Community Development Committee - Regular Meeting

Good afternoon, I'd like to call the Wednesday, July 28th, 2026 edition of the Community Development Committee to order. Please join me in saying the Pledge of Allegiance. Thank you for that. Roll call of membership, starting from my left.

Barrett-Meltzer, District 2.

Bia Jones, District 10.

Josh Lambert, District 1.

And let the record show that Alder Stancil-Martin and Alder Smith are excused from this meeting. Moving into number four, approval of the minutes from the previous meeting. Due to the minutes on May 27th, my plan was to abstain from this. If I do abstain from the approval, we do not have quorum, so we will not be voting on this. It will hold until the next meeting. Thank you for your understanding. All right, public hearings and appearances. We have four individuals signed up to speak tonight. I'm gonna do my quick spiel for you. We reserve time at each of our meetings for members from the public to speak on items that appear on the agenda. Public participation is limited to a maximum of five minutes per person. I'd ask that you keep your comments concise within the time limit and mindful of the comments that have been made before. And I will let you know when you have 30 minutes remaining. 30 seconds. You probably would want 30 minutes, that'd be great.

You got the right chair. 30 seconds, thank you.

All right, so when you come up to the microphone, I don't know if it's on. We'll make sure of that. State your name and your address for the record. So first we have Ian Martin from organization L&L. This is from here.

I missed it.

What's happening?

So I apologize. the sign in sheet that we have for community development committees, just for the minutes. So we know who was here. So some folks who are here may want to speak and others may just be here. Okay. So I would suggest just asking anyone who wants to speak to approach. I am just crushing that meeting today. That's my fault for not explaining.

Who wants to speak? I got three others here. Wonderful. I recognize your face.

Remind me of your name. Hi, I'm John Vander Kolk. Wonderful. And I'm here today to speak against the TID and development plan for the Thrivent properties, whatever it is now named. Because part of what my question is, why does the city need to issue an $11 million bond for public infrastructure in exchange for Thrivent to give back a letter of credit? I mean, if they've got enough money for the letter of credit, they've got enough money, they don't need a bond from the city. and then a pay-as-you-go incentive, again, a large amount of money, 14 million at 6% interest. It seems Thrivent is doing this along with some incentives or bribes, if you will, of the $1 fire station to get a TID. Why do they so badly need this? What is Thrivent? It is a not-for-profit Fortune 500 company that had 10 billion in revenue last year, 715 million in net income. So they've got 18 billion surplus on their books. So why do they need a TID to develop blank, empty farmland that they own outright? If this was something where we were looking to redevelop something down in the flats or an old industrial or retail center, I could totally see that. But this is virgin ground to make. Part of what it is too is if you look at the north side, you've had private development all throughout decades that I would argue has turned the North Side into the attractive place that is allowing Thrivent to cash in now with this development. Because they've had this farm land forever. I mean, I've been here since 2007 and it's always been there. So now they're cashing in, why? You see all this growth on the north side driven by private developers that have not been subsidized in any way by public monies, be it a TID or moving money around for the board for loans. Last point I would make is, I do not feel this meets the but-for test around the TID financing. Wisconsin law requires demonstrating that development would not occur but for use of the TID. I'm sorry, Thrivent's going to do this. They want to cash in on that investment. Now is the best time to do it with housing costs. As high as they are, they're going to make a lot of money. You know, the city's like, ooh, we're going to get tax base, and they're thinking about dropping 2,000 units in that side on the north side. We haven't given any thought to what's happening next door in Little Chute and the areas around with all the other building of housing around there putting in the area, and no thought to the infrastructure in there with what's going on right now with the 41 rebuild. and all the traffic in there that's gonna do. So I think we should just not do a TID and really think about this. Why does a company that have all this money throwing all these incentives at the city to get some things going on? It just doesn't feel like it's needed. So I mean, it's not a question or not that this development should happen. It should, but it should happen free of public money or public tax incentives. Thanks.

