City needs more time to pursue tax credits
By Scott Bellile
The city of New London will delay a key step in securing funding to construct a proposed mixed-use public library, bumping back the project’s timeline one year.
City officials agreed to postpone submitting an application for senior affordable housing tax credits, which would help fund the residential component of the downtown project, until December 2019.
“There were too many things heading down at one time to try to make the December [2018] deadline for the tax credit application, and everybody kind of sat back and said, ‘I think it’s all in our best interest to wait another year,’” City Administrator Kent Hager told the New London Economic Development Committee on Nov. 27.
“We’ve been working on this for a period of time now and I think it’s best that we slow down and [do it correctly],” Hager said.
This year’s deadline is Dec. 14.
Typically in the application process, the Wisconsin Housing and Economic Development Authority awards tax credits the following April to about 25 percent of applicants.
Under the new timeline, the city would learn in April 2020 whether WHEDA awards New London the tax credits, which are critical to the mixed-use development project happening.
Construction could begin in 2020, developer Randy Stadtmueller, who is overseeing this project, predicted in a memo.
The tax credits would help pay for the construction of 36 senior housing units above the library and six three-bedroom family townhouses nearby, according to a memo from Hager.
Image courtesy of Stadtmueller & Associates
As part of the tax credits application, WHEDA requires applicants to submit a market study that indicates their proposed project would be viable in their community.
The city has not conducted a market study and could not complete one in time to meet WHEDA’s Dec. 14 timeline, Hager said.
Another step that has yet to be initiated is the city establishing a tax incremental financing district for the project.
A TIF district is a financing option in which a municipality reallocates property tax revenues from within a defined geographical boundary toward a development project for up to 27 years. If created, the TIF would generate an estimated $7 million in tax revenue in its 27-year life.
The city has not formed a joint review board. This committee, comprised of representatives from four local taxing jurisdictions, would vote on whether to create a TIF district.
Establishing the TIF district would not take long, Mayor Gary Henke said.
In October, the New London City Council voted to try to secure financing for the mixed-use development project, which would be built on the former Wolf River Lumber property on Wolf River Avenue and possibly extend as far as the 200 block of South Pearl Street.
The preliminary scope of the project also includes 32 residential townhouses and two six-unit condominium buildings, all of which would be market-rate housing.
A 12,000-square foot commercial building is also proposed.
The city council has not voted to construct the mixed-use development. Whether the project ultimately happens depends on several successful outcomes, including the senior affordable housing tax credits, a favorable market study and New London Public Library’s fundraiser.
The library plans to work on raising $2.5 million in private donations toward the estimated $4 million mixed-use library project over the next year.
New London Public Library and Museum Board members have said that if the library is built, the library will vacate its current building at 406 S. Pearl St. and the public museum will take over the rest of the building.
New London Economic Development Committee Chairman David Morack said Stadtmueller will discuss the delay further at the committee’s next meeting, which is set for Jan. 29 at 4:30 p.m. at the New London Municipal Building. The meeting is open to the public.