Community Development Authority Board of Directors

Community Development Authority Board of Directors Whitewater Municipal Building, Cravath Community Room, 2nd Floor, 312 W Whitewater St, Whitewater, WI 53190 *In Person and Virtual* Wednesday, February 26, 2025 - 6:00 PM MINUTES CALL TO ORDER The meeting was called to order at 6:00 p.m. by Board Member Greg Majkrzak. ROLL CALL PRESENT Board Member Thayer Coburn Board Member Jon Kachel Board Member Joseph Kromholz Board Member Neil Hicks Board Member Greg Majkrzak Board Member Christ Christon STAFF Taylor Zeinert EDD APPROVAL OF AGENDA Board Member Coburn requested that items 1,4,5,6 be moved off of the Consent Agenda. Board Member Majkrzak requested items 10,12,14 be moved into Open Session. Motion to approved agenda as amended made by Board Member Coburn, Seconded by Board Member Hicks. Voting Yea: Board Member Coburn, Board Member Kachel, Board Member Kromholz, Board Member Hicks, Board Member Majkrzak, Board Member Christon CONSENT AGENDA Items on the Consent Agenda will be approved together unless any committee member requests that an item be removed for individual consideration. Board Member Hicks noted corrections to the December minutes. Board Member Knight was incorrectly listed as abstaining from a vote on items 10 and 11; the abstention needs to be attributed to Jon Kachel instead. Motion made to approve Consent Agenda items with noted corrections, by Board Member Majkrzak, Seconded by Board Member Kachel. Community Development Authority Board of Directors Minutes February 26, 2025 Page 2 Voting Yea: Board Member Coburn, Board Member Kachel, Board Member Kromholz, Board Member Hicks, Board Member Majkrzak, Board Member Christon HEARING OF CITIZEN COMMENTS No formal Committee action will be taken during this meeting although issues raised may become a part of a future agenda. Participants are allotted a three minute speaking period. Specific items listed on the agenda may not be discussed at this time; however, citizens are invited to speak to those specific issues at the time the Committee discusses that particular item. To make a comment during this period, or during any agenda item: On a computer or handheld device, locate the controls on your computer to raise your hand. You may need to move your mouse to see these controls. On a traditional telephone, dial *6 to unmute your phone and dial *9 to raise your hand. Citizen Jeff Knight: Mr. Knight outlined his concerns regarding TIF funding, which he explains in detail in a letter distributed to board members at the meeting. The letter is attached as part of the minutes. Citizen Ben Friarmuth, Property Manager for HSI Rentals: Mr. Friarmuth expressed concerns regarding the use of outside developers and the effects this has on increasing taxes. PRESENTATION 3. Presentation by Slipstream LLC regarding the status of their loan. (Choton Basu) EDD Zeinert introduced the presenter, Choton Basu, one of the company founders and a UW-Whitewater professor. Professor Basu reviewed history of this partnership with CDA, which dates back to 2013 when Strive was started. This project was funded with CDA funds and funds from other investors. It is housed in the Innovation Center. Strive is a mobile application designed to increase enagagment in community events. The business has been struggling since the advent of the COVID pandemic and is not making money. Owners have been meeting with the investors to discuss the company's future. The CDA has received a list of all the company's assets. Board member Kachel asked when the last payment on the loan from CDA was made. No payments have been made. A demand letter was issued 2/11/2025. The loan will be discussed in Closed Session. 4. Presentation by Safe Pro, LLC requesting funds via the capital catalyst program. (Paul Eckert and Robert Austin) EDD Zeinert introduced presenters, Paul Eckert and Robert Austin, founders. Those in attendance watched a video about the company. Safe Pro technology is designed to save lives during active shooter and dangerous events, using artificial intelligence and sensor technology to deploy an evacuation laser guidance system that guides people away from danger. (add video link?) Community Development Authority Board of Directors Minutes February 26, 2025 Page 3 Safe Pro Technologies has been a member of the community since 2020 and works out of the Innovation Center. The CDA previously gave Safe Pro a loan for a $100,000, which they have consistently paid on time. Safe Pro is excited to share that they are about to go to market; however they need additional funding of $100,000 to do so. DISCUSSION: Citizen Jeff Hale asked what was learned from the partial pilot program at Greenfield High School. It was successful and they are working on putting together funding for full implementation. Safe Pro has also been in contact with two other high schools and a Fortune 500 Company. Board Member Hicks asked where the devices are manufactured. The components are made outside the United States and assembled here. The intricacies of the system were explained. Safe Pro has incorported all the components of the system in-house to maintain quality control and control costs. They are looking for funding to be able to do a full-scale implementation project before they go to market. This project is again in the running in the Governor's Business Plan competition. Presenters thanked the CDA and the Innovation Center for their ongoing support. CONSIDERATIONS / DISCUSSIONS / REPORTS 5. Jeff Knight Resignation EDD Zeinert thanked Jeff Knight for his service. He served on the CDA from 2010-2017 and joined the board again in 2023. Mr. Knight submitted a letter to all board members and stated his concerns regarding getting data in an open records request to the City and the transparency of the TIF processes. 