TID 5: Investing in the Next Generation of the Former Bucyrus Campus, and Downtown

When it comes to redeveloping South Milwaukee, we control our own destiny — but only if we take proactive steps to invest in that rebirth.

Well, it’s coming together. Incredibly quickly. And we’re ready.

From passing our comprehensive plan to creating the Bucyrus Downtown Revitalization Grant Program to seeking and receiving the Bucyrus Foundation grant for economic development to earning Economic Opportunity Zone status — among many other efforts across the city — we are bringing a number of initiatives forward to make the city an active partner in our revitalization.

The latest tool under consideration is a significant one: Creation of a new tax incremental financing district (TID) in our city center, to support redevelopment of the former Bucyrus campus, parts of Milwaukee Avenue and some of our more challenging sites in and around downtown.

It’s TID 5, and Biz Times wrote about it today, and shared the name of the prospective buyer of the former Bucyrus campus south of Rawson Avenue: Reich Brothers Holding LLC.

From the story …

A New York-based company specializing in acquiring closed factories and redeveloping them has a large portion of the Caterpillar campus in South Milwaukee under contract to purchase.

The southern portion of the Caterpillar complex in South Milwaukee, which is under contract to be sold to New York-based Reich Brothers Holdings. Photo provided by Colliers International Wisconsin.

Reich Brothers Holding LLC plans to buy the 32.5-acre site, the southern portion of the Caterpillar campus in South Milwaukee, from Great Neck, New York-based One Liberty Properties Inc. for an undisclosed price within the next few weeks, said Michael Reich, vice president and director of acquisitions and business development.

The property, which is listed for $15 million, includes eight buildings with 519,712 square feet of industrial space and 230,000 square feet of office space.

Reich Brothers Holdings and Rabin Worldwide purchased the former Oscar Mayer complex in Madison last fall. Reich Brothers is managing the building, which includes 280,000 square feet of office space. …

Michael Reich said the Caterpillar property in South Milwaukee is similar to the former Oscar Mayer complex in Madison in the sense that it is a shuttered manufacturing plant that needs to be repurposed. But, Reich said the future of the South Milwaukee complex remains fluid.

“There are a lot of components to (the Caterpillar site),” Reich said. “We will release more details after we close.” …

South Milwaukee Mayor Erik Brooks and the city council have been working since 2016 to come up with a plan for the future of the Caterpillar site and its surrounding area. Once Reich Brothers purchases the property, $75,000 from the Bucyrus Foundation can be used to develop a master plan for the campus.

On June 25, the city plan commission will hold a public hearing and consider $4.5 million in public financing that would cover 59 acres including the Caterpillar campus and portions of downtown South Milwaukee along Milwaukee Avenue and the Chicago Avenue Corridor.

The sites include an abandoned gas station, a vehicle storage facility, the city’s former water tower site and the former Bucyrus Club building that was once used as South Milwaukee’s community center and was most recently home to Papa Luigi’s Pizza restaurant, Brooks said.

The proposed tax incremental district comes at a time when South Milwaukee has an important redevelopment opportunity ahead of it in the heart of the city, Brooks said. The map for the district was drawn to effect as much change as possible, Brooks said.

“We met with the prospective new owner (Reich Brothers) several weeks ago and are really excited about the possibilities,” Brooks said. “We want the new owner to be an active re-developer who will work at bringing new life, and in this case, reinventing this property.”

There is much, much more to come on Reich Brothers and their plans when the deal closes, and beyond. For now, we move ahead with the TID.

The Business Journal also wrote about the TIF on Sunday.

So, what is a TID? Simply, it’s an economic development tool that communities can use to fund public infrastructure and other costs associated with redevelopment of often challenging parcels. “I” is the key letter. The “increment” is the difference between the assessed value on a particular parcel today vs. what it would be following a TID-supported project. Cities can borrow against that increment to spur those redevelopments — projects that wouldn’t happen but for that investment. And property taxes do not increase because a district is established.

Here is a more detailed look at TIDs from the Wisconsin Department of Revenue.

We’ve used TIDs effectively over the years, and they’ve been important tools for us as we’ve redeveloped some incredibly challenging parcels.

We have four in all, and they have helped drive everything from redevelopment of Grant Park Plaza and Walmart to apartment and condominium projects to assisting Bucyrus International in their expansion.

