Commuinity Development Authority - MINUTES - 7/9/2009
CITY OF MUSKEGO Approved 8/18/09
COMMUNITY DEVELOPMENT AUTHORITY (CDA)
MINUTES
THURSDAY, JULY 9, 2009
Chairman Frank Waltz called the meeting of the Community Development Authority to order at 6:31 p.m.
Those in attendance recited the Pledge of Allegiance.
STATEMENT OF PUBLIC NOTICE
The meeting was posted in accordance with the Open Meeting Law.
PRESENT: Commissioners Kathy Chiaverotti, Rob Glazier, Larry Lefebvre, Gail Miles, Frank Waltz, Ald.
Harenda, Ald. Werner and Executive Director Muenkel
GUESTS: Jay Erdman, John Meland, Keith Hammitt, Ken Myers, Ald. Borgman, Et.Al.
APPROVAL OF THE MINUTES OF JUNE 16 , 2009
Commissioner Glazier moved to approve the minutes of the June 16, 2009 meeting.
Commissioner Lefebvre seconded. Commissioner Miles submitted a correction to page 2, line 28, to
change drive to driven. Upon a voice vote, the motion to approve the minutes as corrected carried
unanimously.
PUBLIC HEARING--REGARDING THE CDA SELLING PROPERTY FOR COMMERCIAL
DEVELOPMENT PURPOSES (TAX KEY NO. 2198.991.002, JANESVILLE ROAD)
Mr. Jay Erdman (W175S7121 Lake Drive) expressed he had several issues that concerned him on the
sale of the CDA property on Janesville Road.
Allowing a conditional use on a property when there is a beginning of a new development in
downtown; asking for a waiver of rules; setting a precedent;
Storm water flow as relating to the lake and the high levels that have been experienced in the
last few years; silt and contaminants going into the lake; the retention pond is not a very good
one as it is almost always full and when it rains, it starts draining immediately with no chance to
settle out the silt and contaminants;
The elevation of the lot to the south, the gas station, is 3-4 feet higher than this lot; city informed
him they were going to put a swale in so the water can run down between them and it will not go
apparently to a retention pond; the swale appears to be close to the gas station and that drains
toward the street and the new lot runoff is going to drain toward the back toward the retention
pond and is that water going to go through the retention pond; looking from the area of the
tennis court and gas station, toward the tree line, it is almost all cattails so it is already full of
water;
He would like to know where the well is, which well is in question as there is one on the corner
of Pleasant View and also Parkland Drive, Well #8. (He was informed it was Parkland.) In the
last flooding situation, he shared that the water was over the grass at least 2 feet. What is going
to happen in the future when a big storm hits and the likelihood of the dam being taken out? As
an engineer, he stated that when the dam breaks, there’s no stopping the flow and the city
should take a look at this possibility.
In regard to the set back, it appears they are allowing a building just as close to the street as a
present one and it doesn’t line up. This one has a 10-foot set back and the other buildings are
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July 9, 2009
pushed back. If there is a problem with the road, they will have to figure out why they have these
buildings too close.
The price of the lot in comparison with the other adjacent lots and their assessed land value.
Something is wrong, when the biggest lot is being sold for a little over half of these other lots.
Either the assessment is too high or the price of the lot is too low. He thought the CDA should
have the lot appraised and sell it for the appraised value.
Ald. Borgman shared that he was getting calls about the price of the lot. The lot was given to the CDA by
the city. They may sell it for whatever they wish. However, when the city gave it to the CDA , it was
given because the city wanted the CDA to become self-sufficient; that each year, they were not to come
to the city to get money. They wanted the CDA to run as an autonomous unit, have their own money,
their own budget to do what they wanted. He thought they were giving away something that was
suppose to be the CDA’s purse for the future. As Mr. Erdman stated, the appraisals of the other
properties makes the price of this property questionable. He did mention that it would not be the first time
that the length of time on the market would drive down the price of a property which is obviously what is
going on here.
NEW BUSINESS #1
Approval of a Resolution of the CDA Authorizing the Sale of CDA-owned Property
Ald. Werner moved, Commissioner Chiaverotti seconded, to approve the resolution for the sale of the
CDA-owned property to K. & V Property Management, LLC.
Executive Director Muenkel responded to the public hearing comments:
The sale price of $100,000 for the property seems to be a concern. Factors considered in the pricing
was the overall goals of the CDA. The land value according to the assessor came to about $241,000.
He mentioned the TIF policy that the city adopted was an 8:1 ratio with incentives to developers. On
this deal, only $50,000 is going out on TIF incentives and the developer is investing about 1.4 million
dollars in this whole project which would amount to a 26:1 ratio. He pointed out that with this
development, the TIF would be paid back two years sooner. This property has also been on the market
for 4 years. The ultimate goal is that the CDA is trying to encourage development and spur
redevelopment.
