City rejects developer’s TIF request for bluff land

Port officials remind company that it pledged not to seek financing help for upscale subdivision
By 
KRISTYN HALBIG ZIEHM
Ozaukee Press staff

Port Washington aldermen on Tuesday were unanimous — there will be no tax incremental financing district for the Prairie’s Edge subdivision, which is planned for prime bluff land on the city’s southeast side.

Aldermen took no action on developer Tony Polston’s request for the creation of a TIF district and $5.25 million in TIF funding but made it clear they would not approve it. 

Every alderman spoke against approving Polston’s proposal.

“I’m trying to figure out why we’re doing all this. I just don’t think this qualifies for TIF financing,” Ald. Deb Postl said, noting the property is prime Lake Michigan bluff land. “TIF should not be offered to developers to manage their risk. I would be very disappointed if this happens.”

Ald. Dan Benning concurred, saying the property is “not a redevelopment, brownfield site ... which is what TIF funds should be for.”

Approving the funding would be “setting a bad precedent for the city,” he said. “We should not be a funding source for risk mitigation. I hope and expect this developer will be able to make this development happen sooner rather than later.”

“For this site, I certainly don’t think it qualifies for TIF,” Ald. Jonathan Pleitner said.

Ald. Paul Neumyer, who said he was the only alderman serving when three developers submitted proposals for the land and the Common Council accepted Polston’s, told Polston, “You weren’t talking about TIF at that time. One advantage we saw was that we weren’t going to need TIF. I would have a tough time supporting TIF at this time.”

Ald. Mike Gasper concurred, while Ald. Pat Tearney, who was on vacation but participated in the meeting via phone, said,  “There’s nothing about this project not to like except it’s asking for TIF. I cannot vote for this.”

Ald. John Sigwart told Polston that his 10-year timeframe for the development was “very aggressive,” adding that while the project is a good one it has “taken on a bit of an elitist air.”

“It turns out to be kind of a private community,” Sigwart said. “My feeling is the project is on the edge of being too big for Port Washington.”

Polston, who had sought the money to cover the cost of infrastructure and to offset the price of the public portions of the project, said the council decision was “disappointing but I understand it.”

He asked if there was anything the city could do to help, adding, “otherwise what I take away is you don’t have any suggestions or desire to work with us.”

That drew a response from City Administrator Mark Grams, who said it is unfair to blame the city at this point.

“Don’t put this all on us,” he said. “You’ve now changed the rules of the game. You said you would do your project, you would do it without TIF and you would move forward. Now you’re asking for $5.25 million.”

The city has extended utilities to the site “on our nickel,” Grams said, and agreed to work with Polston in applying for grants to help pay for the public amenities in his subdivision.

If the city had sought development proposals for the Prairie’s Edge land as part of a TIF district, Grams added, “We probably would have gotten twice the number of (proposals).”

Those proposals may not have offered the same purchase price for the land, Grams said, or the $90 million valuations that Prairie’s Edge promised, but it may have gotten a $50 million development.

The city sold the land to Polston’s company, Black Cap Halcyon, for $2.25 million, however it agreed to a payment plan tied to construction milestones believing work would begin last year. Polston, who said  he has already paid more than $300,000, must pay the entire cost by July 1, 2023.

Prairie’s Edge would be the city’s largest subdivision with 34 single-family lakefront houses, 16 pocket neighborhood single-family homes, 20 townhouses and 156 apartments as well as 40,000 square feet of commercial space.

But Polston said that since proposing Prairie’s Edge in early 2017, the economic and construction world has changed with trade wars and large projects such as the Foxconn development resulting in significant increases in construction costs. Increased competition in housing throughout the area, much of it supported by TIF funding, also impacts the development, he said.

Polston argued that the development would provide a multitide of benefits to the community that would offset the cost of any TIF funding, including bringing a significant number of new residents to the community who would support businesses and the downtown while also increasing the city’s tax base significantly.

If the city had approved the TIF payments, Polston said during a presentation preceding the council’s decision, “We’re ready to mobilize right away.”

Turning down the funding, he said, would “result in delays... something less than we envisioned. It’ll cost all of us money.”

But Grams said the city’s TIF consultant, Christy DeMaster, said the Department of Revenue told her the subdivision would not qualify for a TIF district because too much of the land is devoted to residential uses.

Polston disagreed, saying his analysis showed it would meet the state guidelines and he would work with the city to challenge that.

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