CM012699
COMMON COUNCIL - CITY OF MUSKEGO (Approved 2/9/99)
MINUTES OF MEETING HELD JANUARY 26, 1999
The meeting was called to order at 7:48 p.m. by Mayor De Angelis. Also present were
Aldermen Slocomb, Chiaverotti, Patterson, Pionek, Salentine, Sanders, and Woodard,
City Attorney Molter, Clerk-Treasurer Marenda, and Deputy Clerk Blenski.
The Clerk-Treasurer stated the meeting was noticed in accordance with the open
meeting law on 1/22/99 and amended on 1/25/99.
Patterson moved for approval of minutes of 1/12/99 meeting. Slocomb seconded;
motion carried.
The Clerk-Treasurer read the closed session notices.
Patterson moved to convene into closed session pursuant to 19.85(1)(e) Deliberating
or negotiating the purchasing of public properties, the investing of public funds, or
conducting other specified public business, whenever competitive or bargaining
reasons require a closed session; more specifically negotiating contract with Tess
Corners Fire Department. Woodard seconded. Attorney Molter was in attendance; the
Clerk-Treasurer and Deputy Clerk were dismissed. Motion carried 7-0.
Slocomb moved to convene into open session. Salentine seconded; motion carried 7-0.
The Mayor did not have any communications to report.
PERSONAL APPEARANCES
The Mayor stated that Dave Anderson of Ehlers & Associates, as well as Art Dyer and
other representatives of Parkland Ventures were present. Mr. Anderson presented the
basic principles of creating a tax incremental financing (TIF) district. An area is chosen
where you want to see development occur, or blight removed. A base value of the
district is fixed. The increment value represents the growth of the district above the
established tax base. The taxes collected on the new value are used to pay for the
improvements. When a TIF is created, there is a period of seven years to spend
money. At the end of the seven years, there may be an additional 16 years in which
the tax money collected may be used to pay for any money that was borrowed during
the first seven years. A TIF could last for up to 23 years, or until enough money is
collected on the new value to pay off any costs incurred in the first seven years. Mr.
Anderson noted that the Joint Review Board of Waukesha County has set higher
standards than what is allowed by state law and generally does not approve a period of
more than 15 years. Mr. Anderson stated that size of the district is limited by two
factors. One is that you cannot have more than 7% of your equalized value in TIF
districts. The other factor is that 50% of the land (in the TIF district) has to meet one of
three purposes: blight elimination, rehabilitation of an area, or industrial development.
Properties contiguous to an area may be included in the district. Mr. Anderson outlined
the process for the creation of a TIF which begins with a public hearing before the Plan
Commission to determine the district boundaries and project plan. It then goes to the
City Council for review and approval followed by review of the Joint Review Board,
which has the ultimate authority to approve. Mr. Anderson identified the key elements
of a project plan as identification of the project(s), determination of economic feasibility,
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January 26, 1999
and identification of district boundaries. The plan usually identifies general ideas.
Approval of the Joint Review Board sets the framework of what can be done; however,
the City approves of each project individually. A developer’s agreement is the
instrument used to outline what the City and developer negotiate and is usually done
early in the process. Attorney Molter also pointed out that the City generally requires a
Letter of Credit. Mr. Anderson noted that a preliminary TIF resolution is not required; it
can indicate intent. He stated that a shortfall in the TIF at the end of the time period
would have to be made up by the City. In response to a question by Patterson, Mr.
Anderson stated that the City’s past TIF districts have been created for broader areas
and not just one parcel. Discussion ensued regarding improvements outside of the
district, such as street lighting, which can be included in the TIF. Salentine expressed
concern about the equity of including improvements in this TIF that other developers
had to pay for. Sanders stated things change. Decisions have to be made based on
current information. Salentine questioned why the City did not offer this financing to a
prior potential developer who presented a plan. Nothing has changed since that time.
Sanders stated there is a difference; this now needs an impetus to get going.
Mr. Dyer of Parkland Ventures presented his views to the Council. He stated that 50%
of the commerce that should take place in the downtown area is not because of its
blighted and dilapidated condition. The assessed value of the property has decreased
from $1.7 million to $199,000. Mr. Dyer stated he wanted to begin a new working
relationship with the City to eliminate blight, health and safety risks, and increase
business, property values, and tax revenues. He noted Mr. Anderson has previously
stated that there is no cost to the City regarding the TIF. Mr. Dyer identified stormwater
problems that need to be addressed, which could be included within the TIF district.
