Committee of the Whole Meets for Annual Retreat

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Cameron Bren

MIDDLETON–The City of Middleton Committee of the Whole (COW), made up of the Common Council and Plan Commission, met for its annual retreat Jan. 30 to review the city’s ongoing major projects, TIF finance model, state of the real estate market and planning goals and strategies. 

Planning and Zoning Administrator Mark Opitz said work on the airport master plan is resuming and will now include an environmental setting chapter which will review ways to reduce aircraft noise and improve air quality for residents living nearby. The city will survey city and town residents to review feedback. Once that is complete an open house can be scheduled, Opitz said. The goal is to complete the master plan by summer.

The North Mendota Trail long Century Avenue has remaining work, Opitz said, but he is confident the project can be completed within the $1.4 million budget. Once completed the trail will extend from Branch Street to the Highland Way traffic signals.

Opitz said the path will tie into the trail being constructed by Dane County around Lake Mendota. A section is needed to connect from the trail from Highland Way to Mendota County Park at an estimated cost of $1 million, but Opitz said the county is likely to partner with the city in that cost.  

“It's going to be a fabulous trail, obviously a very regionally significant trail so we think county funding is something that we can and should pursue as a city to have assistance with this project because the construction will be probably a million dollars,” Opitz said.

Director of Planning and Community Development Abby Attoun reviewed the progress on the capital campaign for Stone Horse Green, the public plaza planned for downtown at the west end of Hubbard Avenue.

Attoun said the fundraiser who was hired had their contract put on hold during the COVID-19 pandemic but now they are coming back to start campaign. 

She reviewed the design which will be mostly open space with picnic tables. The tables can be moved to the street for larger events. There will be a small facility with bathrooms and a band shell.

There are two components of the capital campaign, Attoun said. For larger donors there are naming rights opportunities including naming the band shell building for $250,000, the fire kettle for $25,000, the solar array for $20,000, barn lights sculpture for $100,000, stone horses for $25,000 each and fireplace for $15,000. Smaller donors can select a Middleton historical image to be displayed with their name on the “stone gallery wall.”

Attoun said the hope is to complete fundraising over 2021 and begin construction as early as possible in 2022 to open to the public June of the same year.

Regarding the community campus plan, Attoun said not much has changed since it was last discussed by the COW on Jan. 25, 2020. She reviewed some of the divergent opinions at the time.

Attoun recommends the city gather additional community feedback and extend the public process led by city staff to review concepts from a health & equity perspective. She also asked for a commitment from elected officials to lead at least one outreach meeting in their respective council districts and for the Mayor in a place of his choosing.

Finance director Bill Burns reviewed the state of the city’s tax incremental financing (TIF) districts and their effects on taxes in the future.

Burns said Middleton’s TIF district (TID) #3 is one of the most successful in the state. It has generated $975 million in value since 1993, $340 million was subtracted from the district prior to 2020, $130 million net subtraction was made in 2020.

“When a TIF district is created you draw an area on the map and the area within that boundary you determine the base value for all the taxable property within that area and that is set and the taxes continue to be collected for the taxing jurisdictions which include the city, school district, technical college and the county. They continue to receive their property taxes on that base level of value,” Burns explained. “Then what TIF does is for any new value that's created over that base level which is called the value increment 100 percent of the taxes on that growth in value come to the city and they stay within the TIF district fund so they're not available for general city budget or for school district purposes. They're used within the TID until it closes and then all of that value is available for all the taxing jurisdictions.”

Burns said TIF has been instrumental in Middleton’s economic development.

“In Wisconsin TIF is one of the primary economic development tools and certainly the most powerful tool that’s available to the City of Middleton and all cities in Wisconsin,” Burns said.

Burns pointed out that state law limits cities from creating new or expanding TIF districts if the total value of the city’s TIF districts are more than 12 percent of the total value of the city. The City of Middleton has 17.6 percent of its total value in TIF districts.

District #3 Alder Katy Nelson asked if there was a limit to adding or subtracting value from a TIF district. Burns said generally a TID is limited to four amendments. Middleton’s TID#3 was given a special expedition from the state legislature to extend its life by 10 years and given one additional amendment with one now remaining. 

