After failing to approve a $16 million tax incremental financing deal for the Edgewater Hotel two weeks ago, supporters of the project sounded an apocalyptic note.
"We demolished the Edgewater. We did," Ald. Mark Clear told his colleagues and predicted that in a couple of years, "the Edgewater will be closed and we'll be looking at a demolition permit for that property."
The project's developer, Robert Dunn, president of Hammes Co., is racing to get the $16 million in tax incremental financing secured by the end of the year. It was approved in the 2011 budget, but is available only until Dec. 31. In next year's budget, $3.3 million in TIF funding was approved.
Ald. Bridget Maniaci, whose district includes the hotel and who lobbied for the project, says that if Dunn can't get the $16 million, no other redevelopment plans are likely. "Who in their right mind is going to say 'I think this is a smart investment'?"
Ald. Mike Verveer disagrees: "I don't believe the dire doomsday predictions that no investment will occur anytime soon. It's such prime real estate there…that it's not a matter of if, but when, we'll see future proposals."
Verveer adds that when Dunn first started looking at the project, he considered a range of options but settled on the most expensive. "[Dunn] wanted to go with the sky-is-the-limit model, and that's what he did," says Verveer, adding he wouldn't be surprised if Dunn makes a more modest proposal.
Dunn and hotel co-owner Scott Faulkner did not return phone calls for comment.
Troy Thiel, a real estate agent and developer, agrees there will be more opportunities for the hotel. "If there's money to be made, there's a project there," Thiel says. "The [Hammes] deal just wasn't good enough. There's a better project there."
Who benefits from Edgewater failure
Should Dunn fail to get the $16 million TIF funding by the end of the year, who would benefit the most?
"The winners are the taxpayers," says Ald. Verveer, who voted against the funding. "With the $16 million grant - and it's really a grant, not a loan - not happening, the reality is the taxpayers are no longer on the hook for the $16 million and the additional debt service."
Dave Schmiedicke, the city's finance director, says "the effect on taxes is difficult to completely quantify."
When tax incremental financing districts - or TIDs - are created, the property value of the whole district is frozen for taxing purposes, in terms of local government. As new investments are made, and property values increase, the additional revenue is used to pay down any loans associated with those investments. Once all the loans are paid off, the TID is closed, and the property is taxed at its full value.
TID 32, which includes Edgewater, State Street and parts of University Avenue, was opened Jan. 1, 2003. Since then, property within the district has grown in value by $112 million, Schmiedicke says.
"If the [Edgewater] development had occurred, you would have had certain value come onto the tax rolls," Schmiedicke says. "All property would have benefited from that. And there would be more room tax, more sales tax to the county."
On the other hand, Schmiedicke says, without a $16 million loan, the TID can close sooner, and the district will be taxed at its full value. "All other things being equal…the mill rate would be that much lower, and the taxes on the average home would be slightly lower."
(Not) on the bus
If you'd like to sign a petition to recall Gov. Scott Walker, you won't find one on a Madison Metro bus. The transit agency has ruled its buses off limits, based on a policy established in 2005 that forbids canvassing or soliciting.
"We feel it could cause a disruption among passengers, and that can cause a distraction of our drivers," says Metro spokesman Mick Rusch.
Ticket dismissed
A $30 parking ticket written to Ald. Bridget Maniaci for parking in a lot behind the Madison Municipal Building (see Madison.gov, 10/20/2011) has been dismissed.
Alders are allowed to park in the lot for up to two hours during weekdays when conducting official city business. A city employee saw Maniaci's car in the lot at lunchtime on Sept. 1 and saw it again the next morning without having been moved. Maniaci fought the ticket.
Assistant District Attorney Diane Schlipper says she dismissed it because "based on the signage and the time that the ticket was written, I didn't think it was going to be a case that I could prove."
Overture search almost complete
The Overture Center Foundation, the nonprofit that will take over management of the arts center on Jan. 1, has narrowed its search for a new executive director down to five people.
Four of the candidates are from out of town; the fifth is Overture's current director, Tom Carto. The board expects to make an offer by the end of the year, says Overture spokesman Robert Chappell.
"They're all very well qualified and accomplished people," Chappell says. "It's a matter of finding the right fit for the organization."
Chappell says the foundation promised the candidates confidentiality and won't be releasing their names.
