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Community Development Authority Packet - 5/19/2015 CITY OF MUSKEGO COMMUNITY DEVELOPMENT AUTHORITY AGENDA May 19, 2015 6:00 PM Aldermen’s Room – Upper Level of City Hall, W182 S8200 Racine Avenue CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL STATEMENT OF PUBLIC NOTICE APPROVAL OF THE MINUTES OF MARCH 17, 2015. INTRODUCTION OF NEW CDA MEMBERS ELECTION OF CHAIR, VICE-CHAIR, AND SECRETARY PUBLIC INPUT NEW BUSINESS 1. Commercial Grant Request: Marx Pioneer Inn (180 S7808 Pioneer Drive) 2. Commercial Grant Request: Max A. Sass & Sons Funeral Home (W173 S7629 Westwood Drive) 3. TID 8 Grant Request: Muskego Mobil (S73 W16680 Janesville Road) 4. TID 8 Grant Request: DeWinter Eye Care (SW Corner Janesville Road/Bay Lane Drive) 5. Revolving Loan Fund Request: Alpha Plastics (S82 W19362 Apollo Drive) ONGOING BUSINESS 1. Tess Corners Redevelopment District (#1) Implementation 2. Downtown Redevelopment District (#2) Implementation 3. Muskego Business Park Redevelopment District (#3) Implementation 4. Mill Valley Redevelopment District (#4) Implementation 5. Marketing Plan Implementation MISCELLANEOUS BUSINESS AS AUTHORIZED BY LAW 1. Redevelopment District Developments Disc. & Other Miscellaneous Information Updates 2. Next Meeting Date ADJOURNMENT NOTICE IT IS POSSIBLE THAT MEMBERS OF AND POSSIBLY A QUORUM OF MEMBERS OF OTHER GOVERNMENTAL BODIES OF THE MUNICIPALITY MAY BE IN ATTENDANCE AT THE ABOVE-STATED MEETING TO GATHER INFORMATION; NO ACTION WILL BE TAKEN BY ANY GOVERNMENTAL BODY AT THE ABOVE-STATED MEETING OTHER THAN THE GOVERNMENTAL BODY SPECIFICALLY REFERRED TO ABOVE IN THIS NOTICE. ALSO, UPON REASONABLE NOTICE, EFFORTS WILL BE MADE TO ACCOMMODATE THE NEEDS OF DISABLED INDIVIDUALS THROUGH APPROPRIATE AIDS AND SERVICES. FOR ADDITIONAL INFORMATION OR TO REQUEST THIS SERVICE, CONTACT MUSKEGO COMMUNITY DEVELOPMENT DEPARTMENT, (262) 679-4136. Unapproved CITY OF MUSKEGO COMMUNITY DEVELOPMENT AUTHORITY MINUTES March 17, 2015 6:00 PM Aldermen’s Room – Upper Level of City Hall, W182 S8200 Racine Avenue CALL TO ORDER Chairman Robert LeClaire called the meeting to order at 6:00 PM. PLEDGE OF ALLEGIANCE Those present recited the Pledge of Allegiance. ROLL CALL Present: Robert LeClaire, Bonnie Johnson, Lana Arrowood, Bob Mueller, Ald. Blaise Di Pronio and Director Jeff Muenkel. Absent: Ald. Bob Hammel. STATEMENT OF PUBLIC NOTICE The meeting was noticed in accordance with the open meeting laws. APPROVAL OF THE MINUTES OF JANUARY 20, 2015. Bob Mueller made a motion to approve the minutes of January 20, 2015. Bonnie Johnson seconded. Motion Passed 5 in favor. PUBLIC INPUT OLD BUSINESS Tess Corners Redevelopment District (#1) Implementation Downtown Redevelopment District (#2) Implementation Muskego Business Park Redevelopment District (#3) Implementation Mill Valley Redevelopment District (#4) Implementation Marketing Plan Implementation NEW BUSINESS TIF 8 Request: Taihyon Yun (S75 W17301-51 Janesville Road: Westwood Centre) Alderman Di Pronio made a motion to approve TIF 8 request for Taihyon Yun (S75 W17301-51 Janesville Road: Westwood Centre) for a loan in the amount of $100,000 and a grant in the amount of $10,000 subject to a second mortgage being attained on the property. Robert LeClaire seconded. Motion Passed 5 in favor. TIF 8 Request: John Jewell (S75 W17226 Janesville Road: Vacant Old Shell Gas Station Property) Lana Arrowood made a motion to approve TIF 8 request for John Jewell (S75 W17226 Janesville Road: Vacant Old Shell Gas Station Property) for an amount not to exceed $35,825. Bonnie Johnson seconded. Motion Passed 5 in favor. WEDC Connect Communities Recommendation of Approval Robert LeClaire made a motion to recommend approval for inclusion into the WEDC Connect Communities Program. Bonnie Johnson seconded. Motion Passed 5 in favor. ONGOING BUSINESS MISCELLANEOUS BUSINESS AS AUTHORIZED BY LAW Redevelopment District Developments Disc. & Other Miscellaneous Information Updates Next Meeting Date ADJOURNMENT Lana Arrowood made a motion to adjourn at 6:47 PM. Bonnie Johnson seconded. Motion Passed 5 in favor. Respectfully submitted, Kellie McMullen, Recording Secretary INTRO OF NEW CDA MEMBERS STAFF DISCUSSION We would like to welcome a few new members to the CDA tonight. First off, new appointments for Aldermanic representatives usually take place at this time of year and we are welcoming two new Alderman to the CDA. Alderman Kevin Kubacki from District 6 (a past Alderman on the CDA) and Alderman Thomas Kapusta from District 4 (a newly elected Alderman to our community and a representative of property in our Redevelopment District #2 downtown) will now join