West Allis deals with a developing situation on its tax district investments

Jan. 22, 2013

West Allis - About this time last year, West Allis officials were looking ahead to what was shaping up to be a banner year of development.

A hotel was to break ground at 82nd Street and Greenfield Avenue with a grocery store to follow soon. A $38 million headquarters for a nonprofit health care provider was ready to go in the Six Points area. And another business was in the last stages of negotiations to build a facility in the old lime pit area.

None of the $100 million worth of development materialized. But there is still hope for some of it this year, officials said.

Hotel vacancy for now

The 100-room hotel proposed by Waterpark Ventures Management Services LLC, a group affiliated with the operators of Wilderness Resort in Wisconsin Dells, was delayed by federal government slowness in performing background checks on the Chinese investors bankrolling the hotel, said West Allis Alderman Thomas Lajsic, chairman of the Safety and Development Committee.

The government does the background checks so that it can issue the investors green cards to come to the United States.

"Many hotels are built that way" with money from wealthy individual Chinese investors, Lajsic said.

The developer is now planning to break ground early this year on the $13 million project, he said.

The city was close to an agreement with a grocery store to complement the hotel development, but the grocer hasn't committed, Lajsic said.

Meanwhile, another grocery chain has expressed renewed interest, he added.

Lost developments

A development that won't come back is a $38 million project along South 66th Street between Greenfield and National avenues near Six Points. It would have meant not only tax money from the former Pressed Steel Tank factory site, but 150 new jobs.

The project, by the Tarantino Co., would have included offices for the headquarters of Community Care Inc., plus a nursing home, community-based residential care center and an assisted-living facility.

Community Care, 1555 S. Layton Blvd., Milwaukee, helps frail seniors and adults with physical or developmental disabilities live at home, sometimes with provision of adult day care. The plan proposed in February 2012 consisted of a health care campus of four new buildings on 7.5 acres .

But Community Care decided to outsource a lot of the services it would have offered at the West Allis location, so it doesn't need the development, said John Stibal, development department director.

While disappointed, officials are still optimistic that as the economy turns around, the Pressed Steel site will be snapped up.

"It's a great location," said Vince Vitale, the 1st District alderman whose jurisdiction includes the site, which he noted is centrally located with the Interstate 94 freeway less than a mile to the north.

Alderman Michael Czaplewski, who also represents the area, also sees an opportunity for something better at Pressed Steel. A clean light manufacturing company would be better and generate even more jobs, he said.

Of the defunct project, he said "It wasn't the optimum use for the property, but it would have been nice."

Another disappointment was the pullout by company that had been in the last stages of negotiations for the lime pit area at 67th Place and Becher Street, where the property was previously cleaned up and marketed for development.The company found a building in Franklin it could move right into, negating the need to build a facility in West Allis, Lajsic said.

Financial implications

Both the lime pit property and the health care headquarters project area are in special taxing districts designed to help them develop.

The city has already invested in cleaning them up and providing other improvements to encourage development. Under the taxing district arrangement, once development occurs, most of the property taxes the new development pays will go to pay off the city's borrowing for the improvements.

But because of the slow-recovery economy, the debt repayment is going slower than expected.

As a result, the City Development Department has proposed to help the two taxing districts along by using excess funds from a third taxing district that is doing well. That taxing district helped Quad/Graphics build a $12.5 million printing facility at Highway 100 and Theo Trecker Way and the district will be paid off this year.

The proposal is to use about $1.4 million in excess funds from the Quad/Graphics district to pay down the debt in the 11-acre lime pit taxing district at 1960 S. 67th Place.

Another $1.3 million in excess funds from the Quad/Graphics district would be used to pay down the debt on the taxing district in which the health care headquarters would have been located. That taxing district has actually already attracted $29 million in development, with another $10 million expected this year, the Development Department officials note.

A public hearing will be held Tuesday before the Community Development Board on the two money transfers. Development officials see them as protections against potential shortfalls on repayment, until development goes forward.

Still investing

Despite the problems in those two taxing districts, the city hasn't given up on the idea of investing in its future.

Also on Tuesday, the board will conduct another public hearing on a separate development proposal, in which the city would invest another $3.25 million in a successful special taxing district that has given rise to Summit Place in the 6700 block of West Washington Street.

Some $47 million of new development has already taken place on what once was the deteriorating Allis-Chalmers location. Summit Place is the city's largest taxpayer and its 50 businesses provide 2,300 jobs, development officials said.

To help the district reach its full potential, officials propose providing $2 million as a financial incentive for private construction of additional parking that will be needed by additional tenants. As a further encouragement, officials propose a $500,000 economic growth incentive fund to support business expansion and attract new jobs.

Another $500,000 would be a loan fund to help area residents spruce up their homes to upgrade the entire area, and the final $250,000 would be for administration and legal activities.

The additional investment would mean the taxing district would be paid off in 2018 instead of 2016.

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