Update: Check out Business Journal and Journal Sentinel coverage of the issue.
Nearly a year after it was first proposed, and several months after it appeared all but dead, the Walmart deal is moving ahead – with the city pledging to spend up to $1.8 million on site cleanup costs to help make it happen.
The City Council, after a lengthy closed session, voted 5-2 in open session Tuesday night to approve terms of a development agreement with Gatlin Development and Walmart.
It passed 5-2. Alderman Craig Maass and I voted no. Alderman Frank Van Dusen III abstained.
Why did I vote no? I felt it was the right thing to do – the only decision I could make if I truly believe in ensuring that citizens’ voices are heard on key issues, if and when possible.
I’ll explain more about my rationale later. First, some background.
The plan itself has not changed much since it was first proposed in late 2010, when the council approved selling its portion of the property necessary for the project to Gatlin Development.
It calls for a 115,215 -square-foot retail store (and outlot) on approximately 10 acres of land in the 200 block of North Chicago Avenue — 3.6 acres of city-owned land on the east and another 5.8 acres west of 11th Avenue. About one third of the building would be devoted to full-service grocery, with the remainder planned for general merchandise and a pharmacy. The project will create between 150 to 200 jobs, with about 60 percent of them full-time.
This, of couse, is year-old information. What has become clearer in recent days, however, is the amount of money that Gatlin and Walmart are seeking to make the project a reality. Early on, Walmart was not seeking any city funds to make this happen. Now, that figure stands at up to $1.8 million.
Why the change? It has to do to with site cleanup costs, both of the city property abutting Chicago Avenue and the privately owned property to the west. Environmental testing has found both sites, especially the private property, to be in need of significant cleanup in order to make it suitable for building.
Consultants have put this cost at about $3.6 million.
- Walmart has committed to contribute $1.8 million of that.
- The city would spend $800,000 to clean up the portion of the property it owns between 11th and Chicago Avenues – money we would admittedly have to spend if Walmart wanted to build on the site or not.
- The city would also contribute up to another $1 million for cleanup of the remaining parcel. (I say “up to” because included in that figure is $500,000 that the city will pay only if necessary, as the last money into the deal.)
Walmart would fund other site upgrades, including installation of a traffic signal on Chicago Avenue, stormwater management and other road improvements.
The city cleanup costs would come through Tax Incremental Financing District #2, where the Walmart would be built.
As you recall, in a TIF district the city borrows money to fund infrastructure costs to improve an otherwise undesirable property. The loan is paid for by the property tax “increment” of the new development – the difference between the property taxes collected under the old use (in this case, vacant land) and new use (here, a perhaps $12 million Walmart, among other projects in TIF #2).
In fact, it was estimated Tuesday night that the Walmart development could “pay back” the city’s $1 million in “extra” cleanup investment by 2016, with the property going back on the tax roles then.
TIF financing is widely used across the state to help spur development – and it’s being used in bringing Walmarts to other communities (including West Milwaukee). I generally support it. But I know it can be controversial, as it uses city tax dollars to help fund private projects.
That gets to why I voted no.
The addition of the city-funded cleanup costs to the project has changed the debate, in my mind. The “Should Walmart build in South Milwaukee?” question of the past year is now “Should the city contribute up to $1.8 million to help Walmart build in South Milwaukee?” These are two very different questions.
I think there was strong support locally for the former. As to the latter, I’m not so sure. That’s why I felt strongly that the community should be heard on it before the council gave its blessing to the development agreement.
I made a motion stating as much: to hold a public information meeting on the project next week with the idea that the council give its approval or denial at its next meeting on Sept. 20. This seemed to be a fair compromise, one that allows Walmart to continue on its accelerated schedule — one driven by an expiring purchase option on the private land west of the city parcel — while at the same time allowing for at least one round of public comment before council action on the new information contained in the proposed development agreement.
That motion failed, 5-3 (with me, Maass and Van Dusen III voting yes).
Then came the motion to approve the development agreement, and I stand behind my vote on it 100 percent.
Now, I may end up voting in favor of this project in the end – but only after residents share their thoughts at the various public hearings coming up in the next couple of months. Your voices first need to be heard on this. I owe my constituents that much.
(Of course, that starts with this blog. Post your comments below, and vote in the poll question on the right side of this page. Call or email me anytime. And I will keep you posted on the public hearing dates.)
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