Council agrees to TIF funding for another lakefront project

The Port Washington Common Council on Tuesday approved, 5-2, a pay-as-you-go tax incremental financing district for Ansay Development’s Newport Shores project and authorized city staff to negotiate a development agreement to reflect that.

The TIF would pay for itself by 2035,  and allow the city to close the district in 2035, three years earlier than originally planned, officials said.

  The agreement approved Tuesday allows the city to retain 5% of the increased amount of taxes received on the property, an estimated $16,000 annually through 2035, for administrative services it provides, while giving Ansay 95% of the funds to offset its costs.

That money will be used to pay for the public aspects of the project, including public spaces in the building and moving the fish cleaning station and Kiwanis pavilion, said Ian McCain, Ansay’s design/construction manager.

“We know this has to have TIF support,” McCain said. “What’s driving this discussion is the cost of the public components.”

Aldermen Mike Gasper and Pat Tearney dissented. Gasper, noting that aldermen had received an analysis of the proposed TIF financing earlier Tuesday, argued that he needed more time to review the report before making a decision.

He made a motion that the council delay action on the proposal, but it failed 6-1.

Gasper, who said he had no problem with the overall Ansay project, said his issue is with the TIF.

“The more I learn about them, the more I fear them,” he said, adding he believes the state should abolish them. “I don’t think TIF is meant to make sure a project is profitable, which is what I think is happening here.”

He suggested that the city not approve the funding but instead wait for another development proposal for the site, but McCain said there are no alternative plans for the site.

Other aldermen praised the proposed development, saying it will revitalize the lakefront and, because Ansay is seeking a pay-as-you-go TIF, there is no risk to the city.

Unlike most TIF financing, where the city provides funding up front and is repaid through increased taxes on the property, this project is a pay-as-you-go TIF where the developer takes out the necessary funding and is repaid through the increased taxes.

If the development does not produce the revenue needed to pay the costs, the developer has to make up the difference.

Officials also cited the impact the project will have on the community, with Ald. Jonathan Pleitner calling it “transformative.”

“This is a catalytic project,” Ald. Mike Ehrlich said, saying its benefits go beyond the development itself to increasing traffic in the city and creating more activities that will draw tourists and residents alike to the lakefront.

“You have to look at the benefits the city is getting beyond the numbers,” he said.

Ansay Development has proposed constructing a modern building  with a mix of uses — as many as 30 condominiums, office space, a store, restaurant and rooftop pub — to replace the current Newport Shores restaurant on the Port Washington waterfront.

The L-shaped building, which features a bold, glassy design, would encompass not only the eatery, but also two structures to the west owned by Newport Shores proprietor John Weinrich and a portion of the city-owned property south of the restaurant.

In return, the city will be given land along the lakeshore.

“It allows the city to own all the (lakeshore) land from Upper Lake Park  to the Harborview hotel,” City Administrator Mark Grams said, and control of the lakefront to south beach. “It’s a unique opportunity to own all this.”

McCain said the $20 million project will provide a number of other public benefits. As many as 130 jobs will be created at the peak of the construction, and property values in the marina district will be enhanced.

The development will increase the city’s tax base significantly, he said. 

Grams said the property currently is valued at $690,000 and generates $13,600 in taxes annually. The new development would bring in an estimated $320,000 annually in property taxes.

McCain said Ansay will be asking the city to vacate Jackson Street, which it would then maintain. However, he said, the company is committed to maintaining public access to the lakefront and breakwater and allow public parking there.

“In no way does this eliminate access to the public of the breakwater or lakefront,” he said. “There won’t be a season without it (even during construction).” 

McCain told the council that action is necessary so the company can proceed with its plans and begin preselling the condominiums.

The company anticipates breaking ground after Labor Day and completing construction in about a year, McCain said.

Grams told aldermen they will have another chance to vote on the TIF proposal when the development agreement is brought before them for approval as early as April 3.