Council OKs $330,000 in TIF funds for apartments

Port Washington aldermen on Tuesday agreed to pay Ansay Development as much as $330,000 to help pay for remediation and demolition on the former Victor’s property near the city’s lakefront.

A developer’s agreement between the city and Ansay that outlined the terms of the development incentive through the city’s tax incremental financing district was approved on a 5-1 vote, with Ald. Mike Gasper dissenting.    

Ald. Jonathan Pleitner was absent.

Ansay is planning to construct two four-unit townhouse-style apartment buildings on the site — one of several residential projects recently approved for the city’s marina district.

Ian McCain, Ansay’s design/construction manager, said demolition work could begin as soon as next week, with construction of the southern building on the site potentially beginning in July.

“I’d love to have something up by the end of the year or beginning of next year,” he said.

To finance the incentive, the city will apply for a Wisconsin Trust Fund Loan, City Administrator Mark Grams said.

Increased taxes on the property will be used to repay the loan, he said. The developer’s agreement specifies that if the increased taxes don’t cover the debt service payments, Ansay will have to make up the difference.

That’s expected to occur for the first year or two of the project, Grams said, adding the project is expected to pay off the loan within 15 years.

If the increased taxes cover more than that cost in later years, the agreement states, Ansay will be reimbursed for these payments.

Gasper, who said he has concerns in general about the use of TIF funding in the downtown district, questioned whether the money is truly needed for the project.

“You have to look at what would happen without the TIF,” he said. “Would it sit empty? I don’t know.”

Although the city considers whether TIF projects will pay for themselves over the long term, Gasper said, officials should also be looking at whether it’s a good long-term investment for the community.

“It hasn’t been demonstrated to me that this is a good investment,” he said.

But Ald. Mike Ehrlich disagreed, saying  one of the city’s long-term goals has been to ensure there is residential development in the downtown that will support the businesses there.

“It’s not just looking at this one little development. It’s the big picture,” he said. “We didn’t just jump into this asking, ‘Is the TIF going to be paid off? We looked at this carefully. This is a catalytic development — it’s going to create a sustainable downtown.”

A belief that the development will benefit downtown isn’t enough, Gasper said, adding he wanted to see facts and figures to back it up.

“There is no cut and dry with it,” Ehrlich said. “You have to look at things beyond the math.”

Ald. Paul Neumyer concurred, saying it’s vitally important for the city to support its downtown.

“We’re trying to attract people to downtown,” he said, adding the developer isn’t going to “put their money into something that isn’t going to succeed.”

McCain said the city sought a project on the property that would bring vibrancy to the area.

“I think that’s what this delivers,” he said.

In the developer’s agreement, Ansay states that the project would not occur without the TIF funds. Ald. John Sigwart asked whether the city applies any test beyond the developer’s word to ensure that’s the case.

He also questioned the need for funding to help cover the cost of demolition, saying that’s a cost the developer should be prepared to pay himself.

“That’s bothered me from day one,” Sigwart said.

Grams said the agreement limits the use of the funds to remediation and demolition. If the actual cost is less than the $330,000, that’s all the money the city will pay, he added.

“They can’t use it for just anything,” he said.

The funds won’t be paid up front, he added. Instead, the agreement specifies that 52% of the funding will be paid after the footings and foundation for the first building are installed with another 10% paid when the roof has been installed on that building.

Another 31% of the funds will be paid when the footing and foundations of the second building are installed, according to the agreement, and the last 7% paid when the roof is installed on the second building.

The Lake Harbor Loft project will include eight apartments of about 1,700 square feet, each with a 400-square-foot garage and a private rooftop deck.