Submitted for Town Board Approval November 27, 2000
SPECIAL MEETING OF THE
TOWN BOARD OF SUPERVISORS
Municipal Complex - Assembly Room
Thursday, October 5, 2000
MINUTES
Agendas with resolutions were posted at the Municipal
Complex, Fire Station 40, Utility District, Appleton Public Library, Menasha
Public Library, and Neenah Public Library.
I.
CALL TO ORDER, PLEDGE OF ALLEGIANCE AND ROLL CALL
Town Chair Arden Tews called the Regular Meeting of
the Town Board of Supervisors to order at 6:00 p.m. and led the Pledge of
Allegiance.
Clerk Sprague noted the roll as follows:
PRESENT:
Arden Tews, Town Chair Jeanne
Krueger, Supervisor #1
Jerry Jurgensen, Supervisor #3 Keith Kiesow, Fire Chief
Russ Handevidt, Supervisor #4 Richard Eiberger, Town Assessor
Carlene Sprague, Town Clerk Carl Sutter, Town Engineer
Patrick DeGrave, Administrator Randy Gallow, Street Superintendent
Myra Piergrossi, Dir. of Finance William Weiss, Police Chief
George Dearborn, Dir. of Com. Dev. Ron Krueger, Parks Director
Karen Tweedie, Deputy Clerk Roger Clark, Town Atty. of Counsel
Ericka Leuffen, Attorney Judge Len Kachinsky
EXCUSED:
Bob Sprague, Supervisor #2
ALSO PRESENT:
Residents:
William Ottow Merle
G. Wendt
John Zaborsky Lee
Behling
Carol Bartlein David
Watters
Marge Riedel Jodi
Watters
Joe Riedel Alan
Pheifer
Patricia Lund Joe
Nemecek
Russell Lund Dawn
Thienel
Betty Zaborsky Jerry
Vieth
Harold Clifford Todd
Engleman
Residents:
William Behling Steve
Sipiorski
Cheryl Barth Julie
Sipiorski
Mike Barth Ann
Risgaard
David Risgaard Len
Kachinsky
Chuck Lewis Lee
Schwandt
Larry Neal Larry
Moye
Lois Grundman Keri
Walker
Jean Hesselman Jennifer
Land
Joe Trudell Mike
Land
John Schaidler Debbie
Moye
David Pheifer Mike
Thienel
Paula Pheifer Jatame
Schabo
Michael Lynch Wendy
Galley
Mary Hahneman Kris
Koeppe
Dale Hahneman Bill
Weiss
Scott Peterson Roger
Clark
Arden Tews Jerry
Jurgensen
Russ Handevidt Jeanne
Krueger
Carlene Sprague Patrick
DeGrave
Randy Gallow Len
Kachinsky
William Weiss Ron
Krueger
Sharon Rosenthal, Street Dept. Sec.
Non-Residents
Cheryl Hentz, Fox Cities Newspapers
Bob Pheifer
Doug Hahn
Carl Sutter
Erika Leuffen
Town Administrator, Patrick DeGrave provided
an overview of the Valley Gateway Development project. The Town has already
entered into an agreement with Valley Gateway Development Co. to do the
infrastructure construction in that planned development along Hwy CB and the
West American Drive extension. It is a mixture of retail, commercial,
single-family residential and multi-family residential development. The first
leg of that deal is complete, you’ve seen the extended road, you have seen the
multi-family going in. Carved out of the first deal was Gateway Meadows
subdivision. That’s 144 lots, part of the overall development, but not included
in the first infrastructure construction deal. The first deal requires the
developer to produce $75,250,000 worth of added value to the Town within 5 yrs.
Failing to produce that, the Town has a lien against the rights of the
property, to recoup that infrastructure investment if the numbers are not
achieved.
The Gateway Meadows subdivision portion of this is
going to have a different finance deal, should you vote to allow us to borrow
up to $2,000,000 to put in the infrastructure in this subdivision. It’s about 2
miles worth of road, sanitary sewer, storm sewer and water. It would be
borrowed through the Wisconsin Trust Fund at about 5-1/2% interest and over an
eight year period. The Developer feels he can produce about $42,000,000 worth
of added tax base or added value to the Town through just this subdivision. If
the money is borrowed, the debt service would be paid on a mixture of two
things. One is the Town tax that is derived from the value added to the
subdivision which would be diverted toward debt service on an annual basis.