us. Also we welcome new members Dave Stevens and Barb Schroeder as newly appointed members. The rest of the team is as follows:  Bonnie Johnson  Robert LeClaire  Lana Arrowood ELECTION OF CHAIR, VICE-CHAIR & SECRETARY STAFF DISCUSSION At this time in the meeting we will take motions for each individual position for the next year (chairman, Vice -Chairman, and Secretary). Basically, the Chairman runs the meetings and discusses items with staff before each meeting if need be. The Chairman can also request items on the agenda from time to time based on committee input. The Vice-Chair takes over the responsibilities of the Chairman in the Chairman’s absence. The Secretary calls out the roll call at each meeting and usually reviews our draft plans in a bit more detail for errors and omissions. NEW BUSINESS ITEM #1: Commercial Grant Request: Marx Pioneer Inn (W180 S7808 Pioneer Drive) STAFF DISCUSSION Enclosed, please find an application for the Commercial Building & Site Grant Program. The applicant is Mr. Mark Sobczak who owns the structure and property that houses Marx Pioneer Inn located at W180 S7808 Pioneer Drive. Mr. Sobczak requests a grant of $4,300 for his $8,640.80 worth of improvements. The improvements consist of adding a new monument sign with landscaping to the Pioneer frontage of his business property. A full submittal and description can be found in the supplement attached. The grant program is specifically setup to go towards the purposes below: The purpose of the Commercial Building & Site Grant Program is to provide matching grants to existing commercial buildings and sites for preservation and restoration. Further, the program is instituted to encourage urban design excellence, integrate urban design and preser vation of Muskego’s heritage into the process of downtown redevelopment, and enhance the character of the downtown area. Grant resources should produce visible changes to commercial buildings and commercial sites. Since funding sources are limited, prior ity will be given to projects demonstrating the most substantial impact on building and neighborhood aesthetics. Since the property is in a Redevelopment District and due to completing aesthetic improvements, staff believes that the submittal meets the purposes set forth in the adopted grant program. The request is for more than the $3,000 maximum though that is in the City’s adopted program. The program does however allow more than $3,000 per the following text: NOTE: While the grant amount stated above has a maximum of $3,000 allowed, actual amounts approved are subject to change by the approval of the CDA and Common Council on a case-by-case basis. Examples of allowing more than the stated maximum amount may include projects that demonstrate a benefit to the community and the surrounding area, projects that may set the tone for an area, projects that may be a catalyst for other redevelopments/developments in the area, and/or projects providing a considerable percentage match above the needed minimum of 50%. It will be up to the CDA if the project meets the requirement above to allow more than the $3,000 maximum. It may be important to note that while this request only is about a new monument sign, Mr. Sobczak has done many other improvements on the property in the recent years and intends to complete more which he can discuss more about at the meeting. NEW BUSINESS ITEM #2: Commercial Grant Request: Max A. Sass & Sons Funeral Home (W173 S7629 Westwood Dr) STAFF DISCUSSION Enclosed, please find an application for the Commercial Building & Site Grant Program. The applicant is Mr. Mike Kremski who runs the Max A. Sass and Sons Funeral Home in Muskego located at W173 S7629 Westwood Drive). Mr. Kremski requests a grant of $15,000 for his $69,268 worth of improvements. The improvements consist of completely rehauling the existing parking lot with a new resurface ($59,900) and addition of new landscaping ($9,768). A full submittal and description can be found in the supplement attached. The grant program is specifically setup to go towards the purposes below: The purpose of the Commercial Building & Site Grant Program i s to provide matching grants to existing commercial buildings and sites for preservation and restoration. Further, the program is instituted to encourage urban design excellence, integrate urban design and preservation of Muskego’s heritage into the proce ss of downtown redevelopment, and enhance the character of the downtown area. Grant resources should produce visible changes to commercial buildings and commercial sites. Since funding sources are limited, priority will be given to projects demonstrating the most substantial