Burns said he recently worked with the League of Municipalities for a legislative change to adjust the levy limit with subtraction which will be helpful in the next budget cycle.

Consultants Deana Porter and Craig Stanley from Broadwing Advisors reviewed their findings related to the real estate market. 

Beginning with the office space market, Stanley said vacancy has been about 10 percent or below since 2016 but jumped up to 11.2 percent recently through pandemic.

The drop in demand amounts to a 60 percent drop in transactional volume or negative 159,000 square feet, Stanley said. That is primarily because of pandemic and working from home, he said.

“We range between 300,000 and 400,000 square feet of new product or new absorption annually when we've had a very good, healthy year,” Stanley said. “Just in three quarters we've seen a significant drop and we expect that drop to continue.”

Stanley said most corporations are looking to downsize their office footprint and those changes are likely to last as office workers adapt and rely more on technology. 

Stanley said the city should expect a tax impact with 28 percent of all office and industrial buildings. He said there could be a flat assessment or dip.

Porter points out that generally the west side does better than east side for office.

The industrial market is healthy, and supply is low. Typically, anything that comes on the market will be taken quickly, Stanley said. The new absorption is 933,000 square feet, while Middleton specifically is 46,800 square feet.

Stanley said the issue is limited opportunities for growth within Middleton.

Life science market remains strong, while also dealing with limited lab space available and limited land to develop, Stanley said but that is not a huge issue because the overall market is relatively small. 

There is no empty lab space available today, Stanley said. Any new lab space must be built or converted and that comes with a high cost.

Retail has been challenged but doing better locally than nationally. Stanley said he expects vacancies to continue increasing for a while. There has been growth in the restaurant side. Overall retail will rise as it adapts, Stanley added. 

The vacancy for multifamily homes in Middleton is 1.72 percent compared to overall area vacancy of 3.87 percent.

Porter congratulated the city on extending its affordable housing goal by 295 units, but she said for single family homes there is really nothing less than $400,000.

Plan Commission member Kurt Paulsen asked about converting office space to multifamily housing. Stanley said thinking about that now is good since office space demand will probably continue to decrease.

Paulsen said demand for industrial space must be protected from intrusion by commercial interests for the lower cost per square foot.

District 8 Alder Mark Sullivan asked what is pushing vacancy rates up. Stanley said office companies are running virtually and moving to lease space as needed.

“As leases roll, tenants will continue to give back space,” Stanley said. 

Mayor Gurdip Brar asked what opportunities the city has to expand on life sciences. Stanley said they will mostly have to look at infill areas.

City Administrator Mike Davis noted pharmaceutical company Lucigen is considering a potential expansion in the Tribeca property as well as another biotech company. Davis said Middleton could soon have one or both.

Attoun reviewed the latest modifications to the comprehensive plan following the public hearing at the Plan Commission on Jan. 12.

Another council hearing will be held for the ordinance first reading on Feb. 16. Final approval with a second reading will be on March 2.

Attoun said the city will have to begin updating ordinances to align with the adopted comprehensive plan including official mapping ordinances, local subdivision ordinances, city or village zoning ordinances. 

“In terms of public participation for the comprehensive plan we've had a kick-off meeting, we've held 17 public input sessions, 28 plan commission work sessions, 22 committee and commission sessions, we had three social media polls, a resident survey a business survey and to date we've held two formal public hearings,” Attoun said.

Davis led the COW in a brainstorming session for developing a strategic plan for the city. Davis, who is retiring next year, said he would like to spend time developing the plan to have in place for his predecessor. 

He covered a range of issues the city could address in a strategic plan and asked the COW for feedback.

Council president Dan Ramsey asked if the strategic plan can be broad enough to bring various goals together like more equitable city services and affordable housing. Davis said that would be the goal. 

District #6 alder Susan West said she would like the strategic plan to review the need for city staff.

Plan Commission member Jen Murray told the group she supports the strategic plan, and it would be helpful developing the community campus plan. 

Brar said it has been an important goal of his to make the city committees and staff more diverse and would like to tie that into a strategic plan as well as ensuring library access and other city resources are available to all residen

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