City of Oak Creek

Common Council Report

Meeting Date:  July 17, 2007

Item No.: 

Recommendation:  That the Council consider and provide staff with guidance on the elements of a proposed development agreement between the City and 2201 W. Southbranch, LLC for the development of an expansion to the Joseph A. Campione facility as part of Tax Incremental District No. 7.

Background On Friday, April 27th the Joint Review Board approved the creation of Tax Incremental District No. 7 in the City of Oak Creek.  One of the development proposals that initiated the discussions leading up to the creation of the TIF was the proposed expansion of the Joseph Campione facility at 2201 W. Southbranch Blvd.

Joseph Campione Enterprises is proposing to construct a 102,016 square foot addition to their existing facility (which is 87,500 square feet).  The addition will be onto the southern end of their existing facility.  Joseph Campione Enterprises has an accepted offer to purchase for the additional land to accommodate this expansion.  The additional property is being acquired from the City of Oak Creek.

The new addition will allow for additional production lines, ovens, storage, refrigeration, and an office/lobby addition.   There will also be an 8-bay loading dock, tucked into the southeast corner of the building.  In terms of architecture, the entire west elevation of the new addition as well as the two-story office portion of the south elevation will be brick and glass.

More detailed information on the proposal is contained in the attached TIF application submitted by 2201 W. Southbranch LLC.

This evening you are being asked to consider and comment on possible terms for a TIF finance development agreement between 2201 W. Southbranch LLC and the City.  Central to that discussion will be the total amount of subsidy that 2201 W. Southbranch LLC is requesting in order to make the project feasible, and the length of time that those increments will be paid back (and at what percentage) to 2201 W. Southbranch LLC from the taxes generated by the new development within the TIF district.

2201 W. Southbranch LLC has requested a subsidy in the amount of $900,000 (plus interest).  This figure represents a reduction from their original proposal for $1.2 million dollars of assistance in November of last year.  The exact time period under which the increment would be paid to 2201 W. Southbranch LLC is yet to be determined.  However, in their application, 2201 W. Southbranch LLC indicated that a period between 5.3 and 11.25 years.

There appears to be a consensus between within the TIF 7 working group that a figure of $900,000 is appropriate.  This figure represents a direct incentive to 2201 W. Southbranch LLC to expand their business in Oak Creek.  The time period under which the increment would be paid would be negotiated into the finance agreement.

The draft fiscal analysis that has been completed by Gruen & Associates has indicated that there is a need for a subsidy in this instance. 

Fiscal Impact:  The direction provided by the Council will form the basis for a finance development agreement that will outline the terms under which 2201 W. Southbranch LLC is reimbursed through the increment they provide in the TIF district.

Prepared by: Doug Seymour, AICP Director of Community Development

Respectfully submitted, Patrick DeGrave City Administrator

Fiscal Review by:

Beverly A. Buretta, CMC

City Clerk