Community Development Authority Packet - 4/18/2017
CITY OF MUSKEGO
COMMUNITY DEVELOPMENT AUTHORITY
AGENDA
April 18, 2017
5:00 PM
Muskego City Hall, W182 S8200 Racine Avenue
CALL TO ORDER
PLEDGE OF ALLEGIANCE
ROLL CALL
STATEMENT OF PUBLIC NOTICE
APPROVAL OF THE MINUTES OF NOVEMBER 15, 2017.
PUBLIC INPUT
NEW BUSINESS
1. Revolving Loan Fund Request: Legacy Landscaping (S81 W18510 Gemini Drive).
ONGOING BUSINESS
MISCELLANEOUS BUSINESS AS AUTHORIZED BY LAW
1. Community Development Department Status Update
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
November 15, 2016
6:00 PM
Aldermen’s Room – Upper Level of City Hall,
W182 S8200 Racine Avenue
CALL TO ORDER
Director Muenkel called the meeting to order at 6:00 PM.
PLEDGE OF ALLEGIANCE
Those present recited the Pledge of Allegiance.
ROLL CALL
Present: Lana Arrowood, Barb Schroeder, Ald. John Engelhardt, Ald. Borgman, and Director
Jeff Muenkel. Excused: Bonnie Johnson, Joseph Boschert and Dave Stevens
STATEMENT OF PUBLIC NOTICE
The meeting was noticed in accordance with the open meeting laws.
APPROVAL OF THE MINUTES OF SEPTEMBER 20, 2016
Ald. Borgman made a motion to approve the minutes of September 20, 2016. Lana
Arrowood seconded.
Motion Passed 4 in favor.
PUBLIC INPUT
NEW BUSINESS
Business Park Grant Fund: Tollefsen Steel & Fabrication Inc. (S82 W18664 Gemini Drive).
Ald. Borgman made a motion to approve Business Park Grant Fund: Tollefsen Steel
& Fabrication Inc. (S82 W18664 Gemini Drive) for the amount of $5,000. Lana
Arrowood seconded.
Motion Passed 4 in favor.
Review Commercial Grant Program
Lana Arrowood made a motion to make the following changes to the Commercial
Grant Program:
1. No maintenance items can be approved.
2. Only one grant is allowed for a tenant or parcel.
3. The City attorney should add any other requirements for ineligible applicants as
needed.
Barb Schroeder seconded.
Motion Passed 4 in favor.
Loan Extension Request: SDS2 Management (S75 W17301-51 Janesville: Westwood
Centre)
Ald. Engelhardt made a motion to approve Loan Extension Request: SDS2
Management (S75 W17301-51 Janesville: Westwood Centre). Ald. Borgman
seconded.
Motion Passed 4 in favor.
ONGOING 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
MISCELLANEOUS BUSINESS AS AUTHORIZED BY LAW
Redevelopment District Development & Other Miscellaneous Information Updates
Next Meeting Date
ADJOURNMENT
Ald. Borgman made a motion to adjourn at 6:55 PM. Lana Arrowood seconded.
Motion Passed 4 in favor.
Respectfully submitted,
Kellie McMullen,
Recording Secretary
NEW BUSINESS ITEM #1:
Revolving Loan Fund Request: Legacy Landscaping (S81 W18510 Gemini Drive)
STAFF DISCUSSION
Please find enclosed in the supplement an RLF application from Legacy Landscaping for the purchase of the property in
which they are currently leasing and for the construction of a new 6,000 SF building with construction of outdoor bulk
material storage bins for the business located at S81 W18510 Gemini Drive. As per policy, our representative from the
Southeastern Regional Planning Commission (SEWRPC), Mr. John Meland, has put together a cover letter explaining
the application and contingencies of the loan recommended. Overall, $125,000 of City RLF monies is requested as part
of a combined $1,416,000 loan/equity package consisting of $1,274,400 in financing from Citizens Bank of Mukwonago
and the Small Business Administration (SBA) 504 program, $125,000 City RLF loan, and $16,600 in owner’s equity.
The loan will be dependent that Legacy Landscaping brings in seven (7) 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 10 years with deferred principal payments for 12 months at an interest rate of 2.0%.
Interest-only payment would be made on a monthly basis during the deferral period.
The collateral available to secure the loan will include personal guaranties and junior mortgages on the residences of
the two owners. More details are included in SEWRPC’s memo.
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.
Further Note(s):
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 Plastics in 2008 and 2015.
Staff finds the loan to be in an approvable form and looks forward to Legacy Landscaping expansion and addition of
new employees. Staff believes that the $125,000 amount of the proposed loan be allowed to Legacy Landscaping
based on the recommendations from John Meland of SEWRPC.
For CDA reference,
The last RLF loan awarded was in 2015.
The past loans the City has given are as follows:
2015: Alpha Plastics up to $200,000
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
MEMORANDUM
TO: City of Muskego Community Development Authority
FROM: John R. Meland, Principal Specialist
Southeastern Wisconsin Regional Planning Commission
DATE: April 13, 2017
SUBJECT: REVOLVING LOAN FUND (RLF) REQUEST
The purpose of this memorandum is to provide a summary and Commission staff analysis of the request
from Schulew LLC, dba Legacy Landscaping LLC, for a loan from the City of Muskego Revolving Loan
Fund (RLF) program.
