By Shereen Siewert | Wausau Pilot & Review
A highly anticipated downtown Wausau development will delay groundbreaking until spring 2024, according to a Wausau Opportunity Zone spokesman.
In September, city officials approved an agreement for The Foundry on 3rd, which will create 154 market-rate apartments and commercial space at the site of the former Wausau Center mall. Madison-based developer T. Wall Enterprises is the registered agent for the project, which at the time of approval relied on $10.8 million in public assistance including $6 million in principal.
At the time of approval, the developer specified an estimated $44 to $48 million cost for the project. But some city leaders say they are now concerned the cost of the project, based on an email update from Wausau Opportunity Zone President Dave Eckmann, could increase, along with the amount of city participation required to make the development a reality.
In his June 12 email, Eckmann said the project is delayed due to the “increased cost of construction materials” and “escalating interest rates.” He also cited “extended time investors require to make decisions” on the project.
Terrance Wall, in an email to Wausau Pilot & Review, balked at Eckmann’s characterization of a “delay” in the groundbreaking, even as he hailed WOZ as being “great to deal with.”
“Why delay?” Wall wrote. “Not a delay. It’s part of a normal process.”
But several City Council members say they were also notified by WOZ that groundbreaking, initially projected to happen in August, will be delayed until spring. In an email sent to City Council members and shared with Wausau Pilot & Review by multiple representatives, Eckmann said WOZ was contacted by Wall with a request to extend their purchase of the lot to next year. That request has been granted by WOZ, which owns the parcel.
Wall said construction plans have already submitted to the city and are being updated per comments received. A bank loan to finance the development is in progress, he said, and is “moving along nicely.”
An email sent to City Development Director Liz Brodek and copied to the city’s “media” email address asking for additional detail was not returned on Monday.
Mall plan sees mixed reaction
The Wausau City Council in October 2019 approved a proposal by Wausau Opportunity Zone, Inc. to purchase the mall with $1.6 million in taxpayer-funded incentives that 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 funding request grew significantly after WOZ made the decision to close the mall on Jan. 31, 2021 and submitted a request for demolition and street construction. Those incentives pushed the city’s expected participation in the project to more than $6.3 million.
Other critics say the price point of the apartment is too high, as concerns mount over affordable housing options in the area. As of last year, total development costs were calculated at $312,095 per unit, with rents ranging from $800 to $2,879 per month. But city officials say there is a demonstrated lack of housing at all levels, an issue communities are facing nationwide.
Unclear is whether T. Wall will request additional taxpayer assistance if the cost of the development continues to increase. The news comes at a time when Wausau is preparing to borrow $3.6 million for “Mall street grid and parking improvements,” all of which is encompassed by tax increment district 12. City officials will review the matter as part of a more than $13.3 million general obligation debt proposal being rolled out this week.
Though Wausau expects to abate a portion of the new debt with tax increment revenue, officials are obligated to levy property taxes to make all debt payments if those revenues are not available, according to city documents. If all new borrowing is approved, the city’s general obligation debt will increase to roughly $78 million, which does not include the city’s significant use of utility debt.
Meanwhile, preparations are underway to transform the space that once housed the mall and is part of a five-part plan envisioned by Wausau Opportunity Zone. Much of the concrete cap that once covered the surface of the mall has been removed, making way for utilities and temporary streets that will re-establish Second Street from Washington Street to Forest Street and will extend Third Street south to Jackson Street. Those streets will include additional parking, design features to enhance bike traffic, wide sidewalks to accommodate potential dining areas, along with trees and green spaces.
“We are well on our way toward implementing our vision for a vibrant downtown Wausau,” Eckmann wrote, in his June 12 email.
And Wall, in his email to Wausau Pilot & Review, said this project would not happen at all had it not been for the partnership with WOZ.