Even toward the end, it will never produce enough Town tax to pay the debt, so
the balance will be paid by the developer in annual installments. We will
guarantee that the entire debt, principal and interest, can be retired through
an Irrevocable Letter of Credit drawn on a local bank, drawable only to the
Town of Menasha. The actual amount we’re borrowing will actually be less than
$2,000,000, or $l,700,000 and change. We will only use the amount necessary for
the construction. We’ll set up an eight year amortization schedule. If the
first year is, for instance, $270,000 as a debt service payment, it will
produce no additional value because of the way the assessment is completed.
There will be nothing new out there of any value by the first of the year. The
first payment is entirely up to the developer from his annual letter of credit,
so each year, he will be required to renew that, prior to the expiration of the
first one. We will always have a valid Letter of Credit in our hands in the
full amount of the remaining debt. Should the developer fall short of his
portion of the payment, the letter can be drawn in it’s full amount, and the
debt retired.
He feels he can produce $42,000,000 worth of
additional value within the first six years or less, so his performance pays.
If he can produce that, there’s $42,000,000 of Town tax that would go toward
paying that debt. The more value from tax, the less he pays for. If he performs
zero in six years, he pays for each year of the six years, the full amount. We
are assured as taxpayers, we do not have to pay from the General Levy. It’s
simply the value added from that specific parcel of land.
The entire Valley Gateway Development, when coupled
with the anticipated value added from the subdivision, about $40,000,000, with
the $75,000,000 that’s anticipated for the retail and commercial, you have in
excess of $110 - $115 million dollars worth of additional tax base for this
Town. It’s an area of the Town, and it is apparent, that people want certain
retail development like a grocery store, and streets.
Town Attorney, Roger Clark, stated
that when this initial proposal was made by Valley Gateway, they came to the
town with a proposal that would allow them to develop an entire area, in other
words, plan several hundred acres. The initial phase was desirable to the Town.
That is the reason why the Town wanted to enter into an agreement with the
Developer to encourage this development at the same time, being able to develop
West American Drive. They came to us as the lawyers, and asked whether that’s
legal and whether the agreement is appropriate, and in fact, it is. It’s in the
Town’s interest, the Town Board knows it’s in the Town’s interest to have
orderly growth of the Town, in this way, the plan was approved before it went
into place. There are also assurances by the Developer that there will be
development at a certain rate or the developer will pay all the costs. So it is
a benefit to the developer who can obtain financing at a better rate than he
can go and get from a bank. At the same time, the Town is assured that it is
going to have its money returned.
I've been asked to draft an ordinance that will guide
the Town when future developments seek financial assistance from the Town. The
ordinance will modify the existing development ordinance to be consistent with
the type of development that has been proposed by Valley Gateway. We, Roger
Clark and Administrator DeGrave, have met with the Town's financial planner who
indicates that in order for a development to warrant Town participation, it
should dedicate no more than 1/3 of the total property to residential. The
remaining 2/3's should be a blend of industrial, retail and commercial. In
order to be consistent with the Valley Gateway Development, future developments
seeking financial participation from the Town must be 200 total acres or more.
Developments less than 200 will not produce the level of added value to justify
financial participation. If a developer can meet the criteria set in the new
Town ordinance, the Town Board should be willing to consider financial
participation. In my opinion, this proposal is in the best interest of the Town
of Menasha and will promote orderly growth of the Town's center. You are here
to authorize the borrowing through a Special Town Meeting. If you don't
authorize the borrowing, the Wisconsin Trust Fund will not loan the money to
the Town.
Supervisor, Jeanne Krueger, asked
about the 5-1/2% interest rate for the borrowed money. When the money is paid
back, at what rate will the developer pay the Town back?
Attorney Clark states that the previous agreement has
a 1-1/2% add-on for an administrative overcharge that the Town uses to cover
that.
Town Resident, Bill Bailing, 1763 Oakridge Court, asked
whether other townships have entered into anything like this? If they don’t,
why should we?
Administrator DeGrave advised that interest in excess
of borrowed funds is not part of this deal.
Attorney Clark stated that he has produced a
development agreement similar, for the Town of Scott in Green Bay. This has
also been promoted by the WI Town’s Association.
Resident, Bill Bailing – What happens if this
Township goes bankrupt, or out of business?