All right, I have two more names on here, either one looking to speak. And remind me of your name.

Eric Cernjar. Eric, wonderful, thank you. With Greater Fox Cities Habitat for Humanity. I would just say generally, the intent for this land to be mixed income, you know, a little bit higher density, some home ownership opportunities, some rental, some market rate and some above market rate homes and generally a mixed neighborhood I think is good for the community and it's good for those homeowners and this presents a lot of opportunities. Sometimes I'm the advocacy guy, sometimes I'm the marketing guy, and I'm always the data guy. So there's a few things from that perspective that jumped out to me that are just kind of underscoring the state of the state that I think you may already know, but you may not, that are worth sharing. And it kind of explained why we are where we are. First and foremost, back in the 1940s, it was common to build sub-1400 square foot homes. That was the standard. Around 80% of homes built around that time were around that size. There's obviously a relationship between square footage and ultimate price tag to homeowner. That 80% of homes that used to be around that is about 8% now as of 2024. As habitat, what we're seeing, we're building 1200 square foot homes. They were appraising for $165,000 in a five year period. Those same homes, the exact same home is appraising for $300,000. So we're seeing this and we're building some of the most modest homes you can build in our community. The average homeowner is now 40 years old across the country. If you think about what was the experience for your parents or grandparents, things have changed dramatically, and there's clearly a need for affordable, reasonable units that are under $300,000, if at all possible. And also speaking from our experience, I've only been at Habitat for about five years, and I would say the line for our services is about 250% increase in that time period, and that's The need is there. This work is relevant, needed. I just want to say thanks for what you're doing.

Thank you. And we have one more if you're interested. All right, if that's it, we'll go ahead and close public participation. And we can move on to action items. Our first action item is number 260867. Request to approve the development agreement with Thrivant Financial for Lutherans and North Meadows Investment, LTD, for a mixed-use development generally located north of Interstate 41, east of North Mead Street, west of North Ballard Road, and south of Edgewood Drive in proposed tax increment financing district number 14, associated with special resolution item 26-0731, and Action Item 26-0586, City Plan Commission, which is Consolidated Action Item 26-0737 that was held at the June 3rd, 2026 Council Meeting. Do I have a motion to get the conversation started?

Move to approve.

Second. Wonderful. And with that, I will look over to staff. Director Homan, District 1. Thank you. Zoom on.

I now see that there's four people. I apologize, I couldn't see them. But we're good. And the people on Zoom can hear us, right? So we're good. OK. You can all hear us? There we go. All right, so what you have before you is a development agreement that is proposed between the City of Appleton, Thrivant Financial for Lutherans, and North Meadows Investments LTD. I do want to call to everyone's attention I did hand out Exhibit G. Exhibit G came together very early this morning. It did not make it in the packet just due to vacation schedules of folks who needed to prepare and review it. It is not replacing anything. This is Exhibit G that is just being put in there, but everything else in the agreement that was included in your packet is exactly the same. I'll get into what Exhibit G is a little bit later in my presentation. So this development deal that we negotiated between the city and the Thrive and Development team is really infrastructure driven. The total infrastructure costs, if you take a look at the sources and uses section of Exhibit G, that's where it gets into the total costs for hard costs for infrastructure, estimated just shy of 45 million. And then pre-development costs, that's typically like engineering, design, legal work, nearly 10 million. So what we've negotiated is for the public components of the infrastructure, the city is proposing to borrow $11 million. That borrowing would only be on a reimbursement basis. So the developer would construct the infrastructure they would do draw requests. We would reimburse those draw requests only after our engineering team has signed off on those components of work. And then that $11 million debt service of city borrowing would be secured in a variety of manners. So we've built in multiple layers of security to secure the city's debt. First and foremost, um, any TID increment that is created, um, if the TID is created, um, first goes to service the city's debt payments. If the TID increment is not enough to service our debt payments, the developer has agreed to make a shortfall payment. If for some reason a shortfall payment isn't made, the developer would be giving us an $11 million irrevocable letter of credit, which is basically the right for us to draw on that if and when that would be necessary. In addition to that, we also have the remedy of the right to special assess any properties, which is kind of like another layer of protection So in addition to the $11 million in city borrowing, the city would be supporting $14 million in pay goal or municipal revenue obligation at 6% to the developer. That would not be paid out until the city reaches a point where we're servicing our debt. We also make sure that there's a look back built in. So that exhibit G that I handed out, that is a spreadsheet that shows how when we get to 10 years out in the development agreement, how we would calculate the look back. And if they hit what's called an internal rate of return of 15 or higher, there's provisions where their development incentive from that point forward would be reduced. Okay. So that's what exhibit G does. It creates a methodology for taking their actual costs over time and calculating, have you earned more? than what was necessary to justify the but for, and if so, we're reducing what we're ultimately paying you out. Lastly, I would like to, we'll get into the details of the fire station option to purchase later on the agenda, but I would like to say the city during negotiations were the ones that initiated the request for fire station land. We negotiated very hard to get the best deal for the city and the best site for the city.

