Developers encounter problems
By Scott Bellile
The futures are uncertain for two private-sector projects that would pump dollars into the local economy.
The construction projects, which are unrelated, have encountered costly obstacles. The companies involved must determine whether it’s worth the money to proceed.
One project is a revival of a defunct railroad spur. Granite Valley Forest Products on County Highway S wants to implement rail access. The Wisconsin Department of Transportation awarded the timber processing plant a $384,000 grant last January. Granite Valley was set to begin work. Then this fall, Canadian National Railway Company ordered Granite Valley to perform additional upgrades to the track to meet current standards.
The other project isn’t officially a go, but Partridge Estates is considering adding a second apartment complex on Partridge Drive. However, a recent site evaluation determined the sanitary sewer main that would serve this proposed complex must be elevated.
The city of New London owns a rail spur that Granite Valley would use to transport lumber. New London has offered to let Granite Valley reactivate it as long as the company pays for the upgrades. The city is paying nothing but has devoted time to helping Granite Valley.
Due to the upgrades Canadian National demands, Granite Valley’s original $100,000 bill could go up 20 to 40 percent.
“With what the [Canadian National] railroad has insisted on them changing or whatever, it’s basically up to them if they want to spend the money or don’t they,” New London Mayor Gary Henke told the Parks and Recreation Committee Dec. 6.
If the project falls through, the city will remove the railroad, sell the steel and use the money to expand the Newton Blackmour trail to Pfeifer Park. In other words, if the railroad doesn’t serve local industry, then it will become a trail and benefit tourism.
Granite Valley is reaching out to other local industries to see if any would use the rail and split the costs.
If Granite Valley rehabilitates the railroad, it will build a sawmill on-site.
At a Dec. 7 Finance and Personnel Committee meeting, committee member and Third District Alderman Mike Barrington asked what the city would gain in taxable value if the sawmill were built.
Henke said a new sawmill would have a “pretty minimal” property tax value compared to a normal industrial building. The jobs created inside the sawmill would matter more, he said.
“It would be like having two new houses in town here, so there’s not that much taxable value,” Henke said. “The jobs, yeah, are great to have. It’d be nice to have extra jobs here.”
Partridge Estates has expressed interest in constructing three more 12-unit apartment buildings west of the first three it built on Partridge Drive last year.
The problem is if phase two of Partridge Estates becomes a reality, the sewer main that would serve the proposed apartments is too low. The developer would have to raise it.
At a Dec. 6 Board of Public Works meeting, New London Public Works Director Jeff Bodoh said the whole process of lifting the land could exceed $300,000.
Because the residents of Partridge Estates contribute to the local economy, New London City Administrator Kent Hager recommended the city offer $30,000 toward the lift station to help the developer. The New London City Council approved Hager’s recommendation on Dec. 13.
“We still don’t know if they’re going to follow through with this phase two yet or not,” Hager told the New London Board of Public Works during a discussion Dec. 5. “They’ve basically called a halt to all of their current developments pending additional evaluation. So we’re trying to throw a little carrot out there in front of them and say we’ll do the road and do the lift station and see if that is attractive enough to get them to do a second phase.”
The roadwork Hager mentioned is a $130,000 project to expand Partridge Drive 400 feet west and extend the water and sewer. The city council approved this in June.
Combining the roadwork and lift station, the city will offer the developer up to $160,000 in incentives.
At a Nov. 29 New London Economic Development Committee meeting, Hager justified the expenses by saying phase one received no financial assistance from the city.
Additionally, he said Partridge Estates’s existing apartments generate around $16,600 a year in tax revenue. Building on would double that to $33,000.
The $33,000 a year from phases one and two would pay off the city’s assistance in 4.8 years. If taking into account just the taxes generated on the phase two structure, it would take nine years.
New London Area Chamber of Commerce Executive Director Laurie Shaw said the occupants of the new apartments would inject money into the local economy.
“It isn’t just the taxable income the city gets, right,” Henke said in agreement.
Although these projects could fall by the wayside if their respective companies can’t afford them, Henke offered a glimmer of hope to residents concerned about New London’s economic development at the Dec. 13 city council meeting.
“We’ve been very concerned and working hard towards economic development, and I’ve actually been in discussions with a couple of local industries in the past few days here thinking of expanding,” Henke said. “So things may be looking up. We may be busy again.”