A description of the business proposal and the findings of a Commission staff analysis based upon RLF
underwriting standards are presented below:
Background
Schulew LLC is a holding company that will purchase the real estate at S81W18510 Gemini Drive and
lease it to Legacy Landscaping LLC. Both Schulew LLC and Legacy Landscaping are owned in equal
shares by Daryl Schure and Scott Lewitzke. Legacy Landscaping is a full-service landscape business that
currently leases one of the spaces in the 4-unit building at the Gemini Drive location along with the majori-
ty of the outside paved area that is used for storage of landscaping equipment. In addition, to purchasing the
real estate, funding for this project will allow Schulew LLC to construct bulk storage bins and add a new
6,000 square foot building that will also be occupied by Legacy. The remaining tenants will lease their
space from Legacy Landscaping.
Financial statements show sales of $1.4 million in 2016 with a projected increase to $1.6 million in 2017.
Funding Request
Schulew LLC is requesting that the City provide a $125,000 RLF loan to assist with the purchase of the
real estate at the Gemini Drive location. The RLF loan would be matched with a loan from the Citizens
Bank of Mukwonago of $708,000 and a loan from the Small Business Administration (SBA) 504 program
of $566,400. The SBA 504 loan would be provided with a 12-month deferral of principal payments. In ad-
dition, $16,600 of owners’ equity would be provided (see attached RLF application).
The Company is requesting that the RLF loan be provided with a term and amortization of 10 years, a de-
ferral of principal payments for 12 months, and an interest rate of 2.0 percent. The request is consistent
with the underwriting standards for the RLF program.
W239 N1812 ROCKWOOD DRIVE PO BOX 1607 WAUKESHA, WI 53187-1607
Serving the Counties of:
TELEPHONE (262) 547-6721
FAX (262) 547-1103
KENOSHA
MILWAUKEE
OZAUKEE
RACINE
WALWORTH
WASHINGTON
WAUKESHA
-2-
The collateral available to secure the RLF loan would include personal guaranties and junior mortgages on
the residences of the two owners. The mortgage on the residence of Daryl Shure in Racine County would
be junior to a first mortgage of $116,718 on a property valued at $350,000. The mortgage on the residence
of Scott Lewitzke in Waukesha County would be junior to a first mortgage of $216,898 on a property val-
ued at $456,300.
The Company has agreed to create seven new full-time equivalent jobs in exchange for the RLF loan with
at least 51 percent of the jobs benefiting low- and moderate-income persons. The jobs would be recruited
through the Waukesha County Workforce Development Center. This job creation goal meets the require-
ments of the RLF program that requires one full-time equivalent job for each $20,000 of RLF investment.
Contingencies
Should the City decide to provide the requested financing, it is recommended that the approval be based on
the following contingencies:
1. That a $125,000 RLF loan is provided to Schulew LLC.
2. That the RLF loan is matched with at least $1,274,400 in financing from Citizens Bank of
Mukwonago and the Small Business Administration (SBA) 504 program, along with at least $16,600
in owners’ equity.
3. That the RLF loan is provided with a term and amortization of 10 years, a 12-month deferral on prin-
cipal payments, and an interest rate of 2.0 percent. Interest-only payments would be made on a
monthly basis during the deferral period.
4. That the RLF loan is secured with the collateral identified above.
5. That the Company creates seven new full-time equivalent jobs that are recruited through the
Waukesha County Workforce Development Center. At least 51 percent of the new jobs would be
provided to low- and moderate-income persons.
6. That the borrower provides to the City, or its designee, on an annual basis, semi-annual financial
statements and signed copies of the borrower’s Federal income tax return.
* * *
JRM/jm
LEGACY CDA MEMO
Enclosures
1.Business Name:
Address:
Contact Person:
Telephone No.:
2.
RLF Debt Seller Owner's
3.Source and Use of Funds Financing Financing Financing Equity TOTAL
a)Real Estate Purchase 125,000$ 924,400$ 16,600$ 1,066,000$
b)Building Construction 350,000$ 350,000$
c)Building Renovation
d)Equipment
e)Working Capital
TOTAL PROJECT COSTS 125,000$ 1,274,400$ 16,600$ 1,416,000$
4.RLF Assistance Requested:
d) Principal Deferral (months)
S81 W18510 Gemini Drive
City of Muskego Revolving Loan Fund Application
Schulew LLC, dba Legacy Landscaping LLC
$125,000
ATTACHMENT A
b) Interest Rate (percent)
c) Loan Term (years)
a) Loan Amount
Muskego, WI 53150
(262) 370-3373
Brief Project Description: Purchase of building and land and finance improvements to grow existing
Daryl Schure
12 months
landscape business.
2.0%
10 years
5.Source of Private Debt Financing
Name:Citizens Bank of Mukwonago
Address:
Contact Person:
Telephone No.:
6. Job Creation and Retention
Number Pay Range Number Pay Range
Full-Time Jobs 7.0 $15-20/hour
Part-Time Jobs
TOTAL JOBS 7.0
7.
I hereby certify that the information provided above and in the attached supporting documentation is to the
best of my knowledge true and correct.
s/ Daryl Schure 03/20/17
Signature Date
This attachment is included for reference, and is subject to change upon the availability of updated
information from the Wisconsin Department of Administration or SEWRPC.
W230 S9125 Clark Street
Big Bend, WI 53103
Jim Bodendorfer
(262) 662-3561
Date Project Will Begin:
New Jobs
Spring 2017
Retained Jobs