6. Staff report regarding Ownership, restrictions of the Innovation Center. (EDD Zeinert) EDD Zeinert explained that CDA Attorney Manthe did an analysis of who has true ownership of the Innovation Center and any the restrictions on its sale or use. The grant used to help build the Innovation Center was given to UW-Whitewater. The city is listed as a subgrantor. Therefore, if the center was sold, the city would be responsible of 60% Fair Market Value. Therefore, it is not in the best interest to sell the facility any time soon. DISCUSSION: Board Member Kromholz asked if there is a time limit on that restriction. EDD Zeinert said the attorney did not state that, so she will follow up to find out. Citizen Brad Syransky asked if the building, with current renters in place covers its full costs. EDD Zeinert stated the building currently breaks even. 7. Staff Report regarding use of TIF in other Neighboring Communities. (EDD Zeinert) Community Development Authority Board of Directors Minutes February 26, 2025 Page 4 On 2/11/25, a memorandum from the City Manager was sent to the Common Council and to this body, entitled Strategic Use of Tax Increment Financing (TIF) to Support Housing Development in Whitewater. The memo is included in the meeting packet. DISCUSSION: Board member Kachel stated that Waterford and Whitewater have significant differences in owner-occupancy rates. Board member Christon noted that Whitewater is a university town. None of the communities in the surrounding area are university towns, which makes it difficult to make adequate comparisons of rental occupancy rates. Board member Kachel stated that under the federal government's registration act, undocumented people will be asked to register and then peacefully leave the country. He stated that in Whitewater we have over 1,000 people living here that were not in this country two or three years ago. He believes that this action will significantly increase the number of available rentals. He also cited declining enrollment predicted in 2026 and forward. Board member Kromholz asked if there is a census of the number of landlords renting to undocumented people. Anecdotal evidence was shared; hard data was not provided. In order to adhere to open meeting laws, EDD Zeinert directed the discussion back to the agenda item in consideration, Strategic Use of Tax Increment Financing (TIF) to Support Housing Development in Whitewater. Citizen Terry Stitzel, a local heating contractor: His observation is that there are a lot of undocumented people in the units he services. Citizen Ben Holden, founder of Commen Sense Citizens: He shared retirees' concerns about about TIF money going to subsidized housing plus the upcoming referendums leading to tax increases which will be difficult for them to handle on a fixed income. Citizen Jeff Knight explained that he reviewed eight developer agreements that were sent out by the City Manager. He stated that all eight are making a much lower TIF contribution than the City of Whitewater is. Citizen Larry Kachel pointed out the differences in TIF percentages in the Waterford and Elkhorn models compared to current City practices. He explained that the original purpose of TIF is to clean up blight and create jobs. Board Member Majkrzak stated that currently developers say they will not build here without TIF. 8. Staff Report regarding Mukwonago's TIF-Funded Development Agreement. (EDD Zeinert) On 2/11/25, the City Manager sent a memorandum to the City Council and CDA entitled, Analysis of Mukwonago’s TIF-Funded Development Agreement. EDD Zeinert noted that the approach currently utilized by the City of Whitewater is a more conservative approach than that described in the memo. Community Development Authority Board of Directors Minutes February 26, 2025 Page 5 DISCUSSION: Citizen Jeff Knight: With as many properties that are being proposed based on the projections in the Tracy Cross reports, it could result in an increase in an estimated 642 children, which would likely require an additional elementary school. This is an example of how TIF projects can eventually end up increasing taxes. Citizen Larry Kachel distributed and commented on a Wisconsin Legislative Council memo dated 11/29/2022, entitled Effects of a Tax Incremental District on Municipal Levy Limits. This memo will be attached to the minutes. Board Member Jon Kachel commented on the memo distributed by Larry Kachel, citing nearby communities' percentage of rental housing as compared to Whitewater's. Citizen Peter Jordan expressed his opinion about the high social costs of having so many rental properties in Whitewater. 9. Staff Report on Letter of Intent with Bielinski Homes and Hale Farms, LLC. (EDD Zeinert) EDD Zeinert stated that the memo included in the packet will be corrected to reflect that buyer (Bielinski) be required to source "some" of the lumber locally, rather than "all" lumber as the memo currently states. Bielinski has their own sourcing practices, therefore could not agree to this contingency. Because of that, this project cannot move forward. DISCUSSION: Citizen Jeff Hale, of Hale Farms LLC and Home Lumber, commented on using locally sourced materials and labor by projects being done by large general contractors coming in from out of town and its negative impact on community development. Board member Kachel asked if there was any way for the deal to move forward. Mr. Hale responded no, not unless they agree to use at least some local resources. Citizen Carol Ellison, resident of Whitewater, asked how the solicitation of bids process works. EDD Zeinert explained the bid process and the TIF negotiation process. Citizen Jeff Knight commented on the lack of response to his open records request for information on the calculation of vacancy rates in recent studies of housing needs in Whitewater. EDD Zeinert explained that there has been a delay in fulfilling open records request due to staff turnover in the city attorney office. 