Joint Review Board Packet - 4/6/2016
CITY OF MUSKEGO
JOINT REVIEW BOARD AGENDA
April 6, 2016
7:30 AM
Muskego City Hall, W182 S8200 Racine Avenue
CALL TO ORDER
ELECTION OF CHAIRPERSON
ELECTION OF MEMBER AT LARGE
DISCUSSION OF TAX INCREMENTAL DISTRICT BOUNDARY AND PROJECT PLAN
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, MUSKEGO CITY HALL, (262) 679-4136.
CITY OF MUSKEGO, WISCONSIN
TAX INCREMENTAL DISTRICT NO. 11
PROJECT PLAN
PREPARED BY:
THE CITY OF MUSKEGO, WI.
&
VON BRIESEN & ROPER
&
HUTCHINSON, SHOCKEY, ERLEY & CO.
MARCH 23, 2016
INTRODUCTION
Tax Increment District No. 11 (the “District) is being formed as a mixed use tax increment district. It is
comprised of approximately 10.75 acres that will be developed with a combination of 3 apartment
buildings and 53,500 square feet of commercial space. The area is what was once known as the
Parkland Mall. The property is currently assessed as agricultural with a value of approximately $2,300.
The District is being formed to encourage the development of the now vacant property into more
appropriate uses for the Muskego, WI downtown area and to increase the tax base.
SECTION I
EXISTING USES AND CONDITIONS
The land in the District is currently zoned B-4 Highway Business District but is used as agricultural at this
time. Zoning changes will be required.
SECTION II
LIST THE TYPE, NUMBER AND LOCATION OF ALL PROPOSED PUBLIC WORKS AND
IMPROVEMENTS IN THE DISTRICT AND OUTSIDE THE DISTRICT
Tax Incremental District No. 11 in the City of Muskego is being created to promote commercial growth
within the City. The following Projects are the required improvements to accommodate the
development within the District (Further illustrated in plans in Section III). Any costs directly, or
indirectly, related to the public works are considered “Project Costs” and are eligible to be paid with tax
increment revenues of the District. The projects and Project Costs include:
A. Grading, Stormwater Management, and Roads
Grading: Mass grading of the entire 10+ acre site is required to bring the grades at levels ready
for pad-ready development. Further, over excavation costs are extreme for this project due to
old material left in the soils from the previous building demolition that existed on the site over
the past thirty years. Over excavation costs are high due to high water table in the general area
as well.
Stormwater Management: Removal of old stormwater pipes from previous development is
required. Installation of new stormwater pipes and construction of one regional pond to occur in
the northeast portion of the site. Pond to manage stormwater onsite at a higher rate than
previous development.
Roads: Various internal access roads for the entire mixed use site including main internal access
road traversing from Janesville Road to Lannon Drive. Internal updates to adjoining properties
that will have cross access easements to the east. Major improvements to the public roads
accessing the site in Lannon Road to the west and Janesville Road to the south (turning lanes,
lighting, brick pavers).
B. Sewer/Water City Connection
Sanitary Sewer: New main extensions are required with one extending from the west off of
Lannon Drive along main internal access road to feed main commercial structures. Laterals
required for commercial grocer structure. Sanitary main extending west from Lannon Drive to
support north development.
Water: Main loop connections to occur throughout site for proper water and fire support for all
structures in project. Loops required to adequately support surrounding neighborhoods as well.
Water main extensions to occur along western border of project along Lannon Drive. Water
main connection from east existing water main to Lannon Drive west water main via the north
half of the development.
C. Landscaping, Lighting, and Signage
Various internal landscaping across 10+ acre site for beautification purposes. Mainly along main
access drive and along the frontage of Lannon Drive and Janesville Roads. Various internal
signage needs for directional and main business signage needs. Internal site lighting related
costs.
D. Predevelopment, Inspection, Survey
Miscellaneous soft costs and inspection costs during the course of the project relating to plan
approvals for zoning and civil plans, construction inspections, and various survey documentation
needs.
