Newport Shores TIF deal expected in March

Representatives of Ansay Development told the Port Washington Common Council on Tuesday that they expect to have a tax incremental financing agreement for their Newport Shores development ready for approval in March.

Ian McCain, Ansay’s design/construction manager, told aldermen that this would allow the firm to move forward with the $20 million project by late summer. Completion is expected in the fall of 2020.

Ansay has not yet announced how much it is seeking in TIF funds, but the city has conducted a preliminary analysis using amounts of anywhere from $2.6 million to $5.7 million, all of which show the funds would be repaid by the time the TIF district expires in 2038.

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.

The city can negotiate such things as how long it is willing to use the increased taxes to repay the developer and the amount of money it is willing to give the developer annually, City Administrator Mark Grams said.

“We have a considerable risk we’re taking on this project,” McCain said. “This (TIF funding) will help us offset that risk.”

Changes in the timing of the project or the impact on the taxes raised by it can only hurt the firm, not the city, because it is a pay-as-you-go TIF, he said.

“We have to deliver,” McCain said.

Ald. Dan Benning asked what exactly the TIF funds would be used to finance, something McCain said is difficult to outline. However, he said, “there’s no reason we can’t come to an agreement” to only use the money for construction costs.

Grams noted that the city built restrictions into its developer’s agreement for the Harbour Lights project that restricted the use of TIF funds to approved costs that could be used as a model for its agreement on the Newport Shores project. 

Ansay Development unveiled plans this spring for 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.

The TIF funding is essential to the project, McCain told aldermen.

“Without the TIF we can’t move forward with this,” he said. “It’s a factor of the environment we’re in.”

The costs of construction over the last couple years have “exploded,” McCain said, and the cost of real estate has increased significantly as well while the sales prices for housing has not kept pace. 

But Ald. Mike Gasper questioned whether the city should approve TIF funding, adding he wants to see an analysis that also looks at what the maximum use of the site would be without TIF funding.

That would allow the city to determine if the project is one it should invest in, he said.

“What is the maximum potential we could get out of this site without TIF money?” Gasper asked. “How good a deal is it really for the city?”

McCain noted that Newport Shores owner John Weinrich is a part of the Ansay team working on the project, so no other improvement is likely to be made.

“This is the direction he’s moving in,” McCain said. “It’s really a question of do you want this project or don’t you. There isn’t an alternative.”

Other aldermen said there are too many variables to predict what alternative plan might be proposed for the site otherwise.

Gasper argued that with a TIF, the city picks up the cost of extra city services, such as police protection, but doesn’t receive funding for it until the TIF ends. This, he said, needs to be factored into the cost.

But Grams said there are few if any additional city costs for this project, noting there will be little additional police or fire services needed and no additional street projects.

Ansay, he said, will pay to relocate the Kiwanis shelter and the city’s fish cleaning station as part of the project. 

Outside of the money aspect of the project, McCain said, the development will provide the city with several new businesses that will draw people to the lakefront as well as potentially 30 families in downtown who will patronize downtown shops and restaurants and pay taxes.

“We need that density,” Ald. Mike Ehrlich said, noting that planning officials have “said over and over that to be a viable downtown, you need people living there.”

The TIF agreement, which Ansay representatives will negotiate over the next month, is one of the few approvals the firm needs to move ahead with the project, McCain said.

The city needs to give final approval to the new locations for the Kiwanis shelter and fish cleaning station, he said, and they have to come up with a developer’s agreement as well.

McCain also noted that some people have expressed concern that when the Newport Shores development is under construction, access to the breakwater will be limited, if not eliminated.

That is not the case, he said.