He also stated that other improvements such as traffic lights, street lights, bike and
pedestrian paths could also be available. These improvements could equate to 10% of
one year’s budget. Mr. Dyer stated work initiated at the mall could not continue
because of unsafe conditions. The Parkland Mall property meets the standards, as
outlined in the statutes, to qualify for a TIF.
Mr. Dyer stated he would address three questions as requested by Slocomb. 1. Can
the City do a TIF without including demolition of the building? Mr. Dyer stated the law
requires an area be blighted. The structure is the primary cause of the blight. If the
building were razed using private dollars, then the function of the TIF to aid in the
elimination of blight would not be appropriate on vacant property and the use of TIF
money for other public improvements would not be suitable if they do not alleviate the
blight. Further, if the building is removed, the land value will increase and the amount
of increment will decrease which will extend the time to pay back the borrowed funds
and retire the TIF. 2. If a resolution were passed to include demolition in the TIF,
when would the work commence? Mr. Dyer stated he has a demolition permit issued
by the City last week. Parkland Ventures has terminated all services, such as
electrical, sewer, and water. The demolition could commence immediately. 3. Can the
Council approve demolition as a reimbursable expense prior to formal TIF approval?
Mr. Dyer referred to and read a portion of a letter from the City’s counsel, Quarles &
Brady dated 9/22/98. He stated it is his interpretation of the correspondence that the
demolition expense could be TIF eligible and reimbursed to him. He then read a letter
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January 26, 1999
from Attorney Adelman dated 10/98 stating that it supports that the creation of a TIF for
Parkland Mall is consistent with the City’s past TIF projects. Mr. Dyer asked that
Pionek work with him, representing the Council, to prepare a TIF proposal for Parkland
Mall.
Salentine questioned that demolition could occur immediately. Mr. Dyer reiterated it
could be a reimbursable TIF expense. Attorney Molter noted that Mr. Dyer did not read
the entire Quarles & Brady letter which left a misleading impression. Mr. Dyer read the
remainder of the correspondence. He stated that he is showing good faith and is taking
the risk of proceeding with demolition prior to approval of the TIF. The Mayor
requested the input of Mr. Anderson regarding the effect demolition of the building will
have on determination of the Joint Review Board that the area is blighted. Mr.
Anderson stated the Board will have its own opinion. Even if the building is torn down,
the potential for blight can still exist. It depends where you are in the restoration
process. Slocomb asked about the statement that there is no cost to the City. Mr.
Anderson stated it refers to the new value paying for all the costs of the district.
Slocomb noted that the other taxing entities do not benefit and the need for services
increases. He believes there is a cost. Sanders stated that the outside costs referred
to by Slocomb are not a big factor. The existing building and business demanded
services. Chiaverotti asked (the Mayor) if public improvements such as the expansion
of Freedom Square pond, decorative lighting, bike paths could happen at the cost of a
developer. The Mayor responded certainly. The City has provisions that require
certain improvements as a condition of development. Slocomb noted that TIF can
provide for stormwater management on properties contiguous to a development. The
Mayor noted that in a blighted area, TIF allows the development to occur. Without it,
the costs exceed the ability to do so and development does not take place. Mr.
Anderson stated the Review Board bases approval on the area not being developed
unless the TIF is granted.
Salentine stated something should have been done at this site a long time ago. She
believes there are developers out there that could do something without TIF. Pionek
asked about Mr. Dyer’s reference that the City’s past TIF districts have benefited other
private individuals. Mr. Anderson responded that the City’s past TIF districts have
been broader in scope and private developers benefited; however, the districts were
not created specifically for one developer or parcel. In response to a question by Mr.
Dyer, Mr. Anderson stated that it is common to include demolition in blighted TIF
districts.
Henry Elling of MSA Professional Services appeared on behalf of Parkland Ventures.
Mr. Elling stated that he was retained to put together a draft TIF plan and an
accompanying developer’s agreement. Parkland is prepared to go forward. The
resolution to include demolition will encourage the developer to proceed. Slocomb
asked if the proposal dated July 13, 1998 is the one Mr. Elling referred to. He
responded yes and stated that until further direction or involvement is received from the
City, it is not their intention to present a new proposal. The Mayor requested
clarification that he and City staff have been willing to meet with Parkland Ventures to
complete the plan. Mr. Elling agreed that the City has been willing to meet. He
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January 26, 1999
believes that if the resolution is approved by the Council, the developer will be given
good faith direction to proceed with demolition and work with staff to bring forward a
TIF proposal. It encourages the removal of the building to move forward.