Conditional use grant is required by zoning. Any gas station or auto repair facility has to get a
conditional use grant as these types can have more of an effect on the surrounding neighborhood.
Storm water control is a very valid concern around the lake. Most of the businesses along Janesville
Road are older in nature and thus not being required during development do not have storm water
ponds. This one does have a storm water pond and the one being portrayed does meet the city’s code
which is more stringent than the State’s and will retain water for a couple of years before releasing it so
the silt and contaminants float to the bottom and this should helping the flooding events.
He wasn’t sure about the gas station swale but any grading happening on this site, the water has to run
toward the storm water pond. The water in the gas station swale will continue to run wherever it does
now as it is in an older development with no storm water pond.
Well #8 was put in the wellhead protection zoning district. He explained the primary and secondary
zones are only in the time and travel areas around a well which means the underground ground water
areas where water could run into the well depth due to the soil and topography. This parcel is not in the
primary or secondary zones which would prohibit this use.
The city put in the zoning codes two years ago, this new downtown revival district that allows a 10-foot
setback from the road right-of-way. The city foresaw that Janesville Road was going to be
reconstructed and many of the business will have property taken away and limited area to redevelop.
Right now the setback for most of the properties is 40 feet.
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July 9, 2009
Ald. Werner mentioned that when the road reconstruction is done, there will be some businesses close to the
10-foot rule. Ald. Harenda commented that the dollar amount being spent on the retention pond was not
incorporated in the price and he was informed that retention ponds run from $30,000-$50,000. Commissioner
Chiaverotti shared that she had contacted other CDA officers relative to the sale and they informed her that it
was a very common practice to sell for less with CDAs and is known as land writedown. Ald. Werner also
commented that by doing this, they are promoting development in the area and eliminating some blight in the
area. It will also generate revenues for the city. Commissioner Glazier confirmed that when CDA was given this
property, it was to sell it and give the CDA some operating funds. However, they were unable to sell it in a
timely fashion and now, they have a development that works with what the CDA wants to do in that area. He
thought it was the right thing to do with the property. Commissioner Miles questioned if any negotiations had
taken place on the price, offers and counteroffers or just taking the developer’s price. Also, with this first
project, is the CDA setting a precedent on selling property for less than its value. She would hope in the future
the CDA would exercise their due diligence and she was not sure they had done so in this case. Executive
Director Muenkel responded that a precedent is only set if circumstances are exactly the same and he did not
think this would happen in the future. In regard to negotiations, the developer came in with the package and
they assessed it according to the TIF ratios and goals of the CDA. Commissioner Miles had an environmental
concern relative to spills. Ald. Harenda stated that Mr. Hammitt has certain obligations to take care of any spills
and is bound by environmental regulations. Chairman Waltz related to the reasons for the CDA and part of their
responsibility to eliminate blight, develop downtown, create a city center and make the city a better place to
work and to live. In addition, the objective of drawing commercial businesses to the city and retain the
businesses already within the city and this is one of those opportunities. Commissioner Lefebvre stated the
price was one factor among others. The most important is to retain the business and at the same time, develop
this property. If they look at the whole picture, it benefits the developer and the whole city. Upon a voice vote,
the motion carried.
CLOSED SESSION READING
Commissioner Miles read the notice of a potential closed session.
NEW BUSINESS #2
Consideration of a Recommendation to the Muskego Common Council Concerning a Request from DK
Motor Parts Inc. for a $80,000 Revolving Loan Fund (RLF) Loan
Executive Director Muenkel introduced Mr. John Meland and stated that Mr. Meland had reviewed the
request from DK Motor Parks, Inc. for a loan in the amount of $80,000. In return, they are required to
generate a position for every $20,000. Commissioners were appreciative of the completeness of the
package submitted by the petitioner. The company would need the funding to assist with the purchase
of equipment for a NAPA Auto Parts store at W189S7819 Racine Avenue. Mr. Meland provided a
summary and SWRPC staff analysis of the request. They recommended that any approval be based on
the following contingencies:
That an $80,000 RLF loan is provided to DK Motor Parts, Inc.;
That the RLF loan is matched with loans of at least $470,000 from M& I Bank and $125,000 in
owner’s equity;
That the RLF loan is provided with a term and amortization of 10 years, a six-month deferral on
principal payments and an interest rate of 1.625 percent. Interest-only payments would be made
on a monthly basis during the deferral period.;
That the RLF loan is secured with the collateral being (1) a second lien position on equipment,
accounts receivable and inventory that is junior to the $470,000 in financing from M&I Bank; (2)
the personal guaranty of Daniel Myers; and (3) a second mortgage on Daniel Myers’ residence
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July 9, 2009
at 3008 S. 48 Street, Milwaukee, Wisconsin, that is junior to a $70,000 first mortgage. The
property has an estimated fair market value of $172,800.;
That the company is current on all lending conditions required by M&I Bank;
That the company creates four new full-time equivalent jobs that are recruited through the
Waukesha County Workforce Development center;
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.