E. Contingency & Construction Management
Various construction related contingencies are expected in excess of 10% of project costs as well
as unknowns due to the poor soil conditions on the project site.
F. One-half Mile Radius
The Project and Project Costs will include public infrastructure work and associated costs within
a one-half mile radius of the District boundaries.
SECTION III
PROPOSED IMPROVEMENTS AND USE IDENTIFICATION AND LOCATION
The project plans (preliminary set of civil plans) denoting the improvements discussed in Section II are
found in Appendix B.
SECTION IV
DETAILED LIST OF ESTIMATED PROJECT COSTS
A. Grading, Utilities and Roads $1,522,400
B. Sewer/Water City Connection Costs $570,000
C. Landscaping and Signage $75,000
D. Street Lighting $70,000
E. Predevelopment, Survey, Inspection $395,000
F. Contingency & Construction Management $233,800
G. City Administration $375,000
H. Developer Incentive (pay as you go Municipal Revenue Obligation) $4,000,000
Total $7,241,200
These project costs are preliminary estimates only. The City reserves the right to increase these costs
related to changes in circumstances or market conditions subsequent to the date of this project plan.
The City also reserves the right to change the allocation of project costs among the various line items.
These changes may be made without amending the project plan. The estimated project costs have been
based upon currently available information and are not intended to be limitations on the amount of
project costs which may be incurred in the course of the implementation of this project plan. The City
retains the right to delete projects and project costs without amending the project plan.
The project costs will be incurred as construction and development proceeds within the District. It is
anticipated that the project costs will be incurred within three years of the date of this project plan.
The City may provide incentives and cash grants to the developer to reimburse the developer for costs
incurred by developer related to the construction of improvements with in the District.
SECTION V
ECONOMIC FEASIBILITY STUDY
The project costs listed in Section IV will be paid for through a combination of City contributions and
developer incurred costs. The City will contribute a total of $2,866,000 to the project costs. This will
require a borrowing of $3,075,000. The remaining costs will be paid by the developer and will be
recovered from future tax increments through a Municipal Revenue Obligation (MRO) up to a max imum
of $4,000,000. It is anticipated that the City’s borrowing will be paid first (final maturity estimated to be
2026) followed by the MRO payments to the developer. As a mixed use District, the District has a
maximum term of 20 years. Assuming the development occurs in accordance with the projections and
financial analysis set forth in this Project Plan and the project costs are reasonably consistent with the
current projections set forth in Section IV, it is currently estimated that all costs would be paid within
approximately 15 years and the District would be terminated in 2032.
CITY OF MUSKEGO
TtD NO.11
ESTI MATED TAX INCREMENTS
YEAR
INCREMENTAL
VALU
5t3,292,832
23,t78,L65
31,940,000
F
TAX
INCREMENT
20!7
2018
20L9
2020
202L
2022
2023
2024
2025
2026
2027
2028
2029
2030
203L
2032
2033
2034
2035
2036
S219,450
382,439
527,OLO
537,550
548,301
559,267
570,452
581,861
593,498
605,368
6t7,476
629,825
642,422
655,270
668,376
68L,743
695,378
709,286
723,47L
5!l,]"4B,M3
s8.338.s6s
Constant tax rate of 516.50