Salentine asked the Clerk if the Council were to entertain a referendum at the April
election, what would be the latest possible date to accomplish. She responded that
without reviewing election law, she believes it would be six weeks, or February 16. The
Mayor stated a resolution indicating the referendum language would have to be
adopted prior to that date.
Attorney Bill Frederick, representing Parkland Ventures, stated this needs a subsidy to
bring the type of development the City wants. It needs an economic catalyst that
government expenditures can provide to a project. A greater tax base will be attained.
He encouraged the formation of a partnership that will allow the City to get what it
wants and the developer to get what it wants, with the City obtaining a beautiful project.
The Mayor asked Mr. Frederick, as the developer’s attorney, if Mr. Dyer recognizes that
the City cannot be held liable if it passes the resolution tonight and then future actions
are contrary. Attorney Frederick stated he (Mr. Dyer) would not be able to sue the City.
Patterson objects to “sneaking” other costs in the TIF as means to obtain. Attorney
Frederick stated those type of decisions are made every day; that may be the only way
this project will achieve fruition.
Reso. #221-98 - Resolution to Include Demolition and Remediation Expenses in a
Possible Tax Incremental Financing District for Parkland Mall, on the floor, deferred
11/10/98. The Mayor reviewed the Council’s options and reiterated that this resolution
only indicated intent of this Council. He stated Mr. Dyer has acknowledged that he
understands the risk he assumes if he proceeds with demolition. His willingness to
move ahead and take the risk shows a measure of good faith that something will get
resolved. The Mayor stated the Council could pass this resolution regarding demolition
with the development plan coming directly to Council. It could also set this resolution
aside and bring forth another resolution which would encompass all eligible expenses
in one package. Slocomb moved to amend to add, “BE IT FURTHER RESOLVED That
the City reserves the right to not create a TIF or to create a TIF that does not include
demolition and remediation expenses.” Patterson seconded and expressed concern
about risk to the City even though the resolution only indicates intent. Attorney Molter
stated there is always some risk. Chiaverotti noted a previous request for a
development plan and developer’s agreement prior to the Council taking any action.
The Mayor noted that is another option the Council has. Pionek does not believe the
amendment is necessary. We are not saying the TIF is going to happen. This is a
start and allows demolition to proceed which is what everyone wants. The motion to
amend was adopted 7-0. Salentine and Pionek requested their names be removed
from the resolution as they did not draft it. The Mayor stated his name would be listed
as sponsor. Slocomb stated he objects to public money being put in the hands of a
private developer. The City’s past TIF districts have been for public improvements. It
is not appropriate for public funding to subsidize private business. Patterson agreed
with Slocomb and does not like the concept of giving the developer something by
allowing the City to tack on something. This is not about the good of the City; it is
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January 26, 1999
about what a developer wants. He cannot support as long as demolition and
remediation are included.
Woodard stated everyone wants the mall down and this is the only way to accomplish.
Other developers have been mentioned but Mr. Dyer is the owner. He is trying to work
with us. The TIF districts are out there to help. This is a blighted area. When Mr. Dyer
purchased he did not know about the fungus the building contained. She will support
because the people in her district want her to. The City will receive benefits. The
Mayor stated there are situations where you do not get the type of development you
want in an area that is blighted without public assistance. He noted that public
assistance is provided through programs, such as the revolving loan fund. Salentine
asked if the City had the power to issue a razing order. The Mayor responded there is
a process for that but it does not provide for redevelopment of the property. Slocomb
stated the resolution does not speak to whether or not a TIF would be proposed for the
project. It only speaks to the inclusion of two items in a TIF. He could support items
having public purposes.
Pionek stated the City considered the creation of a TIF for the proposed business park.
Wispark would have benefited and additional services would have been required. He
favors TIF for this area; his constituents support. If the City tears down the building,
the TIF district will not be created and the ponds will only be improved at taxpayer
expense. Mr. Dyer is in business to make money. Pionek does not have a problem
with government helping businesses out. Patterson stated there is a difference. The
City approached the developer for assistance in developing a business park. In this
case, the developer has come to us and said save me lots of money and you will be
able to do some things and pay for them in a different way. Pionek stated he agrees
there is a difference. As a member of the Stormwater Management Committee, there
are many problems that need to be addressed. Either we do not do anything, or it is
going to cost the taxpayers money. We should take advantage of the money available;
other communities do. Why were we so big on doing a TIF for the business park? Yes,
Mr. Dyer will make money but the City will benefit. He does not understand where the
problem is. Pionek stated Mr. Dyer’s presentation was beneficial. Chiaverotti stated
the public will benefit from the demolition of the building.