And we are pleased to say that at the end of negotiations, we were able to secure a $1 right to purchase up to 3.5 acres of land for a future fire station.

The details of which are further laid out in the option to purchase agreement later on this agenda. I do have, um, Greg Johnson from Eller sitting next to me. They are our municipal advisor that we have brought on to advise us throughout this process in terms of doing all the cashflow analysis, the estimates, um, Greg's the one who anticipated that phase one, um, once built out would generate 200 million in assessed value. Um, And also, if you look at the full TID plan, he did all the phase two estimates and all the other assumptions that were put into it. If there are questions from the committee in terms of the but-for analysis, Greg can most thoughtfully explain the process that we went through to make that determination.

Okay. Questions from the committee? Alder Meltzer?

I would be interested in Mr. Johnson's explanation of the but-for process.

Thank you. I'll start, and my colleague Shane Rutlang is also on Zoom. He can add comments as well. So as was mentioned, really the but-for requirement for this proposed TID district, which this development agreement is part of, really was satisfied in two separate ways. So first is the infrastructure component that is necessary for that area to develop. There's a significant amount of infrastructure that is necessary for that 500 acres to be built out as master plan by this single developer over time, and that's an impediment in terms of attracting investment capital and getting the appropriate rate of return for the project to be profitable from a development standpoint. So the infrastructure and lack of it satisfies the but-for test as required by state law. And then the second aspect that we looked at is the developer submitted a detailed pro forma. We evaluated their sources and uses, and we looked at their projected rates of return based on TIF assistance and without TIF assistance. And as was mentioned, the development agreement has a provision for the look-back that if the internal rate of return would exceed 15% at some point in the future, that is what we've established as a reasonable threshold for the developer to attract the appropriate return for the project to proceed, that TIF incentive would be reduced over time. That's kind of a high-level summary, but I'll allow my colleague Shane Wobleg to expand further on the developer pro forma of USEC's fit.

All right. You said Shane? Yes. And I only see Eric.

This is Shane. Can you hear me?

Yes. Wonderful. Thank you.

Great. So Shane Redling with Ellers. I work closely with Greg and do a lot of the detailed analysis on pro formas for projects like this across the state. And as Greg mentioned, we take the developers' sources and uses and operating pro forma, so the land that they're selling, all the costs that they expend and all the revenues that they intend to take in or estimate to take in on the land sales. and put that into a model. And frankly, it's a pretty complicated model for this multi-phase, multi-use project. And so we've spent a considerable amount of time analyzing the but-for for the project. And I can say that 15% internal rate of return is pretty standard for projects like this across the state of Wisconsin. Having a look back in there provides additional safeguards for the city, such that, you know, at the time of the look back we take a look at the actual costs that have been expended the actual revenues that they received. And we project out into the future what they will receive in the future if the land sales aren't complete by then we do the math. and then reduce the MRO principle if there is a threshold that's exceeded. Again, as Greg said, this is a $63 million project on the first phase, and so it's substantial. While the business, the company Thrivent may have a lot of assets, you know, the Companies make money by investing money in good ways, and they'll seek capital and are working with a developer that wants to see a return on their time, money, efforts, and profits as well. And so that's one of the roles that we LRs provide to communities across the state is really to take a look at these things to make sure that the but-for is truly met and that the investment returns are actually in line with what we're seeing across other projects and similar communities.