impact on building and neighborhood aesthetics. Since the property is in a Redevelopment District and due to completing aesthetic improvements, staff believes that the submittal meets the purposes set forth in the adopted grant program. The request is for more than the $3,000 maximum though that is in the City’s adopted program. The program does however allow more than $3,000 per the following text: NOTE: While the grant amount stated above has a maximum of $3,000 allowed, actual amounts approved are subject to change by the approval of the CDA and Common Council on a case-by-case basis. Examples of allowing more than the stated maximum amount may include projects that demonstrate a benefit to the community and the surrounding area, projects that may set the tone for an area, projects that may be a catalyst for other redevelopments/developments in the area, and/or projects providing a considerable percentage match above the needed minimum of 50%. It will be up to the CDA if the project meets the requirement above to allow more than the $3,000 maximum. It is important to note that many of our Commercial Grants awarded have been anywhere from 2:1 to 6:1 average ratio of petitioner dollars versus city incentive dollars. The requested $15,000 represents a ratio of 4.6:1 at this time. Given that replacement of driveways is somewhat a general maintenance item we might want to look at funding a portion of the parking lot ($3,000-$8,000) and at least 50% of the landscaping ($4,884) which may result in a grant around a range of $7,884 - $12,884). NOTE: The fencing from the rear of the property in the picture to the right will be updated and fixed as part of the project and the dumpsters will be removed. NEW BUSINESS ITEM #3: TID 8 Grant Request: Muskego Mobil (S73 W16680 Janesville Road) STAFF DISCUSSION Enclosed, please find an application for a grant within the confines of the city’s tax increment district (TID) #8. The applicant is Mr. Hardip (Hardi) Singh Bhatti who owns the structure and property that houses Muskego Mobil located at S73 W16680 Janesville Road. Mr. Singh Bhatti requests a grant of $25,000 for his $41,155 worth of improvements. The improvements consist of the following below. A full submittal and description can be found in the supplement attached.  Demolition of the front of the main building by removing some of the windows and the existing metal panel siding. Some demo on the west façade as well.  Add new windows on the front façade.  Add new brick to the front façade that matched the brick on the back half of the building.  Add same new brick to the columns of the gas pump overhang.  Add brick to the monument sign base to match brick on rest of buildings. As the CDA may know we have treated pro perties within the TID 8 in the downtown a bit differently when it comes to grant and loan requests. The city amended the TIF 8 back in 2012 to include more properties along Janesville Road to the west of Lannon and to the east of the library. The TID amendment was specific that the city had over $375,000 of leftover TID monies that we wanted to use for redevelopment projects that would spur new tax base and that could be used for grants/loans similar to our Commercial Building and Site Grant/Loan Programs. Since this site is within the TID 8 boundary we can use the TID 8 monies for any grants requested rather the usual funds used for other grants/loans that we’ve given for properties outside the TID 8. However, we usually want to apply the same principles that the adopted Commercial Building & Site Program implores. Thus, the Commercial Building & Site Grant Program offers grants to petitioners that meet the following criteria below: The purpose of the Commercial Building & Site Grant Program is to provide matching grants to existing commercial buildings and sites for preservation and restoration. Further, the program is instituted to encourage urban design excellence, integrate urban design and preservation of Muskego’s heritage into the process of downt own redevelopment, and enhance the character of the downtown area. Grant resources should produce visible changes to commercial buildings and commercial sites. Since funding sources are limited, priority will be given to projects demonstrating the most substantial impact on building and neighborhood aesthetics. It is important to note that Mr. Singh Bhatti has done many other improvements on the property in the recent years and intends to complete much more (interior and exterior) which he can discuss more about at the meeting. Also, the city did allow $3,000 as part of the Commercial Grant Program back in 2011 as a matching grant to repaint the whole