Commuinity Development Authority- MINUTES - 8/15/2005
CITY OF MUSKEGO Approved as Corrected
COMMUNITY DEVELOPMENT AUTHORITY (CDA) Audio recording of meeting
MINUTES available for the first 39 minutes
Monday, August 15, 2005 only due to technical difficulties.
Commissioner Chairman Frank Waltz called the meeting of the Community Development Authority to
order at 7:00 p.m.
Those in attendance recited the Pledge of Allegiance.
The meeting was posted in accordance with the Open Meeting Law.
PRESENT: Commissioners Rob Glazier, David Lidbury, Suzi Link, Gail Miles, Frank Waltz, Ald. Eric
Schroeder and Executive Director Jeff Muenkel.
ABSENT: Ald. Salentine (excused)
GUESTS: John Meland of the Southeastern Wisconsin Regional Planning Commission, Dawn
Gunderson of Ehlers & Associates, Inc., Dr. Jodie Gruenstern and Muskego Sun Reporter
APPROVAL OF MINUTES
July 12, 2005
Commissioner Link moved to accept the minutes for the July 12, 2005 meeting of the CDA.
Commissioner Rob Glazier seconded. Upon a voice vote, the motion carried with Commissioner Waltz
abstaining.
OLD BUSINESS
Update on City-owned Janesville Road Property and RFP (Request for Proposal)
Executive Director Muenkel updated the CDA commissioners that no development plans were received
from the 400 RFPs that were sent out. They can now sell it without the RFP process. He was looking
for some ideas from the CDA commissioners. He mentioned to produce a real estate sign on the
property and work to sell it. Ald. Schroeder inquired if the potential developers had indicated why it was
not desirable? Executive Director Muenkel stated he had not received any feedback on why it was not
marketable. It could be the present time of the year or maybe they were looking for more opportunity in
the area. Commissioner Link asked if they gave the property owners in the area an opportunity to bid?
Executive Director Muenkel said they had received all the information and also had separate meetings
with them and the Mayor. Ald. Schroeder asked if a prospective buyer would be held to all the terms in
the RFP to develop the property? Executive Director Muenkel said some flexibility could be allowed
relative to the deadlines but the guidelines would remain the same. Ald. Schroeder asked if a buyer
would have to meet the deadlines or could they leave the property as it is for 10-15 years? Executive
Director Muenkel said a developer’s agreement would cover timelines on development. Ald. Schroeder
stated that the Common Council had given the property to the CDA to have it developed. Commissioner
Link added that the property was to be developed to provide a funding source for the CDA. She said the
buyer would have to have a plan for the property before the sale would be considered. Chairman Waltz
stated to sell the property outright without some legal or financial commitment or timeline for
CDA Minutes August 15, 2005 - page 2
development would be countered to the understanding that they had with the Common Council. Ald.
Schroeder said to set the issue aside for now as the upcoming discussion on TID #8 may solve the
dilemma. Commissioner Lidbury would like a legal opinion from counsel if they can sell it and require
the development to happen. Commissioner Miles would like the people who showed interest earlier be
contacted to find out why they lost interest. Commissioner Glazier also said it would be interesting to
know why they lost interest. He would not be in favor of any plan that did not provide for immediate
development of the property. Executive Director Muenkel said they can tie a developer to a subdivider’s
agreement and use different methods such as posting bonds to make sure things happen and that can
be reinforced.
NEW BUSINESS
Consideration of a recommendation to the Common Council concerning approval of a Revolving Loan
Fund loan to Dr. Jodie Gruenstern, Animal Doctor, Inc. to assist with the purchase of the property at S74
W16810 Janesville Road
Commissioner Rob Glazier abstained from the discussion due to Dr. Gruenstern being their family’s
veterinarian. Executive Director Muenkel presented the request from Dr. Jodie Gruenstern for the RLF
loan. He stated that the staff of the Southeastern Wisconsin Regional Planning Commission (SEWRPC)
had reviewed the loan request and recommended approval with a few contingencies. Commissioner
Suzi Link moved to consider approval of the RLF loan to Dr. Jodie Gruenstern. Commissioner
Lidbury seconded. Commissioners were in receipt of a description of the business proposal and the
findings of a SEWRPC staff analysis based upon RLF underwriting standards. Mr. John Meland of
SEWRPC reviewed the document in detail with the CDA commissioners. He recommended approval
based on the following contingencies:
That a $100,000 RLF loan is provided to Dr. Gruenstern. The loan would be used for the
acquisition of real estate at Tax Key #2198.990.004 for working capital and for RLF loan closing
costs.
That the RLF loan is matched with a loan of at least $495,000 from Citizens Bank of
Mukwonago and $24,000 in owner’s equity.
That the RLF loan be provided with a 10-year loan term, a 20-year amortization, a deferral on
principal payments of the first four months of the loan term, and an interest rate of 3-1/4%.
Interest only payments would be made on a monthly basis during the deferral period.
That the RLF loan is secured with the collateral identified as (1) a mortgage on the subject real
estate at S74W16810 Janesville Road that is junior to the Citizens Bank of Mukwonago loan of
$495,000, (2) the unlimited personal guaranty of Dr. Gruenstern, and (3) a mortgage on Dr.
Gruenstern’s residence in the City of New Berlin that is junior to mortgages totaling $225,000. A
July 30, 2005, appraisal of the Janesville Road property shows an estimated fair market value of
$640,000. The City of New Berlin assessment roll shows an equalized value on Dr. Gruenstern’s
residence of $277,900.