Thank you. Additional questions from the committee? Any questions from our other alders? Alder Hartzheim, let me turn that. There you go, thank you.

Thank you, Chair. This isn't a question as much as a statement, but the but-for calculations are complicated because there's a lot of ways to work around. Think in your hearts about whether the but-for makes any sense.

All right.

Is my understanding that the kind of pro, the base pro forma in Exhibit G has a 7.9% internal rate of return. Is that just kind of the base pro forma and then looking into the look back adjustment, is that like a best case scenario? I'm just curious, is that 7.9% actually what we're anticipating the rate of return looking like based upon that initial, the numbers up top there?

Shane, I'm gonna turn it to you. Go ahead.

Thank you. Thank you, Madam Chair, elders. Yes, the... the base performance is that 77.9%. If things go exactly as projected, that's the internal rate of return that they would see over the life of the project. And so what we do in that second half of that table, that spreadsheet, that PDF that you have is, plus up the revenues to illustrate what happens if the look back is exceeded so that we can show how the math works. Because look back calculation is relatively complicated. And if it's just described in words in the development agreement, then it's really hard to go back in five or 10 years and look at the words and see how the math works. And so that's why we illustrate it like that in an exhibit. And so in this exhibit, I've just increased the land sale revenues, but you could achieve a different internal rate of return a number of different ways. You could have less debt, which is part of the calculation. You could have more revenue earlier, which is also part of the calculation. If you get more revenue, more land sales earlier, your internal rate of return will increase versus if you have those sales later in time, later in the life of the TID, for example. And so there's lots of things that can move the internal rate of return on and that's 1 of the good things about internal rate of return is it takes all that into account. And then makes it into a simple number that actually most people can understand internal rate of return is very similar to the return on a CD. It's similar to the return that you'll see on your 401k account. If you have 1. It's the annualized rate of return that's compounded based on your investment. In this case, there's $21 million-ish in equity that's going into the project. Again, if there's more or less actual equity that's invested, internal rate of return will reflect that and bake that into the number that's calculated. Thank you.

And just to make sure, and I'm seeing this, but I just want to confirm, this is taking into account if we do approve the TIF here. So the expectation would be there would be a lower rate of return if there wasn't the likely, or wasn't the potential TID or TIF district that we're discussing today.

Correct.

So that kind of reflects that opportunity or the possibility consideration of for the but for right because there's kind of a base amount that a Investor might be expecting to return rate of return for that and given the numbers here without that TIF or TID the rate of return would probably be lower so that the Investment would not be made and some other pathway would be pursued for the land Yes

Any final questions, concerns?

All right, with that being said, let's go ahead and vote. All those in favor, signify by saying aye. Aye. Chair votes aye. Any, that passes 3-0. Thank you very much. Why do I always forget that word?

Objections or abstentions.

Objections, I have it written down, my goodness.

Wonderful. We'll move on to our next item. Item number 26-0890. Request to approve the second amendment to the reimbursement agreement with North Meadows Investment LTD, Thrivant Reimbursement Agreement, to include an additional deposit of $395,500 for a total of escrow deposit fee ceiling of $638.75. Do I have a motion? Move to approve.

