Subdivision delay leaves city waiting for money

Developer pauses start of project amid uncertainties while Port borrows to cover funds company owes

A SIGN AT the entrance to what will become the Prairie’s Edge subdivision on Port Washington’s south bluff is set near the intersection of South Wisconsin Street, seen in the background, and Highway C. Officials had expected work on the subdivision to be underway, but developer Tony Polston said he is continuing to analyze the project and has not set a date for the start of construction. Photo by Bill Schanen IV
By 
KRISTYN HALBIG ZIEHM
Ozaukee Press staff

Port Washington officials expected construction of the Prairie’s Edge subdivision on the city’s southeast side would be well underway by now, but the land remains fallow, undisturbed except for a couple of signs advertising what is to be the city’s largest subdivision and developer Tony Polston of Black Cap Halcyon said he has not determined when construction will start.

“There are just a lot of moving parts,” Polston said. “Right now, we’re pausing. We’re in a position we could go right away or we could wait. We’re trying to evaluate and mitigate the risk we have before taking on any more risk. I think that’s the prudent thing to do.”

That delay, however, has left the city in a bind. It sold the roughly 35-acre parcel for Prairie’s Edge to Black Cap Halcyon last year for $2.2 million, but that amount is payable in installments pegged to development of the site. Anticipating funds from the development, the city purchased $1 million in capital equipment last year and planned to spend $370,000 this year, then had to borrow money to cover the expenditures because the development has stalled. 

The city is also anticipating the increased tax base, estimated to be almost $60 million, and the additional residents who will patronize downtown businesses, adding to the vibrancy of the community.

Prairie’s Edge is expected to include 34 single-family detached cottages, 16 detached pocket neighborhood homes, 24 townhomes, 156 apartments and approximately 39,000 square feet of commercial space. 

There would also be a variety of public amenities, including trails and a bluff walkway that would help connect the subdivision with downtown.

City Administrator Mark Grams said the city agreed to the payment plan with Black Cap Halcyon in part because officials believed development would begin promptly and continue at a relatively rapid pace, adding that even if no work is done Black Cap Halcyon is required to pay the entire cost of the land by July 1, 2023.  

“He built confidence with us that he was going to do this,” Grams said, adding that the lack of development is “disappointing.”

But, he added, timing is everything and “in the end the timing hurt him (Polston) a little bit. I think he obviously would rather do something sooner than later. The market’s hot.

“Obviously, his costs have gone up higher than expected,” Grams said, noting that the cost of materials and labor have significantly increased in the past year. 

Those costs have been influenced by national issues such as the trade war, tariffs and the booming economy, as well as local issues such as the progression of nearby developments, Polston said.

“Material prices are up. Labor prices are going up,” he said, adding that trying to manage those constantly moving costs is like “herding cats.”

If the Cedar Vineyard subdivision planned farther to the south of Prairie’s Edge moves ahead, Polston said, the city will extend utilities along Highway C and he will be able to tap into them, potentially lowering his costs. Otherwise, he will have to extend the utilities through his subdivision.

The potential sale and development of 23 acres of We Energies land north of Prairie’s Edge could also affect the development, Polston said, depending on what the property is used for.

He said he has talked to the Ozaukee Washington Land Trust in an effort to see that land used as a park or nature area, adding Black Cap Halcyon has budgeted money toward that effort. He can’t afford to buy that property, Polston added.  

Right now, he said, Black Cap Halcyon is taking its time to try and ensure it has anticipated all the factors that will affect the subdivision.

“We’re focused on mitigating our risk before we put a shovel in the ground since that really doubles our investment,” Polston said. “We’ve got a lot of money into this already. We need to know we will recover our costs. Making sure we feel we’ve covered everything in a down-side scenario is real important to us.”

He noted that the firm has tweaked its design for the subdivision and is bringing in Lakeside Development of Mequon to design and build some of the homes.

Polston originally planned to build the subdivision in three phases but has since tweaked his design plans and committed to a two-phase development of the site. 

Work will begin on the central and southern portions of the site, where the apartments, 16 pocket-neighborhood homes, as many as 20 townhouse condominiums and 17 single-family lake homes would be built, with the northern property developed in the second phase.

But when that will happen is still up in the air, he said.

“We’ve had a lot of interested buyers contact us, and they want to know the same thing,” Polston said, noting the firm has a reservation list for the units. “We look at this as a 40-plus year investment. It’ll take a long time to build it out, probably 10 years.

“I’m not comfortable putting out a start date yet. A few more weeks or months or even a year is reasonable to make sure we get it right in the long term.”

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Wisconsin’s largest paid circulation community weekly newspaper. Serving Port Washington, Saukville, Grafton, Fredonia, Belgium, as well as Ozaukee County government. Locally owned and printed in Port Washington, Wisconsin.

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