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Platteville Library Block developer agreement approved
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Nearly three years after the Platteville Common Council authorized a feasibility study for the Library Block, the Common Council approved the developer’s agreement for the Library Block project 6–1 Nov. 24.

The vote came after more than 90 minutes of public comment for and against the project. District 4 Ald. Ken Kilian voted No after he sought to table to vote until the council’s next meeting Tuesday “so that people can’t say you pushed it through in one night.”

Common Council President Eileen Nickels called it an “excellent project for the city of Platteville — this moves us forward in a way that we have not gone before and that I hope we will see more of. … This will work, and this is good for the community not just tomorrow, but for years to come. Yes, we don’t have a firm guarantee, but we have a pretty good idea of what will happen.”

“If we just crunch numbers there are lots of things we can’t do,” said at-large Ald. Tom Nall. “But there are a lot of possibilities for us to do here. There is more to life than crunching numbers.”

“If we are going to make this community move forward, it’s going to take public–private partnerships, it’s not going to be public money,” said District 3 Ald. Barb Daus. “If we don’t take care of the decay in the middle of our city … what do you got left?”

“We need to develop our downtown,” said District 1 Ald. Barb Stockhausen. “I’ve heard over and over again that businesses downtown need our support.”

At-large Ald. Mike Denn called it a “great project” except for the lack of guarantee that the library will be given to the city at the end of the seven- or eight-year lease. “It’s too bad” the updated details of the developer’s agreement “wasn’t made available in a public forum.”

At-large Ald. Amy Seeboth-Wilson called it “a complicated project when you’re doing a public–private partnership” that couldn’t be discussed publicly during the process. “I wish would have done more public input, but we had to respect the wishes of the developer,” she said.

“We have talked to the public when we could talk to the public,” said Nickels. “We have been in the spotlight I believe two years, minimum,” adding it would be “unusual if a project didn’t change.”

Aldermen had just gotten a copy of the final version of the developer’s agreement before the meeting, but attorney Steven Roy of Geier Homar & Roy LLP of Wonewoc said the final version only changed the Limited Liability Company that would get the New Market Tax Credits. 

“None of the dates have changed; none of the numbers have changed,” he said. The seven-year lease ensures that “anybody who could ultimately take our project” in case of a financial “disaster,” he added, “would have to recognize our lease, and would have to continue to lease to us.”

The lease of what is legally considered a commercial project, including the library, also means the developer will pay property taxes on the project, Roy said.

Developer Troy Hoekstra said he was taking $4.3 million in debt for the hotel, and adding the library “in seven years I’m going to have $5.2 million” in debt. “I’m going to be in debt $900,000 more if I do this from if I don’t do [the library]. Why would I do this? The only reason I’d do this is to donate this library and to have the charitable contribution to offset that loss. Otherwise it makes no sense to do this from an investor perspective.”

Hoekstra said the Southwest Wisconsin Community Action Program will be charged the same $1,290 per month for its renovated clinic. He said the clinic will “meet public policy goals, because we think it’s right to do.”

Supporters of the project — 27 people registered in favor — included Library Board member Marilyn Gottschalk, who said “we do desperately need” a new building.

Bill Kloster of the UW–Platteville Real Estate Foundation said the foundation decided against a “student housing component” as was proposed in an early version of the project “because we really wanted this project to succeed,” and student housing would have increased required parking.

“I think Platteville needs to move forward in this public service area,” he said, and build “a facility that has all the technology and capability for one student from Platteville to become really interested in something and become a success … something Platteville really needs to start moving forward and make it a place people really want to come to.”

“When the residential part left, that changed the dynamic,” said Nickels.

Main Street Program executive director Jack Luedtke said Main Street businesses are “all of course in favor of the project” because it will “bring vibrancy and a level of visitors to downtown businesses that we have not experienced in the past,” and “could be a catalyst for future development on the now-vacant Pioneer Ford site.”

Luedtke said McGregor Plaza, built 40 years ago, was “the last development of significance and proportion in the downtown area.”

Developer Jim Schneller echoed later speakers when he said “I’m not against the library,” but noted the differences between the project as presented in January and now, and what started as a $1-per-year lease with guaranteed transfer of the library to the city that became a $1.5 million lease with no guarantee that the city would have the library at the end of the lease.

“It’s much more costly than presented in January, and it doesn’t really matter what got us to that point,” he said. “You are not guaranteed of the goal. You are not guaranteed a library. … The simple fact is if you think you’re going to get a library, you may or may not.”

“Everyone in this community is in favor of a library,” said business owner James Rosemeyer. “The question is, is this the way we want to get it?”

“None of that is free, and please [know] that that ‘free’ came way back when this project was first started and talked about,” said Nickels, who said the removal of the residential component “changed the dynamic.”

Molly Zuehlke said the $4 million Schreiner Memorial Library in Lancaster is “much smaller” than the new library will be for less cost. “All of our development cannot go out by the highway,” Business 151, she added.

“If we continue to let [downtown] fall apart, no one’s going to want to come here, none of the professors that we’re losing now are going to want to move here. I don’t really understand why this win–win is being argued against when it’s only being argued against to line other people’s pockets, frankly. I want my kids to have this new library, and I don’t want to have to pay my tax dollars for it, so it seems like a really good deal.”

The question of whether the city would get the library at the end of the lease was answered in a statement by Farshad Maltes, who administers New Market Tax Credits for the Wisconsin Housing and Economic Development Authority. Maltes said NMTCs, which typically fund 20 to 25 percent of the costs of eligible projects, “try to encourage investment in rural communities and underserved communities.”

Maltes said the library and health clinic components of the project “made it a compelling project” from WHEDA’s viewpoint.

Maltes said donating a library requires that no quid pro quo — something in return for donating the library — exist in an agreement. “They have to give the library without any conditions related to it” or there would be no tax benefit, he said.

“The developer is taking a big risk that I’m not going to forgive the note” at the end of the lease, which would leave the developer owing WHEDA $4.5 million, he added.

One issue that changed the project, Maltes said, was the appraisal “well below the total amount of debt,” which was bypassed by an alternative valuation based on “net present value of expected future cash flow,” which required “a high enough lease payment to justify a high enough valuation.”

Moria Holt, an owner of the Super 8 Motel, said that “For this hotel to succeed, other hotels are going to suffer, and we are a huge tax base right now for this community. … Knowing the inside of our business, I know that the city cannot handle another hotel.”

Hall said the project was “giving someone else money at the detriment of our business,” and added, “If we’re just looking for a library, that’s what we should build.”

To that, Maltes, who said he had financed more than $120 million in hotel projects, said, “People that would stay at Troy’s hotel are most likely going to stay in Dubuque” if the hotel wasn’t built. “It’s our professional opinion that we’re not going to see much cannibalizing here. … We think this is a signature project.”

“Competition helps us learn and stay better business people,” said Stockhausen. “I know it’s difficult for people to think in those terms.”