Sanders stated government funding is used to “jump start” businesses every day. The
resolution is in the City’s favor. With the TIF, the development will be enhanced; the
City will benefit without a tax impact to the citizens. He encouraged cooperation with
the developer to develop this area of the City. This is the beginning; we have to start
somewhere. Slocomb stated in order for this Council to proceed, he believes a TIF
resolution should come forward that is all encompassing. All the issues should be
addressed as a package which will give direction to the developer. The action taken
tonight does not preclude demolition and remediation from being included. Slocomb
does not believe government loans to businesses are the same as this, which is a one-
way transaction of money to a developer. All developers would enhance their projects
if public money was made available. Chiaverotti stated that a developer cannot be the
only one to benefit from a TIF; the public must benefit, too. Woodard does not
understand the reasoning for another resolution. All the same approvals are
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January 26, 1999
necessary. The Mayor stated this only deals with one issue; there are others that could
be included giving additional direction to Parkland Ventures. Woodard stated Mr. Dyer
wants this so demolition can begin. Pionek stated we had a resolution like that already;
we are going around in circles. Patterson cautioned the Council on giving the
developer direction to proceed. Reso. #221, as amended, defeated 4-3 with Slocomb,
Chiaverotti, Patterson, and Salentine voting “no” and Pionek, Sanders ,and Woodard
voting “yes.”
Slocomb noted he will bring a resolution forward at the next meeting. The Mayor
requested that Mr. Dyer forward any additions or deletions he may have for the City’s
consideration. We need to give direction to the developer and move forward. Pionek
stated he was disappointed; we keep doing the same thing.
Reso. #11-99 - Resolution Authorizing Ehlers and Associates, Inc. to Solicit
Competitive Proposals for Approximately $2,015,000 Water System Revenue.
Patterson moved for adoption. Salentine seconded. Mr. Anderson presented bid
results for the issuance of the bonds which will allow the water utility to eliminate some
balloon payments. The best bid has an interest rate of 4.62% for 20 years. He noted
that the utility received an A-3 rating. An additional $100,000 savings will be realized
due to the favorable rate. Motion carried 7-0. Mr. Anderson left the meeting.
Ord. #978 - An Ordinance to Amend the Zoning Map of the City of Muskego RS-3 to
RS-3/OOS (Rozeski). Second Reading. Salentine moved for adoption. Pionek
seconded. Salentine stated the Plan Commission deferred action (on Building, Site
and Operation Plan) until Council action on rezoning request. It appears that adjoining
property owners are most concerned with the possibility of Janesville Road being
widened. There is also a concern that the business remain low key and the residential
character of the area be maintained. Salentine stated that the value of properties in the
area have been reduced due to the increased traffic counts. People are reluctant to
reside on Janesville Road. Sanders objects to rezoning residential properties on
Janesville Road to business. The Mayor said placing low key businesses that generate
minimal traffic and maintaining the residential character of the neighborhood will benefit
the homeowners in that area. Motion to adopt carried 6-1 with Sanders casting the “no”
vote.
COMMITTEE REPORTS
The 1/11/99 Committee of the Whole minutes were received. Slocomb moved for
acceptance of the Finance Committee minutes of 1/20/99 and 1/26/99. Salentine
seconded; motion carried.
Sanders moved for acceptance of the Public Utilities Committee minutes of 1/18/99.
Woodard seconded; motion carried.
Minutes of the 1/19/99 Plan Commission and 1/11/99 Parks and Recreation Board
meetings were received and placed on file.
Ord. #977 - An Ordinance to Amend the Zoning Map of the City of Muskego RS-2 to I-1
(Santi). Second Reading. Salentine moved for adoption. Sanders seconded. Sanders
moved to amend to include conditions as outlined in proposed amendment. Salentine
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January 26, 1999
seconded; motion carried. The Mayor stated the petitioner agreed with the rezoning
conditions. Motion to adopt carried 7-0.
