Foxtown development gets $5 million in TIF financing from Mequon
MEQUON - The Mequon Common Council agreed on Tuesday, Sept. 11, to provide $4.95 million in public assistance to the developers of the $51 million Foxtown project, which would bring restaurants, retail, 96 apartments and 23 single-family homes to the Mequon Town Center District.
Foxtown will be built on 17 acres south of Mequon Road between Buntrock Avenue and the railroad tracks. City officials have said the land is "blighted" and contains contaminated soils and dilapidated conditions.
The land currently generates $16,500 in annual tax revenue. Once the $51 million Foxtown is built, the land is expected to generate $800,000 in annual tax revenue.
The $4.95 million in public funds will be phased over a period of five years, through 2023. No incentive is provided unless the project is constructed and value is created.
The funds will reimburse the developer for costs related to environmental remediation, demolition costs and removal of debris.
Another public improvement to come out of the project is a $1.2 million reconstruction of Industrial Drive, which will see added streetscaping features.
Half of the public financing, about $2.5 million, will not be paid if the developers fail to generate $30 million in value by 2023, or if the beer garden along the railroad tracks is not built by 2023.
Alderman John Wirth said he does not normally support public assistance for private development, but said this type of TIF payment is akin to a tax rebate.
"If it doesn't succeed, it doesn't cost us anything," Wirth said.
The council voted 5-3 to provide the TIF financing, with Aldermen Mark Gierl, Glenn Bushee and Brian Schneider voting against.
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To provide the Foxtown incentive, aldermen had to amend the Mequon Town Center TIF District last month. The city had already spent the original $7 million outlined in the original TIF project plan from 2008. With the amendment made last month, the TIF can now allow for $12 million in expenditures, or $15 million when including interest.
The TIF is projected to close in 2028, when the TIF is legally required to expire.
Too many apartments?
Construction of the Foxtown project will come on the heels of the Spur 16 project under construction directly across the street on the north side of Mequon Road.
Cindy Shaffer, the developer of the Spur 16 project, said she supports the restaurant and brewery components of the Foxtown project, but she also reiterated a previous plea to Mequon officials to delay construction on Foxtown's apartment buildings.
Spur 16 will feature 150 apartments, 100 of which will be finished in September 2019. She said she needs a year for those apartment buildings to fill up without added competition from the Foxtown developers.
"It would be great if you could give us a year to get up and running and stabilize before you add another 100 apartments," Shaffer said.
The Foxtown developers originally wanted to open their apartments in September 2019, but agreed to push their timeline back to March 2020 to accommodate Spur 16. Shaffer, however, said she needed "a solid year."
Alderman Rob Strzelczyk suggested the council further push back the timeline to July 2020. His motion unanimously failed after Bob Bach, the developer of the Foxtown apartments, said he would lose his financing.
"Our whole pro forma is that we start in spring typically and are stabilized in a year," Bach said.
Peter Moegenburg, a real estate consultant hired by Foxtown developers to research market conditions, said a typical absorption rate for new apartments is 10 to 12 units per month. He said there was enough demand for both the Foxtown and Spur 16 apartments.
"There shouldn't be much of an overhang of available units at Spur 16 by the time those first units are delivered in 2020 at Foxtown," he said.
Gregg Thompson, the project manager of Foxtown, said Fox Tale Brewing Company should open in spring in a renovated historic brewery building on Mequon Road. The Argentos restaurant building will open in June, the Hamburg Hall beer garden along the railroad tracks will open in fall 2019 and the other retail and apartment buildings will open in 2020, Thompson said.
