By Shereen Siewert | Wausau Pilot & Review
A records request submitted by developer Terrence Wall revealed significant concerns among taxpayers and city leaders about a proposed downtown apartment complex planned for the former Wausau Center mall property.
Wall, who spearheads Madison-based T. Wall Enterprises, Inc., made the expansive request of Dist. 3 Alder Tom Kilian on Sept. 5 amid a demand by an attorney to remove Kilian and a fellow council member from future deliberation on the Foundry on 3rd project. Kilian, Dist. 5 Alder Gary Gisselman and Dist. 10 Alder Lou Larson have been vocal critics of the $48 million project, which relies in part on roughly $10.8 million in public funding. Those records were then shared with Wausau Pilot & Review, after the newspaper requested them.
The Foundry on 3rd and its agreement with the city is up for debate on Tuesday, when the council will enter closed session to approve a proposed new timeline. Wausau Opportunity Zone, Inc., which owns the property and chose Wall as developer, along with other individuals and entities, has been pushing for city officials to move forward with the project. A large ad in the Wausau Daily Herald last week, which did not include any information on who paid for the ad, urged residents to contact alders in support of the project.
But if the emails Wall received Tuesday are any indication, there is no clear consensus about the project and its impact on taxpayers, as most of the records show sharp criticism and pointed questions.
Why spend $48M on a $24M property?
On the whole, the emails show significant support for Kilian’s policy positions and resistance toward the project. Some questions honed in on the market value of the property, which is expected to cost $48 million to construct. Once complete, the project will be worth about half that, according to city documents. The city will also foot the bill to borrow about $2.6 million to extend Third Street.
“I have been wondering why would someone spend $48 million to construct a property that they believe could be worth as little as $24 million,” one commenter wrote. “Doesn’t that seem like a pretty big gap to you? The answer to the latter question should be yes.”
Resistance to the project appears to come from across the political spectrum and from residents in districts throughout the city and beyond. Social media posts collected as part of the records grab are largely critical of the project and the way tax dollars are being planned. Many thank Kilian for standing up to “local elitism,” “big money” and “old money,”
Emails from City Council President Becky McElhaney also show frustration, stretching as far back as November 2021 when Chuck Ghidorzi, on behalf of WOZ, presented a discussion on T. Wall’s decision on “Switching priorities” from a riverfront project to the mall redevelopment. The discussion was not agendized, prompting McElhaney to call into question whether the discussion violated open meetings laws.
“The optics on the way this update was handled is horrible,” McElhaney said. “We had a department head call on WOZ to update the ED committee on a possible change in a development agreement passed months earlier. The agreement was between the city and T. Wall, why would WOZ present any changes to the committee?”
Funding questioned
Some emails expressed shock and dismay that the city would apply for roughly $10.5 million in grant funding intended for housing, child care, transit solutions and increased access to healthcare to fund a pedestrian bridge envisioned by WOZ as part of the mall redevelopment project.
“I cannot believe the city is entertaining the idea of using the money available for a WOZ bridge instead of the myriad of opportunities in which so many unfortunate Wausau citizens could be helped,” a resident wrote.
Not all downtown business owners appear to be on board with the project, either. Mark Brushert, of JR Brushert Jewelers in downtown Wausau, wrote in public comments earlier this month that he sees a need for something to be done on the former mall property, but not when the city can’t fix potholes and continues to raise water bills.
“The $10.8 million dollar(s) they want in public assistance is crazy,” Brushert wrote. “The city of Wausau is not a bank.”
In a letter to Kilian and Gisselman produced as part of the records search, former Alder Dennis Smith urged both to ask where T. Wall’s financing is coming from and how much of their own money is being committed to the project.
“It has always amazed me how the city’s economic development department keeps dropping the ball when seeking developers to partner with the city on a project,” he wrote, calling the project an emerging “Mike Franz 2.0.” That reference is in regard to a failed project on the city’s riverfront that fell apart and resulted in changes to Wausau’s vetting process for partners.
Emails also show the developer, who issued withering criticism of the city when the council chose to delay a vote on the revised Foundry agreement, missed a deadline for which to get the agreement on the agenda. An email to council members from Mayor Katie Rosenberg, dated Sept. 7, said staff worked at “hyper speed to update the agreements with both WOZ and T-Wall in the hopes of getting it back in front of you by September 12. Despite that, T-Wall missed their deadline with us to get it on the agenda.”
The agreement is now on the agenda for the Tuesday, Sept. 26 meeting.
Living in a ‘bubble’
Text messages also show a divide between council members and department heads, and show significant concern about how the development unfolded. That includes concerns about potential open meetings violations, inconsistencies with zoning codes for apartment sizes and doubt over how the city-subsidized apartments will ever be filled.
A text from Becky McElhaney to Kilian retrieved as part of the records request accused departments heads of “running the city without elected oversight.” McElhaney also accused Ghidorzi and developers of living in a “bubble.”
“How they will fill 309 higher end apartments is beyond me,” her text reads.
Several residents echoed that sentiment and asked openly whether higher end apartments are the answer to Wausau’s housing woes. Critics say the price point of the apartments are 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.
Another text from McElhaney shows that the city passed the general plan for T. Wall’s Foundry proposal “even though it does not meet current code for minimum sq. footage for apartments.”
On Tuesday, the council will enter closed session to review an amendment to the development agreement for The Foundry on 3rd that will extend groundbreaking to next year and specify that taxpayers will not be on the hook for expenses related to a canceled environmental cleanup contract. WOZ purchased the mall with $1.6 million in taxpayer 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.
A Sept. 6 email from attorneys Patrick J. Cofffey and Jacob R. Sundelius, of Menn Law Firm Ltd., formally asks the city to provide notice that Gisselman and Kilian would recuse themselves “within 48 hours.” Both alders are expected to vote on the matter on Tuesday.