Resolution #235-98 - Resolution Amending the Assessment Policy for Construction of
Sanitary Sewers, on the floor, deferred 12/8/98. Attorney Molter noted that the
language he proposes provides the latitude to review each situation and set a specific
time limit for the deferral. Sanders moved to amend to include language recommended
by attorney. Slocomb seconded; motion carried. Reso. #235-98, as amended, adopted
7-0.
Resolution #236-98 - Resolution Amending the Assessment Policy for Construction of
Water Mains, on the floor, deferred 12/8/98. Sanders moved to amend to include the
same language of the sewer policy. Woodard seconded; motion carried. Reso. #236-
98, as amended, adopted 7-0.
Reso. #12-99 - Award of Bid - Muskego Public Library. Patterson moved for adoption.
Slocomb seconded. Chiaverotti moved to amend to add “contingent upon the Mayor
approving final contract documents” at the end of the NOW, THEREFORE, BE IT
RESOLVED. Woodard seconded; motion carried. The Mayor noted that the bids came
in $700,000 under budget. Chiaverotti expressed staff concerns about the ability to
operate partitions and was assured that the moveable walls were much easier to
operate. Reso. #12-99, as amended, adopted 7-0.
Reso. #13-99 - Award of Bid - Storage Salt Shed. Salentine moved for adoption.
Woodard seconded. Motion carried 7-0.
Reso. #14-99 - Second Amended and Revised Final Resolution Authorizing Installation
of Sewer Improvements and Levying Special Assessments Against Benefited Property
(North Cape/Schaefer Drive Sewer Project MSS-1-98) (Assessment District “SQ”).
Sanders moved for adoption. Woodard seconded. Motion carried 7-0.
Reso. #15-99 - Resolution to Establish Fees (Reserve “Class B” License). Slocomb
moved for adoption. Patterson seconded. Motion carried 7-0.
Reso. #16-99 - A Resolution Expressing Opposition to Certain Recommendations of
the Legislative Task Force on Shared Revenue. Salentine moved for adoption.
Woodard seconded. The Mayor explained how the City would be adversely affected by
the proposal and noted that the resolution would be forwarded to the Dept. of Revenue,
governor, and state representatives. Motion carried 7-0.
Reso. #17-99 - Approval of Certified Survey Map - De Back. Salentine moved for
adoption. Woodard seconded. A new map was submitted to the Council indicating 40’
setback as requested by the Plan Commission. Motion carried 7-0.
Reso. #18-99 - Designating 1998 Unexpended Capital Project Funds to be Carried
Over into 1999. Sanders moved for adoption. Salentine seconded. Motion carried 7-
0.
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January 26, 1999
Reso. #19-98 - Approval of the Regional Aquifer Performance Simulation Modeling
Program Prospectus. Sanders moved for adoption. Slocomb seconded. Motion
carried 7-0.
Ord. #979 - An Ordinance to Amend Chapters 8, 20, and 26 of the Municipal Code of
the City of Muskego - Establishing Procedures for Naming of Public Property. First
Reading.
LICENSES
Slocomb moved for approval of operators’ licenses for Tammy Pulczinski, Robert Reid,
and Gini Reid. Salentine seconded; motion carried.
VOUCHER APPROVAL
Slocomb moved for approval of General Vouchers in amount of $1,007,930.85.
Sanders seconded. Motion carried 7-0. Salentine moved to amend amount of General
Vouchers to include $14,808.33 payment to Tess Corners Fire Dept. Patterson
seconded; motion carried. Motion to approve General Vouchers, as amended, carried
7-0.
Slocomb moved for approval of Tax Checks in the amount of $32,642.25. Salentine
seconded. Motion carried 7-0.
Sanders moved for approval of Utility Vouchers in amount of $101,815.35. Woodard
seconded. Motion carried 7-0.
COMMUNICATIONS AND MISCELLANEOUS BUSINESS AS AUTHORIZED BY LAW
The draft of the Feb. calendar was distributed. It was determined that a Committee of
the Whole meeting would be scheduled for 2/4. Patterson requested that a draft of the
Parkland resolution be prepared for review at the 2/4 COW meeting.
There was no reason to convene into the second closed session as Mr. Gethmann was
ill and could not attend.
Slocomb moved to adjourn at 12:17 a.m. Salentine seconded; motion carried.
(Minutes taken and transcribed by J. Blenski.)
Respectfully submitted,
Jean K. Marenda, CMC
Clerk-Treasurer