Second so this is the second amendment to the cost reimbursement agreement this particular request came about when a need was identified for the ultimate design that was needed for the reconstruction of evergreen drive in ballard road intersection some additional land was needed just east of the intersection adjacent to where the wisdom park and ride was and and it was determined in conversations with our public works director, Laura Youngworth, and the design team that it's actually more cost advantageous for a municipality to acquire land directly from WisDOT than for the developer to do that. Hence, the arrangement where the land is being acquired directly by the city, however, at the developer's expense, 100% of their expense. The land that's being acquired will ultimately be added to the public right-of-way which is comprised of city right-of-way as well as county right-of-way. So this really just ensures that that land acquisition can occur at no final expense to the city, but to the city's benefit.

Questions from the committee? Alder Hartson, turn that on. Go ahead.

Thank you, Chair. At the Finance Committee on Monday, I voted against a very similar piece to this same puzzle. Not because I don't want to assist in creating the appropriate right-of-ways for this development, but because I'm concerned that it is completely contingent upon the TID, and I am uncomfortable with that to the extreme. This could be executed later on, post-discussion of the TID, but it was brought forward at the same time. That is both good and bad. Good because we get to talk about the whole pie next Wednesday. but bad because recommendations for approval on all of these items, one after another, makes everybody go, well, the handwriting's on the wall. I'll vote for a TID. So I'm very, very uncomfortable with this, and I would prefer that this be voted down at this time or at the very least held. Thank you.

Any follow-up on that? Dr. Holman?

The only concern I would have if the committee did determine that you wanted to delay it is construction is tentatively planned to start in September and getting the acquisition process underway so that the timing of infrastructure installation can occur as planned would be advantageous. However, it's ultimately the committee's decision as to what you choose to do. I would recommend you proceed as presented, but I respect the will of the committee.

Further questions or follow up from the committee?

Chair, if I may.

Yes.

I'd just like to make clear that the suggestion that the council or committees being painted into a corner ignores the fact that there have been multiple discussions in both open and closed session regarding this project and process for many, many, many months with full transparency from us about the direction of the project, where we're heading, what the intentions are, And so I would just like to say, we've made every effort to be fully transparent about all of the component parts of this project and what will be necessary to make it happen. And so the discussion about, well, this, puts us in a position where we're going to be forced or resigned to take a particular vote, I think this counts the fact that there have been many decisions that have been made by this body and the Common Council along the way with the understanding that this is the direction of the project.

Thank you, Mayor. All right, with that, let's go ahead and vote. All those in favor, signify by saying aye. Aye.

Chair votes aye.

Any opposed? Any abstentions? Motion carries 3-0. We will move on to item number 260891, request to approve the option agreement with North Meadows Investment Limited for vacant property located near the northeast corner of Future Evergreen Drive and Meade Street for a proposed future north side fire station site at a purchase of $1.

Do I have a motion?

Move to approve. Second.

All right.

And Director Holman. So the option agreement lays out the particulars of when and how we would be able to exercise our right to acquire up to 3.5 acres of land comprised of portions of lot one and three of the proposed Wild and Portfolio Park plat. If you take a look at the last page of the option agreement, that's an exhibit of a hypothetical fire station parcel that could be acquired. The need for a fire station in this approximate location was identified through a multi-departmental analysis involving the fire department parks and recreation our planning team and then a lot of data and analytics of fire response times and future growth patterns with our gis team um if there's any questions with re relation to the benefits of this particular general site we do have chief hansen here However, what's before you today is an option to purchase for $1. If this is approved, then our teams would work collaboratively internally to figure out what we believe is most advantageous for geometry and then work with the developer to make sure it is in alignment with growth potential for private development around the city finalize that lot geometry and then take it through a certified survey process that would ultimately come for future action through city plan commission and council. So what's before you today is an option to purchase. And then sometime between now and the five-year deadline, we would finalize that purchase and details.

Many questions. Alder Hertzheim, you are still on.

Thank you, Chair. First question, is there a contingency anywhere in this option to purchase agreement? I did not see any. Is this contingent upon approvals of all the other private information on our agenda? And secondly, is there not already another piece of property that is city-owned that's already been identified as a potential new fire station construction?

