City of Oak Creek
Common Council Report
Meeting Date: February 5, 2008
Item No.:
Recommendation: That the Council consider the request by Robert Fransway for a modification to the deed restrictions for the Liberty Woods Business Park.
Background: Robert Fransway, owner of the properties at 425 and 487 West Bell Court, is requesting that the Common Council modify the amended deed restrictions for the Liberty Woods Business Park with respect to a penalty that is imposed for the failure to improve those lots to a minimum value.
In December of 2000, Mr. Fransway purchased these lots in the Liberty Woods Business Park from the City. The original deed restrictions for these lots were recorded in December of 1999. An amendment to those deed restrictions, recorded in January of 2001, specifically dealt with improvements of Lots 3 and 4 within two years of the date of closing.
Also on December 12, 2000 the Plan Commission conditionally approved site and building plans for two buildings on these lots.
In October of 2001 a building permit was issued for Lot 3 (estimated value $450,000). However, the building was never completed, and no occupancy permits have been issued. To this day, the building and site remains unoccupied and incomplete.
According to the amended deed restrictions (which were approved as to form and content by Mr. Fransway) the two lots were to have been improved to a value of at least $1,647,000 (as determined by the City Assessor) within two years of the date of closing. If that value was not met, there were penalties imposed under a formula specified in the deed restrictions.
For the past four years Mr. Fransway has paid a penalty in accordance with those deed restrictions (see below).
|
2003-$25,550.00 (paid) |
Penalty because assessed value not met as of 12-20-2002 |
|
2004-$17,696.19 (paid) |
Penalty because assessed value not met as of 12-20-2003 |
|
2005-$18,183.55 (paid) |
Penalty because assessed value not met as of 12-20-2004 |
|
2006-$19,091.05 (paid) |
Penalty because assessed value not met as of 12-20-2005 |
|
2007 – pending $20,082.57 |
Penalty because assessed value not met as of 12-20-2006 |
|
2008 – pending $15,734.80 |
Penalty because assessed value not met as of 12-20-2007 |
In April of 2006 the City passed a Resolution closing out TIF #3, which encompassed these properties. Mr. Fransway has contended that, since the TIF is no longer in existence, that the penalties no longer are applicable. However, the deed restrictions do not make any connection, nor mention of the closure of the TIF district having any impact on the penalties imposed under the terms of that document.
The penalty was agreed to in the amended deed restrictions to address this very situation. There is no sound fiscal reason for the City to agree to a modification of the deed restrictions. It is not in the City’s best interest to have partially developed and unoccupied buildings in business parks the City creates under the TIF law.
Fiscal Impact: The development of these properties to the levels specified in the amended deed restrictions would provide additional revenue for all taxing jurisdictions. Based on the current assessed value of $994,600 for Lot 3 and $210,200 for Lot 4 (total $1,204, 800) these properties currently pay $23,246.54 in real estates taxes, of which $6,741.49 go to the City of Oak Creek. Under the minimum required real estate value of $1,647,000 those figures would increase to a minimum of $31,770.63, of which $9,213.48 would go to the City.
Prepared by: Respectfully Submitted,
Doug Seymour, AICP Patrick DeGrave
Director of Community Development City Administrator
Fiscal Review by:
Beverly A. Buretta, CMC
City Clerk