Annualinciease in incrementof 2Yo
Developer values daled 3/ 4l L6
CITY OF MUSKEGO
Debt Service Schedule
T.I.D. NO. 11
$3,075,000 BANS
Date Princloal Couoon lnterest Total P+l Fiscal Total
06/01/2016
t2t0u20t6
0610U20t7
t2l0ll20r7
06/0u20t8
49,968.75
49,968.75
49,968.75
49.968.75
49,968.75
49,968.75
49,968.75
3,124,968.75
49,968.7s
99,93'1.50
3.07s.000.00 3.250%
r2t0t/2018 3,r24,968.75
Total $3,075,000.00 $r99,E75.00
Yield Statistics
Bond YearDollars $6. l 50.00
Averase Life 2.000 Years
Average Couoon 3.2s00000%
Net Interest Cost (NIC)3.2500000%
True Interest Cost (TIC)3.2500000%
Bond Yield for Arbitrase Purposes 1.4007523%
All Inclusive Cost (AIC)3.2500000%
IRS Form 8038
Net Interest Cost 2.2930374%
Weiehted Averase MaturiF 2.000 Years
TID 11 BANSTAX I SINGLEPURPOSE | 3t7t2016 | 10:194M
Hutchinson.Shockey. Erley & Co
Paqe 1Putrlrr: Fur¡¡nr;e
CITY OF MUSKEGO
Debt Service Schedule
REFINANCING OF THE
TID NO. 11 BANS
Date Princi nal Couoon lnterest Total P+l Fiscal Total
04/0U2018
0410t/20t9
t0/0U2019
04t0r/2020
r0t0t/2020
325,000.00 4.000;,
4.000%
123,000.00
s5,000.00
5s,000.00
47.000.00
448,000.00
55,000.00
455,000.00
47.000.00
400,000.00
503,000.00
502.000.00
04t01/2021
t0/01/2021
04/01/2022
t0t0t/2022
04101/2023
400,000.00
425,000.00
425,000.00
4.000%
4.000o/o
4.000"/"
47,000.00
39,000.00
39,000.00
30,500.00
30.500.00
447,000.00
39,000.00
464,000.00
30,500.00
455,500.00
486,000.00
494,500.00
r0l0t/2023
04/01/2024
t0/0t/2024
04/01/2025
ro/ov202s
450,000.00 4.000o/o
4.000%
22,000.00
22,000.00
13,000.00
13,000.00
3 500 00
22,000.00
472,000.00
13,000.00
488,000.00
3-500.00
477,500.00
48s,000.00
475,000.00
491-s00,00
04101/2026
t0t0t/2026
17s,000.00 4.0000/"3,500.00 178,500.00
178,s00.00
Total $3,o75,ooo.oo $543poo.oo $3,618,000.00
Yield Statistics
Bond Year Dollars $1 3-s75.00
Aver¿ge Life 4.415 Years
Averaqe CouDon 4.0000000%
Net Interest Cost (NIC)4.0000000%
True Interest Cost (TIC)3.9902594%
Bond Yield for Arbitrage Purposes 3.9902594%
All Inclusive Cost (AIC)3.9902594%
IRS Form 8038
Net Interest Cost 4.0000000%
Weighted Aver¿ge Maturity 4.415 Years
TID 11 BONDS I SINGLEPURPoSE | 31712016 I 10:184M
Hutchinson.Shockey. Erley & Co
Page 1Puirlrc Frnance
SECTION VI
DESCRIPTION OF FINANCING METHODS
Under Wisconsin Law there are several methods of borrowing, some of which apply the debt against the
City’s statutory debt limit. The feasibility of financing any project at any given time by any particular
method will be determined in the future, based on the City’s fiscal situation, anticipated non -capital
needs, interest rates and the amount borrowed.
Possible funding sources include:
A. General Obligation Debt
B. Water and Sewer Revenue Bonds
C. Lease Revenue Bonds issued by the CDA
D. State Grants
E. Municipal Revenue Obligation
It is anticipated that developer agreements between the City and property owners, lessees or
developers will be in place prior to major public expenditures and for any cash grants/developer
incentives. These agreements may also provide for developer guarantees or payment in lieu of
development.
SECTION VII
PROPOSED CHANGES IN ZONING ORDINANCES AND MASTER PLAN
The City’s adopted 2020 Land Use Plan shows the parcel as commercial uses within the downtown
confines and no Comprehensive Plan amendment is required.
The current zoning is shown as B-4 Highway Business District and a change to the PD Planned
Development zoning district will be required to implement the development as proposed. The PD
zoning will allow the mix of residential and commercial uses as well as various setback and height
modifications.
