Common Council Reconsiders TID #12 Creation for KC Hall Hotel Project

MARSHFIELD, WI (OnFocus) At its March 12 meeting, the Common Council reconsidered the creation of TIF District No. 12, this time without developer incentives for a Hampton Hotel project on the KC Hall property at 400 W. Upham St.

The developer, Prairie Lodging, LLC, asked the Council to consider waiving the special assessments that go along with the creation of the TIF district, which in its case would mean an estimated benefit of $75,000.

“It’s not a direct incentive where it would go towards to the developer,” said Josh Miller, Development Services Director. “It would actually go towards infrastructure, and we would not be recouping any of the money back through special assessments.”

[Related: TIF Funding Explained.]

In January, the Council denied the formation of TID #12 that would have granted $750,000 in incentives to the hotel and helped pay for road improvements within a ½ mile radius of the property. Despite this decision, the developer stated an interest in continuing with the project.

The realtor for the site, Rita Blenker, told Council that the developer didn’t want the neighbors of the KC Hall property to have to pay for a special assessment, and that the developer is still likely to move forward with the project.

“He is back asking for this because I have suggested he ask for it, because he was feeling bad about the neighbors, so I said let’s just go back one more time,” said Blenker. “Is he still going to build it? He might. I don’t know. He’s putting his numbers together. Will $75,000 stop him from doing it? No, he is going to build it – It’s just where.”

A motion passed to postpone the decision until the city has a specific plan from a business for the site.

Council members discussed the issue:

“I think a TIF district is desperately needed at this location to preserve the neighbors. However, listening to some of my colleagues speak, I’m not sure that this is the right time because we don’t have a specified plan moving forward,” said alderman Tom Witzel. “We have this, ‘Well if you do, then we might reconsider’ situation, and that to me is still quite wishy-washy.”

“You’re not doing the KC Hall and ourselves a favor by not trying to put a TIF in there. Not saying the hotel is the right thing, but that property will not sell unless there’s something that can help that piece of property become viable,” said alderman Mike Feirer.

“So as far as creating a TIF here, I just think that that’s the wrong precedent to send. There are other distressed properties in our city that would likely come right behind this and ask for a TIF of their own,” said alderman Jason Zaleski. “There are certainly other streets in disrepair and others that need work that would qualify for these things that we’re not talking about.”

“The developer was suggesting that there may be some interest yet in constructing on the site, but they were wondering before they went into those waters with us whether or not creating the district and using tax increment funds as a means of waiving the special assessments for the area residents and themselves would be a possibility,” said Steve Barg, city administrator. “They’re not asking for us to create a district in advance of them making a commitment, they’re just wondering whether or not that commitment would be something that the city would consider as part of establishing a TIF district.”

“Marshfield is probably one of the most popular towns for organizations to come to,” said Alderman Mike Feier. “American Legion is one of them. The only reason they can’t come here is we don’t have enough hotel rooms.”

[At the January Common Council meeting, several representatives from local hotels stated that room occupancy hovers around 60% on average.]

“Many people have said is well, we can’t bring something in here because the occupancy
rates at this particular industry are not there to support another issue, and that could cause harm to that industry,” said Mayor Bob McManus. “It’s valid, but then what can we bring in here into Marshfield that won’t compete with other industry?

“I think we need to let our staff and our EDB know that because if if somebody would want to come in and build and need to put a restaurant in there. The argument is well, there’s all these other restaurants and their seats aren’t all filled up. What do we do? What if it’s a gas station that wants to come in? Well, there’s all these others. You can use that argument on any industry that comes in.”

“I agree with the mayor on it is not up to us to determine competition,” said Buttke. “I’ve said that at the start. I’m not hiding that from anybody. It’s not up to us to determine if somebody’s private outfit is going to come in and make it.”

“This hotel room has no hot tub, no restaurant, no meeting rooms,” said realtor Rita Blenker. “I work commercial. I am talking to two other franchises that have large conference rooms, big restaurants, and one of them is coming and they’re on the back burner to see what’s going to happen with this one.”

The current property has been stripped and would need to be demolished. If the deal didn’t come together, the price would be lowered from $750,000 to $600,000.

Hotel Moving Forward Without City Incentives

Liquor License, Entrance Location Hampers Potential Hotel Development

Mayor Q&A: TID #12 and the KC Hall Hotel Development Project