From the TID 5 project plan …

Tax Incremental District (“TID”) No. 5 (“District”) is a proposed 59.06‐acre blight TID that will be created to pay the costs of public infrastructure, land acquisition, brownfield remediation, development incentives, and other expenses needed to facilitate reinvestment in existing properties and encourage new construction. The District is delineated to encompass two key economic drivers in the city of South Milwaukee: 1) the 28.19‐acre former Bucyrus campus, and 2) portions of Downtown South Milwaukee along Milwaukee Avenue and the Chicago Avenue Corridor. In creating this District, the City of South Milwaukee identified a specific set of goals for properties within the District:

• Proactively attract and facilitate reinvestment in manufacturing facilities, specifically the former Bucyrus campus, to mitigate and avoid the negative effects of potential vacancies that may result in the deterioration and obsolescence of the site’s facilities and infrastructure;
• Encourage investment in and occupancy of underutilized and vacant properties, including parking lots and gas stations; and,
• Support environmental clean‐up and brownfield remediation activities.

Consistent with the City of South Milwaukee Comprehensive + Downtown Plan Update 2035, the District is delineated to capture the economic potential of Downtown South Milwaukee as an Opportunity Area. South Milwaukee Opportunity Areas are defined as specific sites and areas within the city limits that represent strategic and catalytic reinvestment and re/development opportunities. These sites and areas hold the potential to increase the value – environmental, social, and economic – of the surrounding properties in which they are located. Consistent with Wis. Stats. § 66.1105, the economic impact of the District will support investments both within the District’s boundaries and within a one‐half mile radius of the District’s boundaries. Objectives for investments made within a one‐half mile radius of the District include:

• Support ongoing revitalization efforts in Downtown South Milwaukee, including the funding of the Downtown Revitalization Grant Program and the creation of a revolving loan fund (RLF) for small businesses and redevelopment projects; and,
• Support reinvestment in the single‐family neighborhoods surrounding the District through the creation and administration of a residential grant program or revolving loan fund.

As for projects to tackle in TID 5, we spell out these opportunities in our plan …

• Project Area No. 1 – 1022 and 1100 Milwaukee Avenue. In this Project Area, the TID may support investments for reuse or tenancy of buildings and use of the 28‐acre property through utility separation, site access such as interior roads, or other needs as determined through lease negotiations between owner and new tenants. Potential
  project costs (expenses) to be identified; increment developed.
• Project Area No. 2 – 1000 Block of Milwaukee Avenue (north side). Investments in this Project Area could include acquisition of 1010 and 1012 Milwaukee Avenue for rehabilitation or redevelopment; financial incentives for the revitalization and reuse of 1016 Milwaukee Avenue; and, possible support of improvements to Heritage Park at 1000 Milwaukee Avenue.
• Project Area No. 3 – 1130 Milwaukee Avenue, 2001 12th Avenue, 1919 12th Avenue, and 1200‐1214 Milwaukee Avenue. This Project Area could include the division of land or incentives to make reuse of 1919 12th Avenue viable for commercial use; and, possible acquisition of 1130 and 2001 12th Avenue. The TID may incentivize development on the City‐owned former water tower site at 1214 Milwaukee
  Avenue, and may also support rehabilitation or redevelopment of the currently‐unoccupied structure at 1208 and 1210 Milwaukee Avenue.
• Project Area No. 4 – 2300 and 2318 10th Avenue. In this Project Area, the TID may provide financial incentives for redevelopment of 2318 10th Avenue and resources for repurposing or site improvements of 2300 10th Avenue.
• Project Area No. 5 – 1523‐1601 N. Chicago Avenue, 1701‐1715 10th Avenue. The TID may support site redevelopment or site improvement costs to support future  occupancy at 1701‐1715 10th Avenue, and contribute to the rehabilitation or redevelopment of 1523‐1601 N. Chicago Avenue.

That work, and other projects, could be partially funded by making TID 2 — our successful TID that includes the Walmart development and others on the north end of town — a “donor TID” for TID 5. Doing this could provide funds for investment in the new district as early as 2019, helping us act with the urgency we need (and developers may need) to make improvements in our downtown.

The hope: The TID is created by August, and we are using it as the latest vehicle to spur redevelopment in our city, beginning with the former Bucyrus campus.

We began this process late last year, and there are some key dates coming up as we consider moving forward.

A public hearing is scheduled before the Plan Commission on Monday, June 25, starting at 6:30 p.m., with full council consideration likely at a meeting tentatively set for July 10. The Joint Review Board — which includes representatives from all of the taxing districts impacted by TIDs — will then take up the matter later that month.

Please have your voice heard as we look to partner on projects across our city center, backed by TID 5. And stay tuned for much more information on the potential new owner of our city’s most prominent property.

This is just the start. Bring it on!