CDA recommends special taxing district
District would provide funding for Arrabelle apartment project

By Laurie Arendt - News Graphic Staff

Jan. 30, 2018

CEDARBURG — Faced with the prospect of starting over in the efforts to bring redevelopment to the former St. Francis Borgia school site in downtown Cedarburg and hearing that the project’s financing was now contingent upon TIF assistance, Cedarburg Mayor Kip Kinzel succinctly summed up the mood of Thursday night’s Community Development Authority.

“No one’s jumping up and down about this, no one’s crazy about this, that we extended this process,” he said. “If we could get Tony (W. DeRosa of HSI Properties) to come up with a project that didn’t need the $1.9 million funding, we would … if we asked him to jack up the density and take out the architectural details (to decrease the costs), quite frankly we’d be back at nothing.”

The city of Cedarburg is considering the creation of a $1.98 million TIF district for the 4.25-acre property. If approved, the city will spend $1.925 million in developer incentive payments and $56,500 in administrative expenses.

“I believe in the free market; I believe in democracy,” said CDA member Joe Kassander. “I also develop commercial properties myself. The way I look at this property is the cost of the land minus ripping down the building. I don’t see the building as blighted, possibly underutilized. If I squint my eyes and cross them, I might see it blighted, but I can’t get there. I am not in support of this.”

And after three hours of discussion, the CDA voted to recommend the creation of TIF District No. 5, with Kinzel, Jack Arnett, Dale Lythjohan and Eric Arvold voting in favor and Eric Stelter, Andy Dettro and Joe Kassander opposing it.

Numerous residents voiced their comments during the public hearing.

“I ask that you oppose the TIF,” said Cedarburg resident Steve Brill. “There’s opportunity here; the door is still open. It’s confirmed tonight the property is still for sale. We need to think better. The city needs to buy this piece of land … we need to come up with a cohesive plan and put it out to bid. We now have a project that everyone can agree on (and) it will come back to the tax roll much faster. Hypothetically, I could see that in two to three years.”

Residents also questioned why a single family lot was included as part of the the proposed TID district when that was likely to be sold off and redeveloped separately from the Arrabelle apartment complex.

“Why can’t they sell this lot and it will be on the tax roll next year?” asked resident Richard Didier. “Why would you need a TIF district for a single lot?”

“I have concerns that if this gets approved, are we now opening the door for every other developer working on something with their hand out?” asked resident Linda Smith. “The Kettle Moraine Appliance building on Pioneer Road, that truly was a blighted property … a monumental project that he’s taking on. What if we decide that something is finally going to be developed on Madison, do we then have the taxpayers on the hook for that? The Weil Pump property? I think we’re opening the door for all sorts of other projects that we’re going to be paying for forever.”

Developer Tony W. DeRosa of HSI Properties started the meeting with a pre s e n t at i o n explaining why his company was now seeking TIF financing from the city. He also made the presentation to the Joint Review Board, which met prior to the CDA meeting.

“If this wasn’t absolutely critical to this project, I wouldn’t want to be here tonight,” he said. “Construction is to start this April and we’ve spent almost $300,000 to date on this project and we are fully committed to doing it.”

DeRosa noted that HSI redesigned the project five times, bid it out twice and added requested design elements, which raised the cost of the project over time.

“Hindsight being 20/20, maybe I should have said hold on, these are getting out of control,” he said. “But these do make Arrabelle special. It does truly fit the character of the community; these are standards that no other projects have been held to.”

CDA members asked if that project bids ultimately came in under estimates, the TIF funding amount could be readjusted to reflect the cost savings.

“I have no problem with that if this doesn’t cost us as much,” said DeRosa. “If we come in under budget, I don’t think we should be entitled to all the money.”

The motion to approve the TIF was made by CDA member Jack Arnett, who added two contingencies: that TIF funding be rebated if costs come in lower than expected and that a clause be added should the property be sold by HSI during the life of the TIF.

The matter is now scheduled for Common Council adoption Feb. 12 and will also need approval from the Joint Review Board, according to the project plan.

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