structure and aid in landscape improvements. The TID 8 currently has a balance of $300,000+ that can go for grants related to the betterment of the district. Recently the city used some of these TID 8 monies for incentives for Niko’s Café ($75,000 loan/$7,500 grant), John Jewell building ($100,000 loan/$22,500 grant), and the Westwood Centre ($100,000 loan/$15,000 grant). In all, staff believes that the level of improvements is substantial and meets the expectations of a grant for the aesthetic improvement of the properties on Janesville Road. Given that we still want to be involved in other projects along TID 8 with this money staff suggests that a bit smaller amount be awarded and definitely less than or equal to 50% of the anticipated project costs to be consistent with past approvals. Perhaps around a range of $10,000-$15,000. Structural façade improvements are of course more able to produce tax base than landscape or site improvements which is a plus. Staff recommends approval of this TID 8 grant as the monies were set aside specifically for these tax base producing purposes back when the TID 8 was amendment to include this property in 2012. NEW BUSINESS ITEM #4: TID 8 Grant Request: DeWinter Eye Care (SW Corner of Janesville Road & Bay Lane Drive) STAFF DISCUSSION Enclosed, please find an application for a tax increment district (TID) 8 grant. The applicants are Dan and Judy DeWinter who own the DeWinter Eye Care on Janesville Road and who have recently received approvals to build a new eye care center on the SW corner of Janesville Road and Bay Lane Drive. The DeWinters request a grant of $75,000 for their ~$1,600,000+ worth of improvements. The improvements consist of redeveloping the vacant corner parcel on the SW corner of Janesville Road and Bay Lane Drive into a new state of the art 6,010 SF office facility on .61 acres. See pictures of the site plan and architecture herein. The resulting project will be an excellent gateway building to the east end of the City’s downtown area and Redevelopment District #2. As stated in the Mobil grant above, the city has treated properties within the TID 8 in the downtown a bit differently when it comes to grant and loan requests. The city amended the TIF 8 back in 2012 to include more properties along Janesville Road to the west of Lannon and to the east of the library. The TID amendment was specific that the city had over $375,000 of leftover TID monies that we wanted to use for redevelopment projects that would spur new tax base and that could be used for grants/loans similar to our Commercial Building and Site Grant/Loan Programs. Since this site is within the TID 8 boundary we can use the TID 8 monies for any grants requested rather than the usual funds used for other grants/loans that we’ve given for properties outside the TID 8. However, we usually want to apply the same principles that the adopted Commercial Building & Site Program implores. Thus, the Commercial Building & Site Grant Program offers grants to petitioners that meet the following criteria below: The purpose of the Commercial Building & Site Grant Program is to provide ma tching grants to existing commercial buildings and sites for preservation and restoration. Further, the program is instituted to encourage urban design excellence, integrate urban design and preservation of Muskego’s heritage into the process of downtown redevelopment, and enhance the character of the downtown area. Grant resources should produce visible changes to commercial buildings and commercial sites. Since funding sources are limited, priority will be given to projects demonstrating the most substantial impact on building and neighborhood aesthetics. The grant requested would be the largest downtown grant that the city would have approved, but the injection of developer dollars in this project and the impact of tax base and downtown perception is also the greatest. Since the property is in a Redevelopm ent District and due to completing a whole development in the city’ downtown confines, staff believes that the submittal meets the purposes set forth in the adopted grant program. Further, aiding in incentives to this property is looked upon very fondly in our existing TID 8 as the improvements will inject a great deal of tax base that will help the overall tax increment district get paid off faster. NOTE: The Firestone property across the street currently paid taxes of $21,000+ back in 2014. The DeWinter parcel has been tax exempt for the past few years as it was Waukesha County owned. The TID 8 again currently has a balance of $300,000+ that can go for grants related to the betterment of the district. Recently the city used