Administrator DeGrave pointed out that the developer
will go to a local bank and purchase an Irrevocable Letter of Credit in the
amount of the principal and interest, good for one year. Prior to the
expiration of the Letter, they will owe the Town a certain sum of money to make
that annual debt payment, in addition to a new Letter of Credit in the new
balance amount. If the developer "chooses" not to pay the debt, we
will draw on the Letter of Credit. It’s a guarantee so the developer cannot
avoid or cancel on the Agreement or the Letter.
Resident,
Bill Bailing – What happens if this does not get done in eight years?
Administrator DeGrave – The loan for the construction
is for the full 2 million dollars. You can borrow the amount you need and the
rest would stay with them so that you do not necessarily have to use the full
amount.
Construction will be done by the year 2002. The bulk
of the construction would be done in the year 2001, except for the final layer
of asphalt. The amortization is an eight year deal, so in the nineth year, if
there is $42 million worth of value out there, then the Town keeps the tax
money for Town purposes at that point (instead of debt service).
Resident, Bill Bailing asked, "What this will do
to the Town payroll? How many more people are you going to need, or what will
you need to take care of this area?"
Administrator DeGrave responds that there should be
minimal services with no anticipated need for additional people.
Resident, Harold Clifford, 1225 Glenview Drive, made a
statement. "For many years, the Sanitary District worked very closely with
all developers. 100%, I would say. There was one difference. The developer
always knew that financially he had to supply the money, not the tax payers of
the Town of Menasha."
I have some figures, this is the equalized value (in
the 90’s which has just been completed): In 1992, the equalized value was $650
million
In
1993, the equalized value was $725 million.
In
1994, $770 million
In
1995, $861 million
In
1996, $916 million
In
1997, $995 million
In 1998, One billion, 36 million dollars
I don’t understand what the big hurry is to get that
one last lot filled? I believe that the system we had was a quite sound one.
Why are we shifting and using a developer?
Why do the taxpayers have to bear this burden?
Chairman Tews – The developer came forward with
this proposal and we had Administrator DeGrave and our Attorney look at it and
bring it to the Residents.
Robert Phiefer, (Phiefer Bros. Construction Co. on
American Drive) – I am not a resident of the Town, but as a developer
of the Town of Menasha I feel I’ve paid my fair share of taxes and I’d like to
explain our position. In the 70’s, Pheifer Bros. had a vision of an industrial
and business park in the Town of Menasha. We feel the Town is an excellent
place for a developer to develop property. We are not opposed to development
and feel the Town of Menasha is the best place to do it. American Industrial
Park was an ideal place because of the railroad and Hwy. 441 in proximity to
it. We acquired the property of about 300 acres (similar to Gateway’s
acquisition), the Walter Danke Farm, the Roy’s A Farm on south side of railroad
tracks, and two others on the north side of the tracks. All of the
infrastructure costs were borne by Phiefer Bros. Construction Co. We had to provide
a financial guarantee, ie: Letter of Credit, or escrowed money. We used both
methods in various stages of development.
Regarding the real estate tax base that our
Industrial Development has created for the Town of Menasha, there is about
$25-30 million of tax base generated already, about 20 businesses, about 25-30
residential lots in that area. That is a buffer between the Residents and the
industrial park.
"A Developer is an entrepreneur, is a gambler,
and he’s a speculator." I don’t believe the Government should be using
taxpayers dollars to develop the Town of Menasha".
This Board, back in December 7, 1999, at a Town
Meeting similar to this, authorized $5,799,314 for highway expenditures. The
Minutes reflect that it took 7 minutes to approve borrowing almost 6 million
dollars. Now this Board is asking the taxpayers to consider borrowing another 2
million dollars to improve the property for an out-of-town developer. It is
best that these people that are going to be voting today, vote "no".
I can not vote.
Dir. of Finance, Myra Piergrossi, stated
that we did have over $5 million dollars for the project budgeted, however, we
did not borrow all of that. We only borrowed $1.6 million this year, for street
and road projects. That was the reason for this special meeting. It was not
listed in our Capitol Projects listing.
Chairman Tews – Bob, also some of those projects, if
we did them, are accessible back to the property owners. For example, there was
a $1,945,000 project for Cold Spring Road from Jacobsen Rd. to Shady Lane,
which we did not do. That is only one example. We’ve kept our borrowing close
to the belt even though it was in that meeting. We did not go out and borrow
it.