10. Discussion and possible action regarding loaning funds to Safe Pro, LLC via capital catalyst. EDD Zeinert recommended moving forward on the loan because of the product's benefits and because they have been consistently paying on their loan. The $100,000 would come from the Capital Catalyst Fund. Motion made by Board Member Majkrzak, Seconded by Board Member Kromholz. Voting Yea: Board Member Coburn, Board Member Kachel, Board Member Kromholz, Board Member Hicks, Board Member Majkrzak, Board Member Christon Community Development Authority Board of Directors Minutes February 26, 2025 Page 6 11. Discussion and possible action regarding Farm Lease. EDD Zeinert explained that the City owns vacant land around the industrial park. Currently there is a farmer who leases the land. Some of the lots he was previously farming are no longer owned by the City. This is a recommendation to amend the lease to adjust for parcels that have been sold by the City to a third party for development. Motion made by Board Member Hicks, Seconded by Board Member Majkrzak. Voting Yea: Board Member Coburn, Board Member Kachel, Board Member Kromholz, Board Member Hicks, Board Member Majkrzak, Board Member Christon 12. Discussion and possible action LOI with the City of Whitewater and Walworth County Habitat for Humanity. EDD Zeinert reviewed the status of the property at 216 E. Main Street and the Letter of Intent from Walworth County Habitat for Humanity. There was a discussion on costs of demolition of the property. EDD Zeinert stated that bids have been received and would be discussed at the next meeting. Motion to approve signing of the Letter of Intent (LOI) from Walworth County Habitat for Humanity. Motion made by Board Member Hicks, Seconded by Board Member Kromholz. Voting Yea: Board Member Coburn, Board Member Kachel, Board Member Kromholz, Board Member Hicks, Board Member Majkrzak, Board Member Christon EXECUTIVE SESSION Adjourn to Closed Session, TO RECONVENE, pursuant to Wisconsin Statutes 19.85(1)(e) “Deliberating or negotiating the purchasing of public properties, the investing of public funds, or conducting other specified public business, whenever competitive or bargaining reasons require a closed session. Items to be discussed: Motion to move into closed session passed by unanimous voice vote. Items to be discussed: Discussion and possible action regarding the Slip Stream Loan. Discussion and possible action on Pre 3 Offer to Purchase vacant land located at /A444200001. Discussion and possible action of a development agreement with Arch Development. Discussion and possible action regarding termination of the contract with Anderson Group. RECONVENE INTO OPEN SESSION 14. Discussion and possible action related to the Slip Stream Loan. Discussion and possible action on Slip Stream Loan. No Action Taken. Community Development Authority Board of Directors Minutes February 26, 2025 Page 7 15. Discussion and possible action on Pre 3 Offer to purchase vacant land located at /A444200001. Motion to approve the sale of the property to Premier Real Estate Mangement. Motion made by Board Member Majkrzak, Seconded by Board Member Kromholz DISCUSSION: Citizen Jeff Knight spoke against this project due to location and zoning. Mr. Knight asked about the incentive package and was advised the only item on the agenda currently is the offer to purchase. Voting Yea: Board Member Coburn, Board Member Kromholz, Board Member Majkrzak, Board Member Christon Voting Nay: Board Member Hicks Voting Abstaining: Board Member Kachel 16. Discussion and possible action of a development agreement with Arch Development. No action taken. 17. Discussion and possible action with regards to terminating the contract for Anderson Group. Staff is directed to terminate for cause the contract with Anderson Commercial Group. Motion made by Board Member Majkrzak, Seconded by Board Member Hicks DISCUSSION: EDD Zeinert was asked the reasons for termination. She outlined compaints received about slow or lack of follow up when people inquire about properties, and when asked by staff to make contacts regarding certain properties they do not go directly to the owners. Because of that and poor performance, staff recommended the CDA review the contract. Anderson Group was asked to attend the meeting tonight and did not attend. Voting Yea: Board Member Coburn, Board Member Kachel, Board Member Kromholz, Board Member Hicks, Board Member Majkrzak, Board Member Christon FUTURE AGENDA ITEMS Discussion of badged card access system at the Innovation Center. Options for holding liquor licenses when giving out loans. Update procedures on public comment portion of the meeting, reinforcing that public comment is heard by the board but no discussion follows at that time. ADJOURNMENT Motion made by Board Member Hicks, Seconded by Board Member Kachel. Voting Yea: Board Member Coburn, Board Member Kachel, Board Member Kromholz, Board Member Hicks, Board Member Majkrzak, Board Member Christon