some of these TID 8 monies for incentives for Niko’s Café ($75,000 loan/$7,500 grant), John Jewell building ($100,000 loan/$22,500 grant), and the Westwood Centre ($100,000 loan/$15,000 grant). Staff will note that the petitioners worked with staff in looking at a loan as well but i t was found that a grant would create less administration in the long run for both parties. Further the petitioners would have been looking for monies if a combination of the grant and loan were requested anyway. In all, the ratio of developer dollars vs. city incentive dollars is approximately a 21:1 ratio! This ratio is far above past grant projects approved of which staff can share those examples at our meeting. Staff recommends approval of this TID 8 grant as the monies were set aside specifically for these tax base producing purposes back when the TID 8 was amendment to include this property in 2012. NEW BUSINESS ITEM #5: Revolving Loan Fund Request: Alpha Plastics Solutions, Inc. (S82 W19362 Apollo Drive) STAFF DISCUSSION Please find enclosed in the supplement an RLF application from Alpha Plastics for the purchase of capital equipment and inventory for the business located at S82 W19362 Apollo Drive. The purchases would include the following equipment: chiller, switchgear, compressor, and racking. As per policy, our representative from the Southeastern Regional Planning Commission (SEWRPC), Mr. John Meland, has put together a cover letter explaining th e application and contingencies of the loan recommended. Overall, $200,000 of City RLF monies is requested as part of a combined $480,000 loan/equity package consisting of $200k City and $280k in owner’s equity. The loan will be dependent that Alpha Plastics brings in ten (10) new fulltime equivalent jobs to the community of which 51% of the jobs must be for low to moderate income individuals. The term of the city loan would be 5 years with deferred principal payments for 12 months at an interest rate of 1.625%. Interest-only payment would be made on a monthly basis during the deferral period. The city usually requires security in the form of around 50-75% of whatever loan amount is requested. In this case the city would have available: 1) a Letter of Credit of $140,000 (70%); 2) A second mortgage on the equipment, accounts receivable, and inventory; and 3) The personal guarantee of the three shareholders. Overall, staff believes that the proposal outlined is more than adequate and recommends approval subject to Mr. Meland’s stated contingencies from his letter attached herein. A couple notes:  Alpha Plastics received an RLF loan from the city back in 2008 for $200,000. This loan went towards the purchase of capital equipment at that time and required 10 full time equivalent jobs. Alpha since hired more than the requirement of jobs and paid off the loan ahead of the seven (7) year schedule.  The amount requested tonight is more than the usual $100,000 maximum that the adopted RLF program discusses. However, the city is allowed to grant more than $100,000 at their discretion should they see fit, as was done for Alpha in 2008. Staff finds the loan to be in an approvable form and looks forward to Alpha Plastics expansion and addition of new employees. Staff believes that the $200,000 amount of the proposed loan be allowed to Alpha for a few reasons:  The RLF is rarely used.  Alpha has shown a history of making these loans work.  The loan comes with sureties to create 10 full time equivalent jobs of which 51% will go to low to moderate income individuals.  The RLF monies are in discussion by the state to have a “pooling” system where all the allotted RLF monies from each community in a County would be pooled into one fund administered by the County. If this happens, a city like Muskego, who uses their RLF monies regularly may end up losing monies to other businesses in other communities. Thus it is advantageous to use as much of our RLF monies to date so Muskego can also then utilize the pool of monies should this system take place in the near future. For CDA reference, The Revolving Loan Fund now has approx. $438,750 in it due to a few loans recently being paid off. The last loan awarded was in 2013. The past loans the City has given are as follows: 2013: Haven Salon and Spa up to $100,000 2009: DK Motors (Napa Auto) up to $80,000 2008: Alpha Plastics up to $200,000 2006: Stella And Chewy’s LLC $100,000 2005: Animal Doctor, Inc. $100,000 2003: Gorski Inc. $46,700 DENIED ONGOING BUSINESS ITEM #1: Tess Corners Redevelopment District (#1) Implementation STAFF DISCUSSION -Business Retention Surveys and breakfast meeting update. -Staff real estate sign idea and discussion. ONGOING BUSINESS