SECTION IX
RELOCATION
At the present time, there are no relocation costs to be incurred by the City.
SECTION X
HOW THE CREATION OF TAX INCREMENTAL DISTRICT NO. 11 WILL PROMOTE THE ORDERLY
DEVELOPMENT OF THE CITY OF MUSKEGO
Muskego Tax Incremental District No. 11 will promote orderly development of the City of Muskego by
providing the opportunity for continued growth in the tax base, job opportunities, and cost effective
means to encourage business related development, thereby furthering the goals and policies of the
City’s adopted 2020 Comprehensive Plan, Redevelopment District #2 Plan, Marketing Plan, and
Economic Development Strategic Plan.
A. City of Muskego Adopted Plans
The City of Muskego has been building a downtown identity and brand for the past decade while
anticipating a development for this project in the heart of the downtown to pull everything together.
Here is a sample of the many adopted plans in Muskego that incorporate the need for the project
discussed as part of this TID #11 Project Plan.
2020 Comprehensive Plan: The Comprehensive Plan was adopted under the Wisconsin Statute Smart
Growth regulations back in 2008. The city looked to the downtown Janesville Road area as being a focal
point during the planning years for this plan. In particular, the property discussed for TID #11 is
specifically discussed as a “desired development area” in the plan. The following is written in the Comp
Plan in relation to downtown development:
Downtown Note (Shown as Note #4 on 2020 Future Land Use Map)
Much discussion in this document relates to the future development of the City’s downtown. The intent of
the Downtown note is to promote development and redevelopment in what is known as Muskego’s
downtown. The general area for the downtown is those properties found along Janesville Road from
Pioneer Drive to Bay Lane Drive. The downtown DDA was created to allow the revival and redevelopment
of these properties in order to create new opportunities for the parcel owners. This area is intended to
encourage mixed-use, compact development that is sensitive to the environmental characteristics of the
land and facilitates the efficient use of services. The category diversifies and integrates land uses within
close proximity to each other, and it provides for the daily retail and customer service needs of the
residents. Land uses and development in the downtown area should closely follow the land uses noted on
the Land Use Map, although an endless amount of other opportunities exist for properties in this area.
The City should utilize the Community Development Authority and Mayor’s Task Force on Economic
Development in implementing the redevelopment of the via the concepts noted in the Redevelopment
District #2 Plan and the various Mayor’s Task Force Downtown Committee Reports.
Lastly, as part of the 2020 Comprehensive Plan development a variety of surveys and public hearings
took place in which the overwhelming response was to work on ways to develop this site as part of the
proposed TIF #11 parcel.
Redevelopment District # Plan - Downtown: The Redevelopment District #2 Plan is an extension of the
City’s Comprehensive Plan that digs deeper in the desired development pattern of the city’s downtown
area. The redevelopment plan has been adopted since 2002 and has direct recommendations on the
orderly development of the proposed parcel development for TIF #11. The following is found in that
plan (key areas underlined with special note on the financing recommendations at the end):
ACDO #3 “DOWNTOWN REVIVAL”
ACDO #3 is considered the central downtown of the City of Muskego. The area with the most redevelopment potential
is found along the north side of Janesville Road between Lannon Drive and Parkland Drive and includes the 10-acre
former Parkland Mall site. The area is currently comprised of single-family residential uses along the west side of
Lannon Drive. Commercial zoning and land uses are found in place for the parcels abutting Janesville Road, which
includes the former Parkland Mall site.
Redevelopment in this area should seek to enhance the image, profile, and use of Downtown Muskego. Given its
central location, the site plays a crucial role in the future viability of the Janesville Road commercial district. Equally
important, the site provides an opportunity to begin to reshape Downtown Muskego from a disparate collection of
aging commercial structures to a functional and symbolic city center befitting a community of over 20,000.
