On the Library Block
As the Library Block project nears final approval by the Platteville Common Council and the details of this project finally come to light, we are finding that it differs significantly from what was originally represented to the community.
It’s my view that through the Library Block project the city is choosing to subsidize a non-local developer with a project that will directly compete with existing businesses in Platteville as well as negatively impact other development projects in town. Others have expressed their concern as well.
What prompts this letter, however, is the significant deviation from the original representation of the cost to the city to subsidize the Library Block project.
On Jan. 21 the city held a public informational meeting at Wisconsin Bank & Trust. At that public meeting a handout was provided claiming:
• The city will be using new tax revenue from the development to provide an upfront incentive to the developer via Tax Incremental Financing funds.
• The developer will lease the library to the city for $1 per year for seven years, after which ownership will transfer to the city.
• Tentative financing for the project included $4 million in New Market Tax Credits, $1.5 million in private equity investment, and an unknown amount of TIF monies and private financing.
At that public forum I specifically asked what amount of TIF monies would be provided to the developer. After three unanswered requests to the city manager, the developer stood up with calculator in hand, punched in some numbers and declared the maximum amount of TIF incentive to be provided by the city would be $1.2 million.
Since that time there have been multiple closed meetings by city officials and council members and others pertaining to this project. I’ve been told that requests for information during these meetings were denied.
In a presentation to the Common Council Oct. 27 the following was stated:
• City TIF contribution: $2 million.
• City contribution of existing library building: $800,000. (Previous figures stated the value of that contribution at $575,000. When questioned, it was stated that the $800K was a misprint.)
• Guaranteed tax increments: $2.685 million by the developer over 20 years starting in 2017.
• The “Development Agreement Risk” section of the presentation indicated there is no guarantee the library will be turned over to the city after the seven years.
In that same Common Council meeting a handout, “Library Block Redevelopment Frequently Asked Questions,” stated:
• Over 20 years the city will recoup $3 million on its $2 million investment (this is just less than 2.5-percent accumulative return on investment).
• Only $2.685 million in tax payments are guaranteed by the developer.
• To reach the $3 million return, if the tax increment of the project does not cover the $3 million the $315,000 shortage will be generated in a TIF “donor district.” (It is my understanding that TIF 7, where this project is located, is a “distressed” TIF distrcit, effectively meaning that the tax increment from that district will not support the district’s debt. With that designation the city can then direct TIF funds from another district to TIF 7. TIF 5, the Keystone Development, is currently a donor to the distressed TIF 7 with monies from TIF 5 going to TIF 7 to support its current debt.)
• The statement “the project includes a $6 million commercial building that will house a new public library” infers the library will be a $6 million building, or $273 per square feet. Compare this to the new 6,800-square-foot library being built in Muscoda at a cost of approximately $200 per squqre foot. Considering economies of scale a 22,000-square-foot building should cost even less per square foot.
Instead of paying $1 per year, the city will now pay a monthly lease payment to the developer in the amount of $18,333 per month. The cost to the city initially represented for those seven years increases from $7 to $1.54 million — yes, that’s right, a 22 million percent increase!
To be very succinct, here are my concerns:
• The city is subsidizing a non-resident developer to put up a hotel which will compete with local businesses that receive no city subsidy whatsoever.
• Original representations have been changed significantly behind closed doors with what appears to be very little public input.
• The city is doing this to be given a library. A new library is a laudable goal, but it was originally represented as costing the city no more than $1,200,007. It is now represented at costing the city $3.54 million during the first seven years, not including operational costs. Plus, there is no guarantee that the library will be turned over to the city at the end of the seven years.
It seems that almost all information made public on the Library Block project has been to “sell” the project to the public and not an objective assessment of the positives or negatives. Since public information on the process and the final outcome has been minimal as best, one is left to wonder why the deal has changed so much and why in its current form is proceeding.
I’m seldom one to be cynical, but it seems a bait-and-switch was not only pulled on the public but the Common Council as well. Once they were sold on a “free” library the entire Library Block effort has gained so much momentum it’s hard to turn around, even if the advertised as “free” now costs the city millions of dollars.
To be transparent: this project is affecting our Keystone Development, the 170-acre development where Menards, Walmart, Benvenuto’s, McDonald’s, Sherwin Williams, as well as other businesses are located. Even though there continues to be direct impact in our ability to entice a hotel project in Keystone because of the Library Block project, to this point in time I have not voiced opposition or in any way tried to stop it as it was represented by the city as providing the city with a new library. Free … well, not quite; it was to cost $1 per year for seven years at which time it was to be turned over to the city.
If my understanding and the general information herein is correct, would we not be better off as a community taking that $3.54 million and building a library that we know will be owned by the community?
The Developer’s Agreement has not been finalized yet and to the best of my understanding has not been made public. It’s my understanding that Council approval for this deal, previously scheduled for Tuesday, is now scheduled for the Nov. 24 Council meeting.
I ask that you consider the information in this letter carefully and with an open mind. If you’re at all concerned, then ask your own questions.
If, like me, you are concerned about the direction and current status of this project, I suggest you attend the next City Council meeting to make sure concerns are heard
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