2/13/2009 6:00:00 AM Council looks favorably on Reinke plan
Ruedebusch Development and Construction. The original plan was to move the TIF district from the western part of the property to the eastern portion, but that can’t be done. The “Suburban Industrial Plus” represents high-end office space, visible from the bypass.and it would flow east toward large light industrial buildings.
The state of the economy weighed heavily on the minds of Verona alders Monday night.
The debate over the latest proposal for David Reinke's 240 acres of land on the southeast side of the city kept coming back to the cost of doing something, of doing nothing and of doing the right thing the wrong way. In the end, though there was no action taken (or requested), it was clear most on the Common Council liked at least some of what they saw.
Unlike at last week's Plan Commission meeting, which was concerned mainly with the physical look of the buildings and the type of development planned - mostly industrial, with a 36-acre chunk of retail at the corner of County Highways PB and M - the council was able to take a broader view. Alders had to consider not just those terms but also put it in a financial perspective: How might it affect the city's bottom line?
And for once - fourth time was a charm here - the response to that question was mostly positive.
"This is a perfect example of a good use of tax incremental financing," Ald. Ken Harwood (Dist. 4) said of the agreements Reinke's development group had come to with city staff. "It, for the first time I've seen in a while, subscribes to the use of (the 'but for') clause"
That requirement, which limits the use of the government incentives to projects that would not have occurred "but for" the assistance, is easily abused. In this case, Harwood was arguing, using TIF to make the land construction-ready would help create long-lasting industrial development that would benefit the city for many years with skilled jobs and high property tax value.
"This is an excellent opportunity," Ald. Mac McGilvray (Dist. 1) said. "It's long-term planning."
Despite all the planning - more than six months of talks with the city the last time around - the deal differed from the one that had been presented just a week earlier in one major aspect. The TIF district won't be moved.
City administrator Shawn Murphy realized in that time that because the city is over an important statutory limit, the part of TIF 6 enveloping the western half of Reinke's land could not be redrawn to encompass the east side - therefore removing the retail portion of the property. As a result, it was incumbent on the developer's agreement to ensure that Reinke doesn't take the easy way out by letting the shopping center in the corner pay off the extension of utilities to the area and the upgrading of roads.
That wasn't a good discovery, but it was still good enough for McGilvray, who had attended the discussion at the Finance committee an hour earlier.
"I wholeheartedly pushed to see the retail component broken out so we wouldn't have this discussion," he said. "But there's no good way to get around the fact the retail component is there."
The piece with the retail could be removed entirely, Murphy later acknowledged, but doing so would make it hard to pay off the costs incurred by the district before its 23-year lifetime expires.
As a result, the biggest difference between this proposal and any other Reinke and his cohorts have brought to the table really is the agreements they have come to in negotiations with city staff. So it took a fair amount of trust at this early stage, and not everyone was up for that.
"How is the city going to afford this?" Ald. Brad Stiner (Dist. 3) asked. "I'm really concerned about our financial status."
Harwood, a retail developer himself, was willing to be trusting, but not without ensuring that it fills more quickly than the Livesey Co. has filled the Verona Technology Park just across County M.
"I'd like to see a more aggressive timetable than (in previous agreements)," he said. "I'm a fan of paying off TIFs in seven or eight years."
Ald. Scott Manley (Dist. 2) said that was all well and good but wouldn't change his "fundamental policy concern" that keeping the shopping center in a TIF district still ultimately is funneling city money to a big-box retail development.
"At the end of the day it's all going to the same project," he said. Without the retail "it would be a no-brainer to approve. But it does have retail."
The retail piece - probably anchored by one or two stores in the range of 100,000 square feet - is in fact expected to drive the development closer to completion and therefore likely would be sprouting out of the ground as soon as, if not sooner than, any part of the industrial park. While the benefit of having home-improvement supplies or a department store next to an industrial park is debatable, the spinoff development it would generate - including lunchtime restaurants - could make a difference in its marketability.
The need for such "ancillary retail" was recognized when the city first designed the TIF district and designated the northwest 24 acres of the Verona Technology Park as commercial. But that area is split into smaller parcels and can't be used for big box-anchored shopping centers without a special approval by the city.
Unspoken but referenced on multiple occasions Monday was the effect any gestures of approval might have on the West End, a big box-anchored development on the opposite site of town with a New Urbanist feel that has earned a slew of approvals but has as yet yielded no buildings.
Developer T. Wall Properties has repeatedly stated that its project, with high costs related to the integration of residential, park and office space into a faux downtown setting, would be in danger if it faced big-box competition before signing its first anchor. Should that be true, the cost of approving one retail development could be the demise of another - or the possible lowering of the standards that had gained a rousing approval in a public forum in 2006.
That would also come at the cost of the "barbell" concept - beefing up both sides of Verona Avenue under the assumption that it would prop up the entire corridor and downtown.
Ultimately, though, for the council, the desire to gain in the industrial sector seemed to outweigh concerns over which retail development goes where and how it affects businesses elsewhere. McGilvray, in particular, considered fostering competition with the Verona Technology Park - as well as creating a spot for the Verona Area School District's Global Academy project - a major gain.
"I'm not getting too hung up on retail happening right away," McGilvray said, perhaps acknowledging Kohls' decision to cut back on the number of stores it will open this year. "The economy is going to dictate when that retail goes."