New development at the former Parkland Mall site can help set higher standards of design with a renewed emphasis
on community image and the cost effective provision of public services. Moreover, a quality project at this location
will provide the downtown area, and indeed the entire community, with an identity reflecting the local quality of life
and the affluence of city households – in short, a visual and economic anchor for the currently attenuated and
uncentered Janesville Road corridor. Widely accepted development and planning principles suggest that new
development should help the downtown and City compete in an increasingly competitive and quality-conscious real
estate environment, while providing alternative housing and shopping opportunities in close proximity.
The vision for the Parkland Mall site should encompass a mixed-use development utilizing traditional neighborhood
development standards. Area residents should feel a new sense of place, as a development must provide a downtown
identity. Commercial and residential uses are envisioned providing a one-stop convenience of institutional and public
services. Overall, this project should demonstrate market driven principles that work within the Muskego’s economic
landscape.
The following key planning elements are to be used as a guide for the development/redevelopment of the portion of
this area that abuts Janesville Road (Note: A development may include other elements not listed OR may exclude some
of the elements below as any new development should be market driven):
Design Character
Traditional town center/modern ‘main-street’
Buildings squarely facing the street
Buildings closer to street, parking behind
Pedestrian scale – walkable, accented storefronts
Taller building profiles – downtown centerpoint and landmark
Variable roof-lines.
Transitional massing blending with surrounding architecture
Sense of place/downtown identity
Use Mix
Possible upper end condos (professionals & ‘empty nesters’)
Destination and convenience retail
Smaller floorplate retail
Shared parking
Multiple purpose trips
Convenience
Density
Possible Mid-Rise heights: Somewhat higher than City norm
Built in consumer market for downtown businesses
Greater TIF revenues
More efficient public services/utilities
Activity center
Downtown anchor and landmark
As part of ACDO #3 “Downtown Revival”, these measures may take place:
1. Deriving an overall concept plan for the City to promote may be key to seeing the redevelopment potential of this
area through. Formulizing an overall concept plan along with ways to finance the plan is critical. Financing may
include the use of a TIF District.
2. Future decision-making bodies should be sensitive to how future lake access here is developed in order to assure
that the access points work well with surrounding land uses.
3. Parcels may have the potential to be purchased by the community as funds become available, development takes
place, and/or properties go up for sale. Community participation should only be used in acquisitions associated
with a larger adopted development plan for the area.
1. Redevelopment potential of this area both in general, and parcel specific, should be continually promoted with
the property owners.
2. Various financing methods should be used to spur redevelopment with the individual owners including property
specific development based incentives and loan/grant programs.
3. Various financing methods should be investigated to make a redevelopment with lake access/views a reality,
including the use of TID financing.
Marketing Plan/Economic Development Strategic Plan: It is important to note that the city has an
adopted Marketing Plan and Economic Development Strategic Plan that promote the orderly
development of the parcel proposed for development in this TIF #11 Plan. The desired development
requirements are similar to the items discussed above in the Comp Plan and Redevelopment Plan.
B. Cost Effective
To attract private development and investment, a City often needs to make certain public improvements
such as sanitary sewers, storm sewers, water mains, and street improvements. If the City were to buy
land for this mixed use development and make these improvements, the anticipated tax benefits might
not be great enough to justify the public expenditures. Because the land in the Tax Incremental District
is privately owned, the City will continue to collect taxes based on the valuation of that land. By creating
a Tax Incremental District, the City will be able to pay debt service on bonds issued for the pub lic
improvements from taxes collected on the increased value within the District caused by development
that occurs after the District is created. This provides the City with a means to repay its debt and
finance these public improvements, while providing the private sector with the ability to sell land at a
more attractive price to prospective businesses, which encourages more rapid development in the area.
Further, all the developer costs, agreed to be paid by the TIF from the City, are guaranteed in one form
or the other by the developer.