ITEM #2: Downtown Redevelopment District (#2) Implementation STAFF DISCUSSION -We received an email that the City of Muskego will be accepted as a Connect Community from the Wisconsin Economic Development Corporation in this next month. This should help us plan and promote our downtown and redevelopment district #2 as the program offers the following below. Connect Communities program participants will have immediate access to experienced staff within the Wisconsin Economic Development Corporation (WEDC) and to the leaders within the Connect Communities Network. Program services include:  A ListServ/network group to get new ideas from staff and other participating Connect Communities  Participation in Main Street Executive Director Workshops with a focus on downtown revitalization topics  An on-site visit from one of WEDC’s community development staff to assist in identifying needs and offering assistance  Training for your downtown director or board president  Regional roundtable discussion groups on pertinent topics held once every year  Possible opportunities to link college/university student projects to your downtown/urban commercial district needs  Roundtable discussion groups on pertinent topics held twice per year  Access to WEDC’s online downtown development library  Access to resources and training materials that have been developed for Wisconsin Main Street communities  Invitation to the annual Main Street Awards Program, plus eligibility to nominate a project for a Connect Communities award  Webinars/regional training ONGOING BUSINESS ITEM #3: Muskego Business Park Redevelopment District (#3) Implementation STAFF DISCUSSION -Sent out the 2015 round of business retention surveys to 34 businesses within the Muskego Business Park and the Tess Corners Business Park. Received ten (10) returned surveys as of the date of this meeting (29%). Staff will share some of the outcomes of that survey at our meeting as well as some of the immediate implementation items we intend to follow up upon. One important item we discussed in the survey is if the businesses are interested in a breakfast meeting to evaluate the results of the survey and to brainstorm what the city can do to aid and retain business growth. Of the ten (10) returned surveys nine (9) thought this would be a positive idea. Given this notion, staff believes we are officially ready to plan for this. If CDA agrees staff would plan for this now in July replacing our usual July meeting. ONGOING BUSINESS ITEM #4: Mill Valley Redevelopment District (#4) Implementation STAFF DISCUSSION No movement is taking place with the quarry in New Berlin, thus there are no updates at this time from Muskego’s side . ONGOING BUSINESS ITEM #5: Marketing Plan Implementation STAFF DISCUSSION -Marketed Business Rewards Program to over 400+ brokers recently. Have one application pending and had to turn a few away. -As discussed, went thru another year of Business Retention Surveying. -Have a variety of tours/visits to local businesses by the Mayor and Community Development Director this summer. -Sent letters to all Muskego Redevelopment District businesses about grant/loans and the possible sun setting of the programs this summer. Reason we’re seeing some more apps right now! We should have a short discussion about this possible sun setting of the loan and grant program tonight. -Sent Target Industry literature to over 450+ Illinois businesses in the past month. Focused on warehousing and transportation industries with 70-200 employees. Ongoing: Many discussions with new businesses looking to make Muskego a home. Some within a TIF District and others simply looking for downtown space. Could have a Council discussion on incentives for one particular new business soon. MISC. BUSINESS ITEM #1: Redevelopment District Development & Other Miscellaneous Information Updates -Update on Westwood Centre TIF 8 loan/grant -Ingold property rezoning within Redevelopment District #2 -Update on Old Shell Gas Station parcel grant project MISC. BUSINESS ITEM #2: Next Meeting Date Tuesday July 21st at 6 pm unless an earlier date is needed for any grant/loan requests . May be breakfast meeting instead at which time staff will contact CDA for availability. Approximate CDA Budgets 2011 Budget Existing Supplies and Expenses $500 Professional Services $3000 Attorney $5000 Property Sale Balance $91,000 Existing RLF Fund Balance: $438,754.50 Possible after tonight $238,754.50 (Alpha loan) Existing RD #3 Balance: $52,248.03 TIF Residual Balance: ~$643,000 Reductions tonight possible from Marx and Max A. Sass proposals TIF 8 Balance: ~$365,000 Possible after tonight $265,000 (Dewinter & Mobil grants)