Wauwatosa deal with Zilber guarantees city repayment
Tax income won't fall below city's obligation
The city has reached agreement with Zilber Ltd. designed to guarantee repayment to the city for its $2 million investment in an underground parking structure for ABB at Innovation Campus.
Zilber Ltd. is building and will own the ABB facility.
Under the terms of the agreement, Zilber agrees that, if it challenges the assessed valuation of the property in an effort to reduce its tax liability, it will not seek to reduce the combined real and personal property taxes annually assessed against the building to an amount below $246,000.
This amount is less than recent estimates of the tax income from the property. In a February briefing to the Budget and Finance Committee, Finance Director John Ruggini estimated tax increment revenue from the project at $308,153.
"What we're trying to do is guarantee that we have enough for the debt service," Ruggini said. "So the ($246,000) is significantly less than what we think is probably the (tax income) of the building, but we couldn't get the developer to agree - no developer is going to agree - to a minimum value of what the building's going to be valued at, because they don't know what's going to happen to the market."
Market fluctuations may change the value of the building, and thus the property tax revenue received by the city, he said.
"The market may tank, and the value of that building may decrease … but from our perspective, our minimum is, we've got to cover the debt service. And so, we calculated the minimum that we would need would be 125 percent of the debt service," Ruggini said.
The city has a similar agreement with GE Healthcare, for which it also financed a parking structure.
"It's essentially a guarantee that the district will recover all of the incentives," said City Administrator James Archambo. "There's no risk to the district that it will not have that obligation."
Even if the assessment on the property drops to such an extent that $246,000 would exceed the tax amount, "they'd still have to pay it," Archambo said.
The agreement applies to any future owner of the property, should it change hands over the 10-year term of the ABB lease, according to the document.
Other features of the agreement include:
Two five-year options of ABB at the conclusion of the ten-year lease.
Development of a surface parking lot "featuring storm water retention capabilities sufficient to maintain compliance with the approved campus-wide stormwater plan, enhanced by the use of pervious surfaces and underground storage."
As many as 45 stalls of the new surface-level parking lot will be made available for use of a future building ("Building C" on city diagrams) if and/or when it is constructed, together with a planned parking structure, where the 45 displaced ABB parking stalls will be relocated.
Zilber will donate to the city one electric vehicle charging station, which the city will install at its expense.
Your link to the biggest stories in the suburbs delivered Thursday mornings.
Enter your e-mail address above and click "Sign Up Now!" to begin receiving your e-mail newsletter Get the Newsletter!
- Ask NOW: Is Currie Dog Park expanding?
- Business Notes: May 16
- Rios appointed to take open Tosa School Board seat
- Wauwatosa preservation panel approves plan for Eschweiler buildings
- Village of Wauwatosa starts work on new signage system
- ANEW offers seniors in need of care options
- Developer drops controversial Village project in Wauwatosa
- Baseball diamond project gets Wauwatosa panel's approval
- News & Notes: May 16
- Local bands compete in Launchpad event