C. Promotes Increased Business Development
Tax Incremental District No. 11 will be in the heart of Muskego’s downtown. As noted above the city has
worked in promoting the development of the downtown in a way to incorporate a new sense of place
while desiring to redevelop the supporting business properties as well. Janesville Road was fully
reconstructed with this sense of place in mind during 2012 and the city spent over $5 mil for
beautification and branding efforts as part of that reconstruction. Grant and loan programs have been
formed since 2009 to aid new commercial developments and redevelopments in the downtown as a
partner to the beautification efforts that have been completed. Grants have amounted to $300,000+
compared to over $3.5 mil in private investment and loans have amounted to $333,000 compared to
$1.3 mil in private investments. Financing as part of the TIF #11 will continue these financing aid
initiatives that will support both new businesses in the TIF #11 as well as supporting the expansion and
redevelopment of businesses in the surrounding downtown area.
D. Job Creation
It is anticipated that the construction of the 53,000+ square feet of commercial in the proposed project
has the potential to create over 150 jobs. The effect of this project for jobs in the neighboring
downtown Muskego properties is unmeasurable. The jobs will range from hourly retail/restaurant
positions to managerial positions.
SECTION XI
LEGAL OPINION
TAGLaw International Lawyers
William E. Taibl
Direct Telephone
414-287-1213
wtaibl@vonbriesen.com
March 22, 2016
Mr. Jeff Muenkel
City of Muskego
W182 S8200 Racine Avenue
Muskego, WI 53150-0749
Re: Project Plan for Tax Incremental District No. 11 for the City of Muskego, Wisconsin
Dear Mr. Muenkel:
We have acted as attorneys for the City of Muskego in connection with the proposed creation of Tax
Incremental District No. 11 of the City of Muskego (“District”) and the review of the Project Plan for the
District dated April ___, 2016 (“Project Plan”).
In connection with the creation of this District, we have reviewed the Project Plan, and such other
documents as we deem necessary to enable us to give this opinion.
Based upon our review, and reliance on the accuracy of the statements set forth in the Project Plan, it is
our opinion that the Project Plan is complete and complies with Section 66.1105 of the Wisconsin
Statutes.
Very truly yours,
von BRIESEN & ROPER, s.c.
William E. Taibl
WET:jrp
26328303_1.DOC
SECTION VIII
NON-PROJECT COSTS
There are no non-project costs.
APPENDIX A
LEGAL DESCRIPTION AND PARCEL NUMBERS
All that part of the Northwest ¼ and the Southwest ¼ of Section 10, Town 5 North, Range 20 East, City of
Muskego, Waukesha County, Wisconsin, bounded and described as follows: Commencing at the
Northwest corner of a property identified by Tax-key no. 2198-990-003 said point also being the point
of beginning; thence Easterly along the North line of said property 106.00 feet, to the Easterly line of
said property; thence Southerly along said East line extended 295 feet more or less, to the South right of
way line of Janesville Road (C.T.H. “L”); thence Northeasterly along said South line 710 feet more or less
to the Northeast corner of Lot 4, Certified Survey Map No. 10029; thence Northerly 120 feet more or
less to the Southwest corner of a property identified by Tax-key no. 2198-984-001; thence Northerly
along the West line of said property 417.31 feet to the North line of said property, said point also being
the corner of a property identified by Tax-key no. 2198-984; thence Southwesterly along a North line of
said property 16.09 feet to an Easterly line of said property; thence Northwesterly along said Easterly
line of 28.22 feet to a North line of said property; thence Southwesterly along said North line 160.00
feet, to an East line of said property; thence Northwesterly along said East line 210.00 feet, to a North
line of said property; thence Northwesterly along said North line 293.37 feet, to a West line of said
property; thence Southerly along said West line 200.00 feet to a North line of said property; thence
Westerly along said North line 100.00 feet to the Easterly Lannon Drive right of way line; thence
Southerly along said right of way line 541.84 feet, to the point of beginning.
Parcel known as Tax Key Number MSKC2198984
APPENDIX B