CDA approves tax plan for Amcast property
Process will transfer outstanding tax delinquency from county

By Laurie Arendt

August 16, 2018

CEDARBURG — The city of Cedarburg Community Development Authority unanimously approved an agreement Monday night that will eventually cancel the outstanding property tax bill due on the Amcast property at Hamilton and Johnson streets through a process known as tax in rem assignment and cancellation.

“This agreement will cancel the tax in arrears on the Amcast property, and as part of the redevelopment process, the county will assign the right to foreclose on the property to the CDA and (developer) DJ Burns’ company,” explained City Attorney Mike Herbrand. “The tax delinquencies are essentially frozen as part of the foreclosure process.”

This process can only occur if there is an entity in place to remediate the property, which is Burns’ company. In November, the CDA approved a developer’s agreement for the redevelopment of the property. Due to contamination on the site, remediation is required before any redevelopment can take place.

The approval of the agreement Monday night allows the county to assign the foreclosure judgment to the CDA and Burns, with the sole purpose of enabling Burns’ company to acquire government grants that will help fund the remediation process.

“There is very little to no environmental risk to the city in this agreement, correct?” asked CDA member Jack Arnett.

Herbrand noted that the city’s responsibility will only last a matter of moments as the transfer occurs.

“We have been working with our environmental counsel on this project and there would have to be some sort of environmental spill or situation that would occur during those seconds for the city to have any responsibility at all,” he noted.

 “If for some reason the county transfers this to the city and DJ decides not to pursue the development, what happens?” asked CDA member Dale Lythjohan.

“All of the paperwork will be signed before the judge signs the agreement,” said Herbrand.

Burns was in attendance at the meeting and noted that he already had the proper paperwork completed with the Department of Natural Resources and that the quitclaim deed, once signed, would divest the city of its interest immediately upon its execution.

According to Ozaukee County Treasurer Joshua Morrison, as of Tuesday, the property taxes due on the three properties that comprise the Amcast site were about $276,331, but that amount will continue to change on the first of each month as penalties and interest continue to accrue.

During the meeting, Arnett noted that there was an opportunity available for the county potentially to reclaim those funds in the future.

“With the taxes, should the Tax Incremental Financing district work out and pay off, they could be recovered in the end?” he asked.

“If after all the TIF costs are paid, yes, we left that opportunity in for the taxes to be recovered,” said Herbrand.

The CDA unanimously approved the agreement by a 4-0 vote, with Mayor Mike O’Keefe, Arnett, Lythjohan and Joe Kassander taking part in the vote. CDA members Eric Arvold, Eric Stelter and Andy Dettro were not in attendance for the meeting.

“I believe with interest and fees the county tax demand on the bankrupt Amcast property to be near $325,000,” Cedarburg Mayor Mike O’Keefe said Wednesday about the likely total tax tab on the property. “This could have sabotaged our intent to clean up and redevelop the property.

“The County Board, realizing this could have hindered the remediation of the severely contaminated and blighted property, graciously offered to forgive the tax debt on a bankrupt property to help make clean up and redevelopment possible. We hope, if possible, to use the TID to help the county recover some or all of the missed tax revenue they have lost to the insolvency of the property once the city investment has been recovered.”

The entire process is estimated for completion by the end of the month. The CDA also approved giving O’Keefe the authority to sign all required paperwork relating to the agreement.

<<EARLIER: County may forgive Amcast taxes