Tower Automotive/A.O. Smith plan (Milwaukee, Townsend: real estate, 2009, lease)

[KC3700]

City's plan to develop Tower site poses risks, report says - JSOnline

I'm a very big believer in Milwaukee's North Side, I live here, like it here and I'm a pretty big fan of it. But honestly, this idea couldn't possibly be stupider.

First off, the idea that you could clean up the pollution on that site for such a low price is absurd on it's face. Everyone knows that that place is one of, if not the most contaminated pieces of land in Milwaukee, if not the State.

Another ridiculous idea is to zone Capitol Drive between 31st & 35th for retail. East of 31st is a retail corridor that is barely hangin on. Why would anyone go to the expense of building something new between 31st and 35th when a business could just lease out some of the space between 31st and Atkinson?

And where are the prospective developers? There are none. It's not like what the city did with the Pabst Brewery where it waited until it had a developer. The city is just going on a hope and a prayer here.

Even though the city has no businesses lined up, this hasn't stopped them from saying that this will create 800-900 new jobs. How so? They'll probably need construction workers at first, but once this project is done, what kind of jobs would move in?

This also brings up another question: what businessman would move his business to 27th & Hopkins? There is a deep seated racism in most of our businesses here, which is why businesses moved from the north side in the first place.

This project has "Park East II" written all over it in my humble opinion.

[Milwaukee City]

This project has "Park East II" written all over it in my humble opinion.

Good Call! however instead of just waiting for business to come into the site we should try lure a business into that spot or businesses. Look at the bright side at least you won't have an abandoned factory sitting there.

This also brings up another question: what businessman would move his business to 27th & Hopkins?

This will be the biggest challenge for the Tower site, crime. Another thing the tower site is kind of set off from the rest of the world. It's by capitol drive but that's the only major street that borders the site and it's a very small piece, the location is going to be hard to sell.

[Ron Burgundy]

I thought 27th St changes dramatically once you go north of Atkinson. I mean, it was like night-and-day when I was driving up it the other day. Doesn't mean crime doesn't occur on the north side of the tracks, but just sayin'....

Outside of the financial ambiguity, I don't see the harm in the city doing the environmental clean-up first. No one's going to locate there without it, and just letting it fester is just not a feasible option.

[Allan Trafton]

Midtown Center 15 blocks west has been a hugh success, therefore the demand for new retail will be much reduced. Also, the city can't afford the $35 million there going to drop on this. Maybe during boom times it would be worth the risk, but now with budget difficulties it is to much to ask. We don't need other services reduced due to this project which may not succeed.

[Jesse276]

Originally Posted by Allan Trafton

Midtown Center 15 blocks west has been a hugh success, therefore the demand for new retail will be much reduced. Also, the city can't afford the $35 million there going to drop on this. Maybe during boom times it would be worth the risk, but now with budget difficulties it is to much to ask. We don't need other services reduced due to this project which may not succeed.

They're doing this as a TIF district, which means they aren't taking any money from current budgets. They're borrowing to cover the costs and hope to recoup that through increased tax collections and greater development in the area.

The cost of doing nothing is much higher than a failure here.

[Allan Trafton]

Originally Posted by Jesse276

They're doing this as a TIF district, which means they aren't taking any money from current budgets. They're borrowing to cover the costs and hope to recoup that through increased tax collections and greater development in the area.

The cost of doing nothing is much higher than a failure here.

I understand this, but it is a liability to the city. If the TIF district fails the city is stuck paying the bill. 35 million is a lot of money to put on the line for such an iffy deal.

[adam76]

A few years ago a big issue in the news was cruising along Capitol Drive. Is cruising still a major problem in this area?

Also something I don't get from the article. It states it is a $34.6 million plan. Later on it says the plan calls for spending $25.6 million in city funds, of which $15.6 million is via TIF district and the other $9 million is through grants and credits. Where is the remaining $9 million ($34.6 - $25.6) coming from? Is that a direct one time hit out of the city budget not covered by a TIF? The way the article is written the TIF and grants aren't covering the entire cost.

One thing that bothers me about the TIF proposal is the article says the property taxes would be generated by new development and "improvements in the surrounding neighborhood, and by selling parcels within a business park to be created at the Tower site". This means the plan is making some type of projection of how much the value of surrounding real estate will rise and an estimation of how much they think they can sell the parcels for. In case no one has noticed, commercial real estate isn't a booming market these days. I'm not saying this is the particular case here, but in general these types of plans tend to fall victim to rosy projections.

[Jesse276]

Council approves purchase of Tower Automotive site - BizTimes

"City officials want to clean up the property and prepare it for eventual redevelopment. They hope to attract 700 to 1,000 jobs to the site. The project is being paid for through a $15.6 million tax incremental financing district, $10 million in city funds, $2.1 million in credits from We Energies and about $6.7 million in grants.

About $18.2 million will be spent on demolition of existing buildings and environmental remediation, according to a city feasibility study. Another $4.4 million will be spent on improvements to infrastructure, such as new streets, sewer and water lines and other utilities."

This is already a liability to the city, doing nothing is only burying your head in the sand. Considering this area will take some time to get ready for businesses, it's ideal that the work is done now. The cleanup will be cheaper and the land will be ready when the market turns around.

