The Sussex Corporate Center West took another step forward Thursday night as members of the Community Development Authority gave the green light to continue with the next step.
And, for the first time, Sussex has released a detailed preliminary cost estimate for the project. Dave Anderson, a financial advisor from PFM Group, said his estimates are as accurate as the village will get until the engineer they hired with the $60,000 CDA grant says differently.
The initial investment Sussex would make is a little more than $4.6 million, with a majority of that money going toward the farmland acquisition in 2012, costing nearly $2.4 million. The remaining costs come from the improvements to the land in 2013 like adding sewer, water and constructing roads.
“These numbers could change between today and the time you do it, but this is what it would cost today,” Anderson said. “If these numbers are right, you’d pretty much be making a $4.6 million investment right out of the chute… The additional commitment of $1.8 million in the second phase – you’re only going to do that if the first phase is successful.”
The first phase applies to the land directly behind Kohl’s and Shopko, while the second phase would extend the park further west. That means the village would spend an additional $1.8 million constructing more roads, among many other things, to complete the entire business park sometime around 2019.
In total, Sussex estimates they will spend roughly $6.5 million, paid for by taxes generated by the new TIF district. Under TIF district financing, the assessed value of the land is frozen for taxing purposes. As the value increases because of new development, any additional tax dollars generated from that increase go toward paying off the initial investment.
“I don’t think there would be a corporate center, at least at this time, without the village being the owner of the property."
Many village officials agree that making this investment is all about diversifying Sussex’s tax base, so if a major player like Quad/Graphics were to leave, the village would have plenty of businesses to fall back on.
However, some Sussex residents have expressed confusion and anger regarding the land acquisition, asking if this was such a good investment, why wouldn’t a private developer already be doing it? Even one member of the CDA expressed hesitation after asking the same question.
“We explored many different partnerships before we got to this point, and this is the one that was viable,” Smith replied. “I don’t think there would be a corporate center, at least at this time, without the village being the owner of the property."
Representatives with MLG, the developer, said considering the current economy, it’s virtually impossible for developers to go to a bank and borrow money for land. In addition, Smith said that if the park was a complete bust, where they couldn’t sell the land for even a dollar, they could pay off the debt by simply not repairing the roads in Sussex for two years.
Overall, Sussex officials seem very confident with their decision to move forward. They say the land is at a premium price because Johnson Bank owns it. In addition, Smith says the village paid off the Sussex Corporate Park TIF district in 16 years, nearly half of the projected timeline. Sussex Corporate Center West’s payback timeline is just 20 years, and Smith says that’s being conservative.
What Comes Next
On July 25 at 5:30 p.m., residents will have the opportunity to voice their comments and concerns to the CDA about the possible TIF district at an official public hearing.
Immediately after that, the CDA will decide whether to move forward with the corporate park. If they do, it would move to the village board to review at the August 14 meeting, followed by a meeting with representatives from organizations impacted by the TIF, like Waukesha County Technical College, the Hamilton School District and Waukesha County.
Editor's Note: The date of the public hearing was changed from July 19 to July 25 after the village experienced scheduling issues. Please mark your calendars accordingly.