Number
031366
Version
SUBSTITUTE 2
Reference
040025
Sponsor
ALD. HINES, WITKOWIAK, WADE, MURPHY, DAVIS, McGEE AND HAMILTON
Title
Substitute resolution relative to the redevelopment of the Traser Yards site at North 6th and West Canal Streets as well as properties adjacent thereto.
Analysis
This substitute resolution approves the terms for a redevelopment project covering approximately 20 acres, owned or controlled by the City or Redevelopment Authority, at North 6th Street and West Canal Street. H-D Milwaukee, LLC, a company wholly owned by Harley-Davidson, proposes to develop a $95 million complex of buildings on these sites, including a museum, cafe, retail and banquet space, archive and restoration structures and general office space. The complex will consist of 230,000 square feet of facilities to be developed in three phases over seven years. Ultimate employment at the complex is estimated at 420 to 570 positions.
The proposed project requires the DPW Traser Yards facility to be relocated from this site as originally contemplated in the Menomonee Valley Plan adopted in 1998.
This file approves a Term Sheet agreeing in principle to take certain actions necessary to implement this project, many of which will require subsequent approval by the Common Council and the Mayor including:
1. Relocation of the Traser Yards facility by February, 2006. DPW has introduced a companion resolution, File No. 040025, authorizing the City and Redevelopment Authority to enter into a Cooperation Agreement and negotiate a Turnkey Agreement for a Traser Yard replacement facility, combined with a Water Department Distribution facility, all to be located at approximately North 35th Street and West Nash Street, on the site of the Tower Automotive operations.
2. The creation of a tax incremental finance district, with all funding to be advanced by Harley-Davidson, to fund extraordinary site improvements for the project in the maximum amount of $_5.3 million for Phase I (museum, retail space, etc.) and the maximum amount of $7 million upon completion of all Phases.
3. The provision of a $7 million letter-of-credit by Harley-Davidson to be drawn upon by the City in the event Phase I of the development is not completed per the terms and conditions of the Term Sheet.
4. Agreement, in principle, to vacate certain street segments, cooperate with necessary zoning changes, relocate utilities and similar activities necessary to implement the development.
Body
Whereas, The City of Milwaukee ("City") and the Redevelopment Authority of the City of Milwaukee ("Redevelopment Authority") own, or, in conjunction with Menomonee Valley Partners, Inc., otherwise control, approximately 20 acres of property (the "Project Site") in the vicinity of North 6th Street and West Canal Street, including the Department of Public Works' maintenance facility known as the Traser Yards, which occupies approximately 7.1 acres; and
Whereas, The Market Study, Engineering and Land Use Plan for the Menomonee Valley, adopted as an element of the City's Comprehensive Plan pursuant to File No. 980698 on September 23, 1998, provides for the redevelopment of this area, including the Traser Yards facility, as a "mixed-use, waterfront oriented activity center," and calls for the relocation of the Traser Yards facility as well as other industrial and warehousing uses located on this property; and
Whereas, H-D Milwaukee, LLC, ("Developer") a Wisconsin limited liability company, wholly owned by Harley-Davidson Motor Company, Inc., has proposed to acquire and redevelop the Project Site in three phases (hereinafter the "Harley-Davidson Project," or "Project") as follows:
Phase I - Shall consist of the Harley-Davidson Museum, a cafe, retail space, banquet and restaurant facilities and related office and technical support facilities, having a total of approximately 110,000 square feet, plus related site improvements of the entire project site, to be developed at an estimated cost of $60 million.
Phase II - Shall consist of an expansion to the museum facilities, including archive and restoration facilities, of approximately 20,000 square feet, and additional exhibits, to be developed at an estimated cost of approximately $15 million.
Phase III - Shall consist of one or more office and/or commercial buildings having a total of approximately 100,000 square feet to be developed at an estimated cost of $20 million.
; and
Whereas, The Harley-Davidson Project will be developed over a period of up to seven years, with Phase I (museum, cafe, retail space, banquet and restaurant facilities and related office and technical support facilities and site improvements) to be completed within twenty-four months of the relocation of the Traser Yards facility; and
Whereas, Total employment from the Harley-Davidson Project is estimated to be 420 to 570 full-time positions; and
Whereas, The Harley-Davidson Project is expected to attract 350,000 visitors to the City each year and will serve as a dynamic catalyst to stimulate the redevelopment of the numerous privately owned sites and underutilized buildings in the Menomonee Valley, the Walker's Point neighborhood and the west side of Milwaukee's central business district; and
Whereas, The annual economic impact of the Harley-Davidson Project has been estimated by the Metropolitan Milwaukee Association of Commerce to be nearly $78 million, including $44 million in resident income (wages, salaries and proprietors' income), and $12.3 million in state and local government revenue; and
Whereas, The general actions necessary to implement the Project by the Developer, the City and the Redevelopment Authority are set forth in a Term Sheet, a copy of which is attached to this Common Council File; and
Whereas, The principal provisions of the Term Sheet and the actions contemplated thereby are as follows:
The Developer will acquire the Project Site, including the Traser Yards facility, for $150,000 per acre, less estimated demolition costs; and will lease the Traser Yards facility back to the City for $1.00 per year until February, 2006, at which point the City will be required to vacate the current Traser Yards facility or pay an annual rent of $120,000 per year.
The City, the Redevelopment Authority and the Developer will cooperate in certain street vacations, utility relocations, zoning changes and other actions necessary to implement the Harley-Davidson Project.
The City will establish a tax incremental district, with all funds to be advanced by the Developer, to assist with funding certain site improvements, including environmental remediation, dockwall improvements, extraordinary foundation costs associated with the proposed structures, methane ventilation systems, utility relocation and street vacation costs and other related site costs. The maximum amount of assistance from the Tax Incremental District will be $5.3 million upon completion of Phase I and not to exceed $7 million upon completion of all Phases.
Harley-Davidson shall provide a $7 million letter-of-credit to be drawn on by the City in the event Phase I of the development is not completed per the conditions of the Term Sheet.
The City will vacate the current Traser Yards facility on or before February, 2006, it being understood that the Department of Public Works is proposing to relocate the Traser Yards facility in combination with a new Water Department Distribution facility at a site located at North 35th Street and West Nash Street on property being sold by the Tower Automotive Corporation.
The replacement Traser Yards facility and the proposed Harley-Davidson Project will be subject to current requirements regarding the utilization of Emerging Business Enterprises and the requirements of the Residents Preference Program.
; now, therefore, be it
Resolved, By the Common Council of the City of Milwaukee, that the proper City officials are authorized and directed to enter into a Development Agreement for the Harley-Davidson Project consistent with the Term Sheet and to initiate such additional actions as provided in the Term Sheet and as are necessary to proceed with the Project; it being understood that creation of the proposed tax incremental district, the anticipated zoning changes, street vacations and utility relocations, as well as the sale and lease-back of the Traser Yards and such similar actions, shall be subject to separate approval by the City.
Drafter
DCD:JS:ta
05/13/04
Sponsors added 5/21/04. mbh