(Madison, WI)"Steve Schooler and Bill White, both of Porchlight, spoke in favor of the swap despite the environmental factors, which they said would need to be investigated further before Porchlight agrees to a legally binding agreement with the city."
Land swap OK'd, would bring homeless services to east side site
Despite several financial and practical questions about the process, the City Council voted overwhelmingly to complete a land swap that would bring economic development opportunities to the city's south side and homeless services to the east side.
The Truman Olson Army Reserve Center, 1402 S. Park St., which is scheduled to close within the next four years, was earmarked for homeless services under federal government guidelines.
But after prioritizing a plan from Porchlight Inc. to create 38 spaces for permanent and temporary housing for the homeless, south side council members Julia Kerr and Tim Bruer sought an alternate site for the plan, citing concerns about the south side carrying more than its fair share of housing for low-income residents as well as the transitional housing detracting from economic development plans in the area.
One of the suggested alternatives was a site on the far east side on Water Utility land at 4002 Nakoosa Trail, which would involve a paper transaction between the utility and city as well as the city's purchase of the Truman Olson site.
The Army must still approve the proposal for the swap. The due date for a proposal to the Army is Sept. 14, forcing the council to make a decision Tuesday night despite some feeling like there wasn't enough information.
Several council members, including Satya Rhodes-Conway, Brenda Konkel and Michael Schumacher, raised questions about the cost of the land swap to the city, which would otherwise receive the land free from the Army, as well as the city's obligations to Porchlight if the logistics of the swap failed to go through and whether the new site, which requires significant environmental cleanup, could be considered "substantially equivalent" to the Truman Olson site.
"I know that we have some pieces that are still in motion, but do we end up at zero or do we end up at minus one million or do we end up at minus three million?" asked Konkel.
Steve Schooler and Bill White, both of Porchlight, spoke in favor of the swap despite the environmental factors, which they said would need to be investigated further before Porchlight agrees to a legally binding agreement with the city. The Water Utility land would allow implementation of Porchlight's plan to begin immediately, not when the Army releases the Truman Olson land in three to four years, and would allow space for 18 additional units.
According to Matthew Mikolajewski in the city's Office of Business Resources, the swap has the potential to cost the city $2.2 million for the purchase and demolition of the Truman Olson site as well as at least $425,000 for the Water Utility land, not including further environmental cleanup at the site. That money, however, could be made up by creating a tax incremental financing (TIF) district in the area of the Truman Olson building, he said.
A TIF district would allow the city to spend money to attract development to the area, resulting in a net gain of property taxes. In order to recoup the $2.2 million cost of the Truman Olson building, about $12 million in development would be required. Projections from the Wingra BUILD plan -- the economic development plan for the area between Wingra Creek, Park Street and Fish Hatchery Road that includes the Truman Olson building -- estimate potential development at the building site at $53 million and more than $100 million for the area in total.
"I think it's well within the realm of why we do TIF for redevelopment in the city of Madison," said Joe Gromacki, the city's TIF coordinator, although he added that typically a "generator" project for the TIF district is usually in place before the district is created, which is currently not the case.
Several council members also spoke to the improved chances of economic development in the Truman Olson area if the homeless services were moved, which would create more flexibility for construction of a road, Cedar Street, that would connect Fish Hatchery and Park Street at another point.
"This project is Economic Development 101. It's a textbook example of economic development," said Ald. Mark Clear. "Cities don't create jobs. They don't create economic development. They create the environment for economic development."
To appease council members concerned about writing a "blank check" by committing to this land swap before financial details were set, Ald. Brian Solomon proposed a compromise that would keep the City Council active in each phase of the project as well as send the Porchlight proposal back to the Truman Olson site if the logistics are not promising when the Truman Olson site is officially turned over in 2012.
Mayor Dave Cieslewicz also chimed in in favor of the swap, saying that it benefited all parties.
"We have two alders on the east said who have been very welcoming to this project," he said. "Secondly, we have the homeless provider, Porchlight, saying this is actually now their preferred site for one reason because they can get it built quickly .... Third, there's no question in my mind that this is best for economic development."
