There would be no shortage of real estate investors in Menomonee Falls if everyone could work a deal like village leaders did Monday.
The Village Board voted to purchase just over 33 acres of commercial real estate in the Woodland Prime office park at a deep discount. The land purchase is part of the village’s overall strategy for development within that office park, which is also a taxing district created last fall.
It’s created some buzz once again in the Woodland Prime office park, which would likely be the location of a new Kohl’s headquarters – should they choose to stay in Falls.
The village will pay $24,526 per acre, or $821,621. According to Waukesha County tax data that land is worth $158,920 per acre. When Village Manager Mark Fitzgerald inks the deal, the village will have obtained the land for roughly 1/6 of its value.
“We’ve been able to negotiate a very steep discount for these parcels,” Fitzgerald said. “By controlling the ownership - at such time in the future that there’s a development potential - we can negotiate directly with future developers rather than leave it in the hands of someone else.”
According to Tom Daykin of JSOnline, an unnamed source said the two land purchases are related to a potential Kohl’s development, but would not elaborate. However, Fitzgerald said there are no immediate development interests for the two parcels.
HRH Acquisitions of Brookfield previously owned the land, which is a limited liability corporation affiliated with Richard Strong and Strong Financial Corporation. Strong’s mutual fund company unraveled in months after he and the firm came under scrutiny regarding an improper trading investigation in 2004.
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However, Village President Randy Newman said Strong had a vision for the Woodland Prime office park, and wanted to see it come to fruition. Newman credited Strong for the discount obtained by the village.
“This is a credit to Dick Strong to fulfill his vision to get that finished. I think part of the reason this was deeply discounted was to finish that vision. I give him credit for being a good corporate citizen even though he is no longer in the village.” Randy Newman.
Fitzgerald said the village is now well positioned to move forward quickly if a developer expresses interest in the near future.
“We talk to potential business developers daily. Now we are front and center in those discussions,” Fitzgerald said. “That discount wouldn’t be forthcoming to anyone else other than the village. These negotiations have been going on for quite some time. We will close quickly and work to get these parcels developed as quickly as possible.”
The entire Woodland Prime office park falls within a taxing district created by the village in August to spur commercial growth, and potentially lure Kohl’s. Eaton Corporation has already claimed its space in Woodland Prime and is constructing a 102,000-square-foot research laboratory along Flint Drive.
The project, estimated at $15 million, received a total of $3 million in public financing. That included a $500,000 grant from the village and $2.5 million in tax payments over the next 10 years.
The village also owns 70 acres of land north of the 33 acres they will soon purchase. That area seems to be the primary landing point for Kohl's if it stays in Menomonee Falls.
The Woodland Prime taxing district was approved to accommodate two scenarios — either the construction of Kohl’s headquarters, or other commercial development. Kohl’s headquarters would occupy 45 acres on the northwest portion of the taxing district. If Kohl’s doesn’t locate within the district, the parcel would be split into two roughly 20-acre sites for future development.
Under the Kohl’s scenario, the village would front $23 million for infrastructure improvements on the site, and provide $18 million in grants and incentives for the project. In the second scenario, the village would ante $14 million for infrastructure improvements, and provide $7.5 million in developer grants and incentives.