Director Holman?

So I'm going to start and if there's anything cheap Hansen can add we had previously identified a portion of veterans Memorial Park kind of central South central adjacent County highway double O as a potential location for a future fire station some preliminary planning and analysis had been done there. We've determined that that particular parcel compared to this parcel in terms of drive times and transportation logistics and ability to respond to the Northwest part of the city, which is where the growth and the greatest need is. And I don't want to speak for the fire chief. This is significantly more advantageous than the spot on Northland. And then it would free up that land in Northland for other future public needs that may arise in the future.

Did you want to add anything, Chief Hanson? What microphone are you on, Chief Hansen? Go ahead.

Thank you, Chair. The land that we had on Northland Avenue, that was for fire station number four. We were looking to relocate that fire station, which was Uh, aging and, uh, way too small for, you know, the needs of of the of the fire department. Uh, when the thriving development, uh, discussions began, we realized that, uh. The increased in residential, um, and population on the north side, along with several other developments on the north side. are actually moving towards us needing another staffed fire station. So putting Station 4 on Northland would not be a good move. That station may need to be relocated in the future as we look at the needs of the city. But we are looking at this property as being an additional fire station, Station 7, that would be staffed to help

take care of responses on that north side thank you then my other question in regards to contingencies dr homan so the option to purchase is related to a provision that's within the development agreement that was just recommended for approval i would presume that if the common council didn't approve the development agreement they wouldn't this is related like then the other party wouldn't execute this. I would defer to our legal to determine if my interpretation is correct, but...

Largely, at least my understanding of it, but I'd have to do... Oh, Director Three? Keep it closer. Sorry. My understanding is that that's largely correct, but I'm not really prepared to say that 100% that that would be the case.

I would say for chair, if I may.

Absolutely.

Thank you. If the development agreement doesn't go through, even if this option were in place, it would be absurd for the city to pursue this land under the terms of this contingent offer. given it's connected to the broader redevelopment project. Furthermore, part of the necessity of an additional fire station on the north side is driven by the development activity and density that this project would deliver as presented. So we can get a legal analysis, but I would, my own perspective would never, pursue this agreement, this contention offered a purchase if the broader development agreement didn't go through.

Alder Hartzheim.

Thank you, Chair. I respect that. However, I do not believe that without the development agreement or the TID, that development will not occur in that area. So the city would still need a fire station in that area, presumably.

Thank you. Any follow-up questions again from the committee?

All right, let's go ahead and vote. All those in favor, signify by saying aye. Aye. Any opposed? Any abstentions? That passes 3-0. Next, we'll move on to information items. Item number 260869, inspection division permit summary reports ending 5-31-26 and 6-30-26. Any questions? Alder Hartside?

Thank you, Chair. May I direct to Director Homan, please?

Absolutely. Thank you. Director Homan, between the May and the June, there's a significant change in, and I apologize because I can't get the other one up right now, but there's a significant change to the building It looks like there's a deep increase in 2026 in June as opposed to the May. Is that just...

So are you referencing going from total receipt of 173,098 to... It just showed up on my computer, so yes. 237,426.

Well, essentially going to the negative 8.67% in May year to date, as opposed to positive 9.87% increase in June.

I would have to dig into what caused that, but oftentimes one or two large commercial projects can swing the building permit revenue pretty quickly within a month.

Okay, thank you. I'm happy to see the increase, but it was like a significant change from adding one month to the report.

Yeah, so the commercial building permits in particular, those are the ones where one or two big ones come in and we can go from being, below average revenue to exceeding it by a significant amount. If you'd want to know what particular project may have caused that, I'd be happy to follow up. Thank you. Yep.

All right. With that, we will move on to number eight. Can I get a motion to adjourn?

Move to adjourn.

Second. All those in favor, signify by saying aye. Aye. That is 3-0. We are adjourned. Thank you.

Thank you all.