That the city obtains a title insurance policy on the property at Tax Key #2198.990.004 in the
amount of $100,000.
That the commitment to create five new full-time equivalent jobs in exchange for the RLF Loan
and the jobs would be recruited through the Waukesha County Workforce Development Center
is incorporated in the loan closing documents.
That the borrower provides to the city, or its designee, on an annual basis, semi-annual financial
statements for Animal Doctor, Inc. that are certified by the company, annual financial statements
for Animal Doctor that are compiled by a certified public accountant and signed copies of the
borrower’s and Animal Doctor’s Federal income tax return.
CDA Minutes August 15, 2005 - page 3
Ald.Schroeder questioned what would happen if she were not able to create or to fill the jobs? Mr.
Meland said there is a penalty of $1,000 per job. He also said that the Common Council has the option
to waive the penalty for extenuating circumstances. Mr. Meland advised the commissioners that there is
still $500,000 in the fund at this time. Upon a voice vote, the motion carried with Commissioner
Glazier abstaining.
CDA Commissioners recessed from 8:04 p.m.-8:08 p.m. because of technical recording problems.
Motion to establish a public hearing date for possible TIF #8 District Amendments.
Executive Director Muenkel informed the CDA commissioners that staff had been working with Ehlers
and Associates to see if the existing TID #8 should be amended. The current district seems to be in
financial trouble at this time and future projects surrounding the district may benefit from being amended
into the district. The proposed amendment would be the addition of ten properties and the removal of
three and these were depicted on a map of the TID #8 area. Mrs. Dawn Gunderson of Ehlers and
Associates reviewed the existing and projected cash flow analysis of TID #8 with the commissioners.
The current TID would be approximately $585,272 short of paying off the debt with 2004 values. With
the recent reassessment in 2005, the TID would still be approximately $21,844 short of paying off the
debt. Under the proposed amendment and the added values of the new properties, the TID would pay
off the debt incurred and create a surplus of approximately $65,463. She also advised of the changes
the State made regarding TIDs. A TID can now be amended four times for removing or adding
properties. You can add and subtract property and that is counted as one amendment. The life of a TID
went from 23 years to 27 years and this is an advantage for Muskego and, if needed, towards the end of
the life of the plan, you can file an extension for 4 years. She touched base on the timeline that would
have to be followed. There is a statutory requirement that a TID has to be adopted and created by the
Council prior to September 30 for the base values to be established for January 1 of that year.
Chairman Waltz stated the issue before the CDA was to set a date to receive public input on possible
amendments for TID #8 as proposed by Council and outside consultant. Commissioner Link moved
to set a hearing date of September 12 for possible amendments to TID #8. Commissioner Glazier
seconded. Commissioner Miles asked about the properties that would be removed from the TIF, what
happens? Executive Muenkel stated that in the best interest of the city, they decided to remove the
properties. Further, if a viable development did come up, the TID could be amended to re-include the
properties. Mrs. Gunderson said if they were to move forward assuming that increment was always
going to be there and something did happen three years out and there was a major reduction, the CDA
could be in a worse financial state in terms of recovering the costs. Once the amended plan is
developed, you could not spend TID dollars on the property. Ald. Schroeder questioned if the three
properties were left in, could the funds be allocated in the TID to the other properties? Chairman Waltz
said the funds could be allocated, but the risk is that the property is revaluated below the base originally
assumed and it will then cause an additional TID fund shortfall. Mrs. Gunderson added if the property
would go from $800,000 to $2,300 you have lost the increment and also the base in the district. When
you remove property, there is a lag when it comes out of the district by two years. Ald. Schroeder asked
if some storm water projects had been done on the property? Executive Muenkel said all of the storm
water projects were off-site of the TID but benefited the properties of the TID. Upon a voice vote, the
motion carried unanimously.
Other Economic Development Opportunity Discussion
Executive Director Muenkel shared that there is funds in economic development for community signage.
They, therefore, have looked into gateway signage and city directional signage. Examples of some
signage were provided. Ald. Schroeder stated he would like to see the entrances, the gateways, to the
CDA Minutes August 15, 2005 - page 4
city have consistency. Commissioner Lidbury mentioned designing of the signs could be a contest for
the art students and get the community involved. Commissioner Link said that Muskego means sunfish
and, yet, birds are depicted on the city’s welcome signs. If that’s what the name means, it should be
acknowledged. Ald. Schroeder said the signs did look better after they had been painted, but before
they need refurbishing again, may want to look at a new theme. Executive Director Muenkel will continue
to research this issue.
Executive Director Muenkel shared that he would like to investigate establishing a farmer’s market in
downtown Muskego. Muskego does have a lot of rural area and farmers that may bring their produce to
the market. Commissioner Glazier said that most people say they moved to Muskego because it is rural
and a farmer’s market would fit in perfectly and if there is a demand for it and a supply for it, it would be
nice.
PUBLIC INPUT--None
MISCELLANEOUS BUSINESS AS AUTHORIZED BY LAW:
The next meeting date was set for Monday, September 12, following the public hearing on the TID #8
amendments.
ADJOURNMENT:
There being no further business, Commissioner Lidbury moved for adjournment, seconded by
Commissioner Glazier. Upon a voice vote, the motion carried unanimously. Meeting adjourned at 8:53
p.m.
Stella Dunahee, CPS
Recording Secretary