Commissioner Chiaverotti moved, Ald. Harenda seconded, to forward this loan application
recommendation to the Common Council for approval. Commissioners quizzed the petitioner on
some of the issues presented in their documentation. Commissioner Glazier voiced his concerned about
the size of the loan and the funds still available in the RLF. Mr. Meland advised that there was $180,000
in the fund right now before this loan. Commissioner Glazier concern was also that the CDA may need
funds for those impacted by the Janesville Road project and what was the “but for” in regard to this loan.
Mr. Meland stated that the “but for” was from M&I Bank that “but for” this RLF loan, they would not make
the loan. On the issue of the company leaving the city, Mr. Meland stated that then the loan would be
considered in default. The company would have to pay back the money if they left the city. Ald. Werner
did note that the CDA loans so far have not been in default and they have been fortunate in the way they
have administered the funds. Upon a voice vote, the motion carried.
OLD BUSINESS
Review Janesville Road Grant and Loan Programs
Chairman Waltz refreshed the commissioners that at the last meeting, they had review and made
recommended changes. Executive Director Muenkel incorporated those changes in the documents as
well as providing the applications for the grants/loans. Commissioner Miles moved to approve
revisions to the procedures (wording) for the Janesville Road Commercial Building and Site Loan
Grant and Loan programs and forwarding to the Common Council. Commissioner Lefebvre
seconded. Ald. Harenda questioned if someone would apply for this loan program, could they also apply
for the RLF? Executive Director Muenkel stated that they could. All those within the boundaries of the
Redevelopment District #2 would be eligible to make application. Commissioner Chiaverotti asked if
there was an application deadline that the CDA would review all the requests at once? Executive
Director Muenkel stated it is difficult to put businesses in that position as the road reconstruction would
be happening in multiple phases and they would not know how it impacts them; they may or may not
invest money. Chairman Waltz mentioned that there was a proposal to invite the business people to a
meeting where these programs could be presented. Commissioner Chiaverotti suggested that a
maximum amount be limited to petitioners. Commissioner Miles suggested that fund-raising might be an
option. Commissioner Chiaverotti will check with other CDAs to see if they have done fund-raising.
Chairman Waltz recommended that in the future, they could consider how they wanted to process the
applications. Further, the CDA is the gatekeeper of the funds with Common Council giving final approval.
Upon a voice vote, the motion carried.
Review Policies and Procedure Changes
Commissioners were in receipt of another revision to the By-Laws and Rules of Procedure for the CDA.
Ald. Werner made a motion to approve, Commissioner Lefebvre seconded. The commissioners
reviewed and refined the document. Under debatable discussion by the commissioners was the duties
and jurisdiction of the CDA and Plan Commission and the overlapping of those duties and the time and
cost to the petitioner in appearing before both units of government. The majority of the commissioners
felt that when it comes to a redevelopment district, that the CDA review the proposal to confirm that it
meets with the CDA guidelines before passing it on to the Plan Commission. The other issue that the
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July 9, 2009
commissioners focused on was the public input inclusion in the by-laws. Chairman Waltz summed up
the changes to the document as follows:
On page 1, remove the words “the following” from …Authority evaluates the following subject…;
On page 1, change drive to driven before the word items in the last line of the page;
On page 3, under Order of Business, move Public Input before Old Business;
On page 3, under Public Input, add by the chairman or to the last sentence, first paragraph so it
reads Allowing…input time is only allowed by the chairman or when “motions allowing the floor
to speak”…CDA.
On page 3, under Public Input, change or to for in the second sentence of paragraph 3.
Ald. Werner moved to approve the document with the five changes noted and forward to the
Common Council for their concurrence. Commissioner Lefebvre seconded. Upon a voice vote,
the motion carried.
PUBLIC INPUT
None
MISCELLANEOUS BUSINESS AS AUTHORIZED BY LAW
The next meeting date was set for Tuesday, August 18, at 6:30 p.m.
Ald. Werner shared his appreciation of the discussion occurring and he was optimistic that the CDA
could move forward and grow in the future.
ADJOURNMENT:
There being no further business, Commissioner Miles moved for adjournment, Alderman Harenda
seconded. Upon a voice vote, the motion carried unanimously. Meeting adjourned at 8:57 p.m.
Stella Dunahee, CPS
Recording Secretary