[KC3700]

Originally Posted by Milwaukee City

Good Call! however instead of just waiting for business to come into the site we should try lure a business into that spot or businesses.

EXACTLY.

Originally Posted by Milwaukee City

Look at the bright side at least you won't have an abandoned factory sitting there.

It might turn out to be worse though. For instance, if you have just a big parcel of empty land with streets running through it, it will probably turn into one big illegal dump site.

Originally Posted by Milwaukee City

This will be the biggest challenge for the Tower site, crime. Another thing the tower site is kind of set off from the rest of the world. It's by capitol drive but that's the only major street that borders the site and it's a very small piece, the location is going to be hard to sell.

35th is a pretty busy street, but you are right. This area was good for Tower because of the tracks, but in terms of turning this into a business park, this location is a bad idea for a business to locate in.

Another thing I just noticed: it's not near an expressway. That could also make this area a hard sell.

And yes, crime will probably be a big issue too. Right now that complex is fenced off from the surrounding area. Once it gets opened up, you know what comes next.

Originally Posted by Ron Burgundy

I thought 27th St changes dramatically once you go north of Atkinson. I mean, it was like night-and-day when I was driving up it the other day. Doesn't mean crime doesn't occur on the north side of the tracks, but just sayin'....

It does, but the Tower complex is south of Atkinson.

Also, that change is in physical appearance only. 27th looks better north of Atkinson, but the neighborhood is still rough. 10 years ago it was nice, but that area is turning.

Originally Posted by Ron Burgundy

Outside of the financial ambiguity, I don't see the harm in the city doing the environmental clean-up first. No one's going to locate there without it, and just letting it fester is just not a feasible option.

I think we should wait until the city is not going broke to do this. Also, it's not like there hasn't been interest from private firms in this parcel of land.

Originally Posted by Allan Trafton

I understand this, but it is a liability to the city. If the TIF district fails the city is stuck paying the bill. 35 million is a lot of money to put on the line for such an iffy deal.

Exactly.

Originally Posted by adam76

A few years ago a big issue in the news was cruising along Capitol Drive. Is cruising still a major problem in this area?

Not at the same scale as it was, Adam.

It wasn't even cruising, to tell you the truth. It was like a mobile street party. A bunch of cars would stop in the intersection of 27th & Capitol, bump music, people would start dancing, drinking, etc. Some of these parties had women that would get on the hoods of cars wearing high-heels, and that's it - to dance.

These mobile street parties caused a pretty big public safety concern not just because of the obvious crowd control problems, but because they were blocking the entrance of the firehouse on that corner.

A kid got shot at one of these. After that the cops started cracking down on these people and the crusing is back to a more-or-less normal (obnoxious) state.

Originally Posted by adam76

Also something I don't get from the article. It states it is a $34.6 million plan. Later on it says the plan calls for spending $25.6 million in city funds, of which $15.6 million is via TIF district and the other $9 million is through grants and credits. Where is the remaining $9 million ($34.6 - $25.6) coming from? Is that a direct one time hit out of the city budget not covered by a TIF? The way the article is written the TIF and grants aren't covering the entire cost.

One thing that bothers me about the TIF proposal is the article says the property taxes would be generated by new development and "improvements in the surrounding neighborhood, and by selling parcels within a business park to be created at the Tower site". This means the plan is making some type of projection of how much the value of surrounding real estate will rise and an estimation of how much they think they can sell the parcels for. In case no one has noticed, commercial real estate isn't a booming market these days. I'm not saying this is the particular case here, but in general these types of plans tend to fall victim to rosy projections.

You are right on both counts.

Grants and loans aren't going to cover the full cost of this thing. And that's assuming that they will be able to clean up the environment over there for such a low price (not happening).

Also: no disrespect to anyone who lives in that area, but that neighborhood isn't going to improve. The only part of that area that could would be the parts 1-2 blocks south of Capitol. Once you get north of Vienna there is a marked improvement in the quality of the housing units there. But in that area around Townsend and Keefe, with all those rundown wood-frame houses? Forget it.

Originally Posted by Jesse276

Council approves purchase of Tower Automotive site - BizTimes

"City officials want to clean up the property and prepare it for eventual redevelopment. They hope to attract 700 to 1,000 jobs to the site. The project is being paid for through a $15.6 million tax incremental financing district, $10 million in city funds, $2.1 million in credits from We Energies and about $6.7 million in grants.

About $18.2 million will be spent on demolition of existing buildings and environmental remediation, according to a city feasibility study. Another $4.4 million will be spent on improvements to infrastructure, such as new streets, sewer and water lines and other utilities."

This is already a liability to the city, doing nothing is only burying your head in the sand. Considering this area will take some time to get ready for businesses, it's ideal that the work is done now. The cleanup will be cheaper and the land will be ready when the market turns around.

But that's still assuming that businesses will want to locate there once the market turns around. I am very familiar with the area and I don't think any businesses will want to move there.

The smart thing to do would be for the city to actively get up and seek out businesses for this area.

Also, this site is not a liability on the city, because the city does not yet own it. But since the Common Council made the stupid move to buy this land it will soon be.

[Ron Burgundy]

Originally Posted by KC3700

It does, but the Tower complex is south of Atkinson.

My bad, I meant Hopkins, not Atkinson... that's what I get for going off of memory.