Resident, Leona Behling, 1763 Oakridge Ct. - After
listening to this talk, I have one concern. It was stated in the paper, and
stated in the meeting tonight, that unless the Finance Director for the State
hadn’t told you that it was up to the voters to decide this, this would have
passed without us even knowing about it. So, what you basically said is, you
think this is the thing to do and you don’t care what the other tax payers
think, until somebody else told you that you had to get our okay.
Chairman Tews spoke. We went and asked for the loan,
but we never had a resolution before this Board. There are five people up here.
I don’t know what any one of them would have voted.
Supervisor Jurgensen stated that even if you as
electors approve this tonight, this Board has not approved it yet. This
Authorization simply says that if the Town Board decides to go ahead with the
Agreement, that they can then borrow the money. It doesn’t tell the Town to go
ahead, and the Town Board has not acted to approve this Agreement, its still in
the negotiation stage. It is just that the Town Board is aware, or became aware
that it wouldn’t do any good to consider it at all because the State Trust Fund
needed your approval. So we came to you first.
Leona asked, "What if all of these businesses
have been build and filled? Will that give you enough tax base to be worth
while? What if we can’t fill those businesses and we have put this money in to
all of this?"
Administrator DeGrave stated that you have to look at
two different things. Can they get the businesses in and constructed? That is
their requirement under the first deal. From our investment perspective, that
is what we have required them to do. They must meet the benchmark of
$75,250,000 in the first two years, or we will start to apply assessment (or
liens) against the property. Whether they can build them or not is a
fair-market issue. Are there enough people to fill jobs and utilize commodities
offered is also a fair-market issue.
Chuck Lewis, 2167 Woodlawn Lane (Member
of the Planning Commission) - It has been my observation that the Town of
Menasha has lead the way among the towns in this area, in intelligent
development planning. One, by having a professional Director of Development,
George Dearborn, and the other was the a very comprehensive development plan.
The Town took the development in the direction of American Drive.
One of the things the Planning Commission
appreciated, when Gateway Development came on the scene, is that it instantly
reduced the biggest problem we have in development on the Planning Commission.
That is the proposal from developers for creating development on existing
property within the established areas of the Town.
The reason for looking at the Gateway Development was
because it incorporated not only single-family, multi-family, and commercial
development, the latter of which have been the major sources of contention when
developers come forth for proposals in these established areas. It satisfies
the need for both multi-family and commercial, which have not generally been
very well received in existing neighborhoods.
If we can take advantage of the State’s guarantee of
borrowing for up to $2,000,000, let’s take advantage of it and let’s expedite
the recovery of the tax money which allows the developer to go that much more
rapidly. Then, by all means, let’s do that.
"This may set an example for other developers
for the circumstances they had to work with in the past. Let’s make this an
encouraging step for developers to do this same thing in other areas". I
trust that the Residents will look at this objectively and be able to find
their way to support this.
Resident, Steve Sipiorski, 1917 Shady Springs Drive - My
understanding is that for the first 8 years of this project, all tax dollars
that we get from this property will go to pay off this debt. We, the Residents,
will be subsidizing the police and the fire, and that is fine.
More rooftops mean faster retail growth. If I were a
developer, I would have thought of the retail before I came in with the
commercial. It’s almost as if the commercial is not coming in fast enough, so
let’s go ahead and get some money for retail so we can make our plan work.
I know development is coming, whether I subsidize
this plan or not. But let it come in it’s own time, and not by the assistance
of the taxpayers.
Resident, Dave Pheifer, 988 Millpond Lane – When I
bought in to my subdivision, the developer had to pay for the sewer and
streets, and curb and gutter. It all got passed on to them. I still continue to
pay my taxes. Now for 8 years, I’m going to subsidize a new subdivision in
addition to the paying of taxes and development in the subdivision I live in.
With the amount of development that we have seen in the Town of Menasha, and
all that has been contributed, I see no need to continue to subsidise more, to
jeopardize the developers that we have in our Town that are local.
Resident, William Ottow, 1376 Dunning Street – Are we
setting a precedence? I’ve got the answers without having to ask the questions.
Yes, it is a secured loan, and yes it does set a precedence. Our Attorney, Mr.
Clark, has done a good job. The 200 acres selection, the dollar amounts set.
"We ought to be proud that somebody wants to develop here because it could
go to Grand Chute or somewhere else… This is our Town and if we don’t grow,
somebody else will."
