Innovation Park project financing plan OK'd by Tosa council committee
Journal Sentinel business reporter Tom Daykin talks about commercial real estate and development.
A plan to provide up to $12 million in city funds for University of Wisconsin-Milwaukee's Innovation Park project was recommended for approval Tuesday night by a Wauwatosa Common Council committee.
The Budget and Finance Committee voted 5-2 to recommend the funding plan to the full council. The 16-member council will take up the issue on Sept. 21. The funding plan was recommended by the Plan Commission Monday night on a 5-1 vote, and is also supported by Mayor Jill Didier.
The committe's vote came hours after I broke the news that Innovation Park, which would create a science research campus and technology-based business park, had received a $5.4 million federal grant. That's a major funding boost for the project.
The grant, from the U.S. Department of Commerce's Economic Development Administration, will be used in part to fund a business accelerator building, according to a department statement. The grant was awarded to the UWM Real Estate Foundation and the City of Wauwatosa.
The building would house both UWM research functions and private businesses. It would be the first building at Innovation Park, which is planned for the Milwaukee County Grounds, east of Highway 45 and north of W. Watertown Plank Road. Construction is to begin in 2011.
Also, part of the federal grant would be used to help pay for some of the public improvements, such as roads and sewers, that UWM wants the city to fund at Innovation Park. Nancy Welch, Wauwatosa's community development director, said she didn't yet know how much of the grant would be used to help fund those costs.
Under the plan approved Tuesday night, the city's funds would be repaid through property taxes generated by developments at Innovation Park through a tax incremental financing district. While the UWM buildings would be tax-exempt, the business accelerator and other buildings for private companies would pay property taxes.
Also, the Innovation Park site will become taxable once a university affiliate buys the 89-acre property later this year for $13.55 million. The land is now owned by Milwaukee County and pays no property taxes.
UWM attorney Bruce Block said the university has "qualified commitments" from private donors to make the $5 million down payment needed to buy the land. But those prospective donors, whom Block declined to name, are waiting to see if the council approves the city financing plan, he said.
A report by a city consultant said Innovation Park would likely generate enough property tax revenue to pay off the city's debt within the 27-year payback period allowed under state law.
The land value, the value of the accelerator building, and the value of redeveloping the site's historic Eschweiler buildings into housing--which has already attracted interest from developers--would together generate 75% of the value needed to make that 27-year payback, said City Administrator James Archambo. He said additional developments at Innovation Park would likely reduce the payback period to an estimated 20 years.
No city money would be spent if UWM doesn't go forward with the development, and the city funds would be spent in phases as development occurs, Welch said.
The phased approach to spending money, which would require additional council votes, led committee members such as Ald. Peter Donegan to support the financing plan. But Donegan also said there's still risk involved if enough development doesn't occur to pay off the city's debt.
Aldermen Michael Walsh and Tim Hanson both voted against the financing plan, saying the risk was too great.
But Ald. Dennis McBride said Innovation Park would help restore the Eschweiler buildings, preserve part of the site as a wildlife habitat, and create developments that would generate property tax revenue once the city's debt is paid back.
Along with the city financing plan, obtaining the federal grant is a "tremendous vote of confidence" in the project, said Tom Luljak, UWM vice chancellor for university relations.
In May, UWM officials disclosed that they applied for a $3.5 million federal grant to pay for the business accelerator building. There was no explanation in the Commerce Department statement about why UWM and Wauwatosa received nearly $2 million more than was requested.
The federal grant will help support economic development in southeastern Wisconsin by helping revitalize advanced manufacturing, said Commerce Secretary Gary Locke, in the statement.
Michael Lovell, dean of UWM's College of Engineering and Applied Science, said in May that executives from several firms, including a biotechnology start-up, have approached university officials about being in the building.
Lovell was recently named interim chancellor to succeed outgoing Chancellor Carlos Santiago.
Lovell, Santiago and other UWM administrators and faculty say Innovation Park would help UWM forge partnerships with the nearby Medical College of Wisconsin and capture more federal research grants from the National Institutes of Health. Those grants, in turn, will help fund research that could create business spinoffs, say the development's supporters.
Other faculty members have argued that the track record of university-supported business parks is mixed, and that placing Innovation Park away from UWM's main campus will work against efforts to create more partnerships among different academic departments.
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Commercial Real Estate News
Marcus considers new tower that would include cinema
Marcus Corp. is considering preliminary conceptual plans for a large mixed-use development that would feature a downtown Marcus Theatres cinema, as well as housing, offices and restaurants.
The project, called Edison Place, would be developed on 2.25 acres overlooking the Milwaukee River, north of E. Knapp St.
Katie Falvey, Marcus Corp. vice president of real estate, declined to provide details about the plans, which could change.
Check the Milwaukee Assessor’s Office website, which includes tools to look up property assessments.
Find property assessments for other communities throughout the state at AssessorData.org.
The Milwaukee Department of City Development website includes information on the city Plan Commission and Redevelopment Authority.
The Commercial Association of Realtors Wisconsin offers information on commercial realtors and real estate.
The Milwaukee chapter of the Institute of Real Estate Management serves the needs of real estate management professionals
The Wisconsin chapter of the NAIOP Commercial Real Estate Development Association aims to serve developers and owners of commercial real estate.
The Land and Space blog was recognized by the Society of American Business Editors and Writers in the blog category for dailies with circulation between 200,000 to 500,000.
The judges said, "Daykin’s aggressive reporting and accessible, explanatory writing make him a must-read for his tight-knit and highly engaged audience."
