City of Oak Creek

Common Council Report

 

Meeting Date:   10/2/07

 

Item No.:        

 

 

Recommendation:  That the Common Council adopt Resolution No. 10791-100207, a Resolution Approving a Service and Assessment Agreement between Goodwill Industries of Southeast Wisconsin Ltd. and the City of Oak Creek. 

 

Background:  Goodwill Industries of Southeast Wisconsin Ltd. (“Goodwill”) plans to construct a work and training center and a corporate headquarters at 140 East Rawson Avenue.  The building will be approximately 150,000 square feet and will employ approximately 140 people.  The site is 13.1 acres.  Under Wis. Stats. Sec. 70.11(12)(a) the first ten acres of the property is tax exempt.  This is a specific tax exemption that has been adopted by the legislature for Goodwill.  There is a similar specific tax exemption for organizations such as the YMCA, Boy Scouts of America, Boys Clubs of America, Girl Scouts or Campfire Girls.  Pursuant to the City’s most recent revaluation the value of the property is $88,133.00 per acre or $1,154,542.00 for the entire parcel.  Since ten acres are tax exempt, the value of the taxable portion of the property is $273,212.00 resulting in a tax bill of approximately $5,300.00 based on the 2006 equalized tax rate.  Marty Kuehn, City Assessor confirms that once the facility is fully constructed the taxable 3.1 acres would be vacant land.

 

Goodwill has agreed to pay an additional $14,700.00 per year to the City pursuant to the Service and Assessment Agreement.  The total payment of $20,000.00 is the equivalent of what it costs Goodwill to subsidize one participant in the work program.  This is a strictly voluntary payment by Goodwill.  That amount would be adjusted on an annual basis. 

 

In order for the Agreement to be legally valid, the City must give monetary consideration to Goodwill in exchange for the payment in order to make this a legally binding contract.  The consideration does not necessarily have to be of equal value.  The consideration needs to be more than nominal and it was determined that the payment for installation of the sidewalk in exchange for the payment of the service and assessment fee was appropriate consideration.  At its September 4th meeting the Common Council approved using CDBG funds to assist in funding construction of the sidewalk.

 

In the absence of this agreement, Goodwill would not make any payments to the City for the ten acres that is exempt from taxation under Wisconsin law.  From the City’s perspective paying for the sidewalk in exchange for 20 years of payment of $14,700.00 per year for a total of $294,000.00 makes sense.  This Agreement is automatically extended for another 20 years unless either party gives notice to terminate.

 

Fiscal Impact:  As stated above.

 

 

Prepared by:

 

 

 

Lawrence J. Haskin

City Attorney

Respectfully submitted,

 

 

 

Patrick DeGrave

City Administrator

 

 

Fiscal Review by:

 

 

 

Beverly A. Buretta, CMC

City Clerk