University of Wisconsin-Milwaukee's plan to develop a science campus and a tech-oriented business park in Wauwatosa has won approval for up to $12 million in city financing.
The Common Council, on a 10-3 vote Tuesday night, approved the financing plan for the project, known as Innovation Park. The funding plan last week was recommended by the Plan Commission, and the council's Budget and Finance Committee.
The city would pay for roads, sewers and other public improvements at the project site, east of Highway 45 and north of W. Watertown Plank Road. Those funds would be repaid through property taxes generated by developments at Innovation Park. University-owned buildings will be tax-exempt. But the land itself, along with privately owned buildings, would generate property taxes.
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. Based on development prospects, city officials expect that payback period to be shorter, perhaps 20 years or less.
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. That phased approach would require future council votes.
"We're basically saying (to UWM), 'We're giving you a shot,'" said Ald. Bobby Pantuso, who supported the financing plan.
Even the phased approach carries a risk for taxpayers if there's not enough development to generate the property tax revenue needed to pay back the city's debt, said Ald. Michael Walsh, who opposed the plan.
Walsh also said the city financing plan isn't necessary, and cited interest in the project from private developers.
But Ald. Dennis McBride said even with the involvement of private investors, the city's funds are still needed to build the roads, sewers and other improvements to make the land developable.
McBride said Innovation Park will generate property tax revenue for the city once the debt is paid off, while also creating jobs. He also said the development will help preserve a butterfly habitat, and restore the historic Eschweiler buildings into housing.
With the financing plan approval, UWM's Real Estate Foundation can now make a stronger case to prospective donors to help fund the $13.55 million purchase of the 89-acre tract from Milwaukee County, university officials say.
The university has until Dec. 15 to complete its land purchase, and must raise $5 million for a down payment by then.
Innovation Park's first development would be a 25,000-square-foot building that would house both university and business research activities. UWM recently was awarded a $5.4 million federal grant to develop the building, with construction work to begin next spring.
University officials said that building, known as a business accelerator, and other developments at Innovation Park will help UWM strike new partnerships with the nearby Medical College of Wisconsin, leading to more research grants and business spin-offs.