own the building “so it can file for tax exempt status and property taxes which it should have been in the first place. I’d like to keep going, keep doing it but I’d like to know that the city is behind me instead of making it really difficult.”
Committee Chair Sarah Watson, Alders Lisa Rasmussen, Carol Lukens and Chad Henke voted in favor of the motion proposed by Rasmussen. Alder Tom Kilian, who said he supported the transfer of the property but opposed the waiver of the PILOT payment, voted against the motion.
