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Council inks deals for sprawling bluff development PDF Print E-mail
Community
Written by KRISTYN HALBIG ZIEHM   
Thursday, 03 August 2017 15:46

Firm to pay $2.3 million for Port land that promises to add $60 million to tax base once developed, officials say


    The terms and conditions of the sale of Port Washington’s south bluff land for one of the largest developments in the community were approved Tuesday by the Common Council.
    A formal land purchase agreement between the city and Black Cap Halcyon as well as a developer’s agreement for the project were approved by a 4-0 vote, with two aldermen, Mike Gasper and John Sigwart, abstaining. Ald. Jonathan Pleitner was absent.
    While noting the give and take of negotiations, aldermen lauded the agreements and the Prairie’s Edge development that will occur on the bluff.
    “I really think this is a unique project —it’s exactly what we were looking for,” Ald. Mike Ehrlich said. “I’m very excited about this project.”
    Ald. Doug Biggs concurred, adding, “This isn’t a good project, it’s a great project.”
    It will provide the city with almost $60 million in additional tax base, a mix of 238 residential units and 40,000 square feet of commercial space and ensure public access to the south beach and bluff, he said, with no developer’s incentives paid by the city.
    When the project is completed in 2023, Biggs said, it will bring in an estimated $934,000 to $1.09 million in tax revenue annually. Of this, he said, the city will receive $304,000 to $350,000 annually.
    And, he said, the subdivision will have private roads the city won’t have to maintain, and the homeowner’s association will provide trash and recycling collection.
    The south bluff property, which is directly south of We Energies, was acquired by the city in 2004 as part of an agreement allowing the utility to convert its plant to natural gas without city objections.  
    Earlier this year, the Common Council considered three development proposals for the land before deciding to negotiate with Black Cap Halcyon, a Milwaukee real estate investment firm, for the project.
    The purchase agreement approved Tuesday calls for Black Cap Halcyon to pay the city $2,257,086, or $64,000 an acre, for 35.19 acres. That is the appraised value of the land, Mayor Tom Mlada noted.
    Black Cap Halcyon will pay the city $22,570 in earnest money, plus $225,708 when the sale closes. It will then make principal and interest mortgage payments of $8,433 a month to the city — an interest rate of 2.08% annually — plus an additional $1 million payment when building permits are issued for the first phase of the project and $515,869 when the permits for the second and third phases are issued.
    The first phase of the project is expected to begin in March 2018, the second phase in July 2019 and the third phase in July 2020, Eberhardt said.
    The sale is to close by Feb. 20, 2018.
    The purchase price excludes the slope of the bluff, which the city will retain to ensure beach access in perpetuity, City Attorney Eric Eberhardt said.
    Black Cap Halcyon will also dedicate 5.09 acres adjacent to the bluff for public pedestrian trails it will build and maintain, the developer’s agreement states. If the firm doesn’t do this by June of 2024, the city can build the trails and assess the cost to the developer.
    Ideally, the trails will be constructed as part of the first phase of development, Tony Polston, Black Cap’s founder and principal, said, noting they are an attractive amenity for buyers and the public. However, depending on whether the property is needed for staging, construction of the trails could be done later in the project.
    The five acres is significantly more than the 3.12 acres a developer would typically be required to contribute for the project this size, said Randy Tetzlaff, the city’s director of planning and development.
    The intent is to have a stairway to the beach constructed, he added, but that will depend on whether the bluff is stable enough.
    Sigwart questioned why the city will retain ownership of the bluff, saying he preferred the city sell it to Black Cap Halcyon  and the firm provide an easement to ensure public access.
    Polston said the city believed ownership is important to ensure public beach access, adding that the community will be seeking grants to help pay for the trails and stairway and many of these require the land be publicly owned.
    Biggs also said it is important to retain the land, noting there is about 2,000 feet of beach.
    “The thing I’m hearing is we don’t sell public lakeshore,” he said.
    The development agreement calls for Black Cap Halcyon to construct a mix of residential, commercial and office buildings, as well as a potential private-event space. The residential units include apartments, townhouses and single-family cottages.
    Polston told aldermen that interest in the development is high, particularly by empty nesters, for the single-family cottages the company will build.
    The commercial space is something Ald. Paul Neumyer questioned, saying he doesn’t want to draw business away from downtown.
    Polston said his goal is to give people a reason to spend time in the subdivision but not compete with downtown, noting the uses he envisions include an exercise facility, medical service providers and perhaps a unique restaurant.
    “I think that would probably merit more discussion with the downtown community,” he said. “We don’t want to compete with downtown.”
    Black Cap Halcyon is allowed to lease the property to a tax-exempt entity but cannot sell it to such a group without the city’s approval, the agreements state.
    The agreements also state that Black Cap Halcyon will pay the city as much as $75,000 to reimburse it for engineering and professional services it incurs in reviewing the plans, and the city will pay Polston $56,427 to manage the project to completion.
    In addition, Black Cap Halcyon is to provide a life insurance policy on Polston with the city as beneficiary to ensure the purchase price is paid, the agreement states.
    The agreements also call for the city to extend sewer and water service to the edge of the subdivision. That was already in the works, since the utilities must be extended to the Cedar Vineyard subdivision south of Prairie’s Edge, City Administrator Mark Grams said. It will be paid for through the tax incremental financing district for that development.
    Sigwart initially asked that the vote be postponed until the council’s Aug. 15 meeting, but after a lengthy discussion of the agreements decided to abstain from the vote because they had not been reviewed by the city’s other committees.
    Gasper recused himself from the discussion and abstained from the vote because the firm he works for may be seeking to work on the development.

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