Fiscal Note
The proposed resolution authorizes the City of Madison to apply to the Wisconsin Department of Natural Resources (WDNR) for a Ready for Reuse Brownfields Cleanup zero-interest loan for the purpose of assisting in the remediation of contaminated soil around the View, Victoria, and Conway at the Huxley Yards property. A separate resolution will be required to authorize acceptance of the loan, amend the Economic Development Division's adopted budget to reflect the loan, and to approve the terms and conditions of a loan agreement between the City and the WDNR; as well as to approve the terms and conditions of a loan agreement between the City and Lincoln Avenue Capital Management, LLC.
Title
Authorizing the City of Madison to apply to the Wisconsin Department of Natural Resources for a Ready for Reuse Brownfields Cleanup zero-interest loan in an amount not to exceed $1,027,300 for the purpose of assisting in the remediation of contaminated soil at Huxley Yards (2007 Roth Street). (District 12)
Body
WHEREAS, Lincoln Ave Capital Management, LLC acting through its affiliates Roth Street 1, limited partnership and Roth Street II, limited partnership, and Conway at Huxley, LLC (collectively, the “Developer”) have commenced construction on a redevelopment of Huxley Yards (formerly known as the Hartmeyer site) located at 2007 Roth Street (the “Redevelopment”); and,
WHEREAS, the Developer has entered into a Contract for the Construction of Public Improvements (the “Developers Agreement”) for infrastructure improvements required for the Redevelopment as approved by RES-00697 adopted on November 7, 2023; and
WHEREAS, stormwater management under the Developers Agreement require substantial soil removal and management which, due to contamination, carries a cost of approximately $1,317,000 (the “Remediation Cost”); and,
WHEREAS, the State of Wisconsin Department of Natural Resources (WDNR) administers the Ready for Reuse loan program under which it offers zero interest loans to local governments to help clean up environmental contamination at eligible brownfield sites, which funds can then be transferred to the Developer; and,
WHEREAS, the Developer has a required financial match of about $289,700 (the “Match”); and
WHEREAS, the Developer requests that the City apply to the WDNR for funds in the amount of the Remediation Cost minus the Match which equals approximately ($1,027,300) (the “RFR Amount”); and
WHEREAS, the Developer will repay the City, who will in turn repay the WDNR; and
WHEREAS, the Ready for Reuse program only allows for 10 year repayment, but due to the tax credit investment for the Redevelopment, the Developer requires repayment over 20 years; and
WHEREAS, under this scenario, the WDNR would receive smaller repayments by the Developer through the City for the first 10 years with a balloon payment made by the City to the WDNR for the remaining balance at the end of Year 10; and
WHEREAS, the City is allowed to refinance this remaining debt on notes after ten years in accordance with Wis. Stat. §67.12; and
WHEREAS, the City has agreed in principle to support the Redevelopment by paying off this remaining balance owed to the WDNR with a balloon payment in Year 10, and then entering into a new 10 year loan agreement between the City and the Developer for this amount plus interest; and
WHEREAS, if the WDNR approves this application, a separate resolution will be required to authorize acceptance of the loan and to approve the terms and conditions of a loan agreement between the City and WDNR; as well as the terms and conditions of a loan agreement between the City and the Developer.
NOW THEREFORE BE IT RESOLVED that the Common Council authorizes the City to apply to the Wisconsin Department of Natural Resources for a Ready for Reuse Brownfields Cleanup loan in an amount not to exceed $1,027,300 for the purpose of completing environmental clean-up at Huxley Yards (2007 Roth Street); and
BE IT FURTHER RESOLVED that the Common Council authorizes City staff to negotiate the loan agreements between the City and WDNR, and between the City and Developer per the general terms outlined in this resolution; and
BE IT FINALLY RESOLVED that the Mayor and City Clerk are hereby authorized to execute and record any documents related to this transaction in a form to be approved by the City Attorney.