Resident Keith Kiesow, – What
would happen if they completed the project in four years instead of taking
eight years?
Administrator DeGrave hesitated
to answer because of negotiations with regard to the terms of the agreement.
The meeting tonight is either to borrow the money, or not borrow the money. How
it gets repaid as I’ve indicated has an assurance relative to that Letter of
Credit. It can be amortized over eight years and simply structured to the point
that it could fill up in two years, or could never fill up. It doesn’t matter.
The payments are the same no matter how much the developer pays, or how much
tax money would be used towards the payment. If it filled in six years and the
developer said, at this point I want to get out of this, there would be a
pre-payment allowance through the State. Whether it will be allowed is still to
be negotiated. The later years are when the developer would reap the greatest
rewards, when the most value would be there. Will he want a quick buyout after
six years and just walk away? It’s unlikely, but still in negotiation.
Richard Eiberger, Assessor, stated
the economic viability of the Fox Cities. People who come from other areas
cannot believe how wonderful everything is here, but that doesn’t happen by
accident. That happens by planning. It happens by investing in the future, in
our community. No other community in the Fox Cities has set a stage for growth
to occur. You’ll be driving on this highway in the fall of 2003 all the way out
past Waupaca in a four-lane environment. I’ve already shifted values this last
year from farm vacant land to $25,000/acre to start. Over $5 million dollars
for this tax base alone. I’m looking at another $12 million dollars for the
coming year just for this project alone. Another project I got involved with on
West Prospect is Touchmark Living Care Center. A $25 million dollar project was
brought to this community. Demographics and taxes made them decide they wanted
to be in this community.
Resident, John Schaidler, 623 E. Shady Lane (on
County Board, Supervisor for Dist. 28 & Chairman on Planning & Zoning
Committee for the County) – How many tax dollars are we going to forego in that
eight year block of time?
Administrator DeGrave – Over an eight year period, if
it builds at $9 million dollars each year over years 2-5, and $6 million
dollars in the 6th year. That would be $871,000 of tax credit
diverted toward debt.
John Schaidler stated he believes in orderly
development and is pleased with Mr. Dearborn and his input into this process.
He thinks it is a wonderful process due to the fact that it includes retail,
commercial and residential. I encourage everyone to vote for this. It is a very
creative approach and it takes towns and allows them to move into a Tiff
District, which has been denied to towns for a long time.
Resident Mike Land, 1277 Cold Spring Road – We moved
here from Indiana about 18 mos. ago. We looked at property and we personally
haven’t been able to find that. We’ve looked in Kimberly, Greenville, Darboy –
we want to stay in the Town of Menasha and I will be one of the first people to
buy a lot. I owned a retail business for 13 years before we moved here and if
the houses, and the people are there, the retail will come. The retail will be
successful, so I support.
Administrator DeGrave – Available to you when you came
in was a sample motion. The motion will come from the floor, but I’ve provided
this as a place to start. Bottom line, it says that you would authorize this
Town to borrow up to $2 million dollars, not to exceed. It also has the other
dollar amounts built in, so you understand what the money is going for and, of
course, the loan will not exceed the actual construction. If you’re happy with
this format, then the motion can simply be to adopt this Resolution, otherwise,
it can be modified from the floor.
MOTION: John Schaidler, second John Zaborsky to
authorize funds for the Town of Menasha to borrow for the highway construction
as stated on Resolution #0001005-1.
Town Clerk, Carlene Sprague asked all
people to be seated, and stated that only Town Residents may vote. Please stand
when voting. Clerk Sprague asked those Town Residents who were in favor of the
resolution to stand. The vote in favor of the resolution was 36. A tally slip
was also required to be shown, indicating that these people were Town of Menasha
Residents.
Chairman Tews asked, "Are there any questions
before we vote? Chair Tews also asked that those Town Residents who were
opposed, stand with tally slips.
Clerk, Carlene Sprague counts. 21 – OPPOSED
Chair Tews reads the vote again, 36 YES – 21 NO.
Motion carries.
At
7:25 p.m., MOTION: Supervisor Jurgensen, second Supervisor Handevidt to adjourn
the Special Meeting of the Town Board of Supervisors. Motion carried
unanimously, with Supervisor Sprague excused.
Respectfully
submitted,
Carlene
L. Sprague
Town
Clerk