By Ryan Whisner
There’s been more transactions involving the Robert L. Klement Business Park on the south side of Fort Atkinson over the past three years than in the previous decade.
Tuesday night’s meeting of the Fort Atkinson City Council was just the latest one.
The council unanimously approved the repurchase of a parcel in the business park after the owner found their site plan concept did not fit within the city’s zoning ordinances.
Fort Atkinson City Manager Rebecca Houseman LeMire said in June of 2020, the city negotiated the sale of 7.8 acres of land along Janesville Avenue and Mielke Drive to Mickelson Investments LLP to accommodate the business RB Scott. The company is a specialized dealer of process equipment and wear parts for the sand and gravel, crush stone, frac sand, and recycling industries.
“Throughout the process of working with this group, it became clear that the project was not compatible with the business park covenants, the city’s zoning ordinance nor the city’s MS4 storm water discharge permit from the DNR,” LeMire said.
Specifically, Mickelson Investments did not intend to pave the yard where any heavy equipment would be stored. The city manager noted that such action is a requirement of all three of those documents.
During the negotiations, city staff attempted to assist Mickelson Investments in coming up with a viable solution including a land swap for other land within the business park or another location within the city and an introduction to the Jefferson County Economic Development Consortium and ThriveED. None of the options appealed to the owners and a request was made to sell back to the city per the covenants.
Per the Klement Business Park covenants the city has the option to repurchase the lot. As written, the purchase price shall be the price paid for the land, the value of any improvements, and any special assessments.
LeMire said there have been no improvements nor has the city levied any special assessments on the property. Mickelson Investments purchased the land for $155,820.00 in 2020. Under the covenants, the property owner is responsible for a pro-rated portion of the property taxes, so the final cost for the city is $153,246.97.
The city manager noted the repurchase was not budgeted and because the expenditure period for TID No. 6, which includes the business park is closed, there are no funds there either. LeMire proposed use of the city’s general fund balance for the purchase, which could be repaid by TID No. 6 funds in the future.
Per a recent city audit, the city’s fund balance was at more than $3.5 million or 37% of expenditures, exceeding the city’s fund balance policy.
Disappointed in the lack of development, the council members appeared to recognize the benefit of its ability to again attempt to sell the property.
“It’s unfortunate that the city wasn’t able to come to a mutually agreeable site plan but in business these things do happen from time to time,” noted council member Mason Becker. “I look at the south side and Janesville Avenue right now, with Kwik Trip building a new gas station, the redevelopment of the former Shopko location and I just think that there’s renewed focus out there. I feel confident that the city will eventually be able to resell this piece of property to somebody who will be able to do something that fits more with the intent of the business park and the community as a whole.”
Council members Bruce Johnson and Eric Schultz both agreed.
“I believe that the situation out there is evolving into a growth situation with redevelopment of the Shopko building with lots available in the front of it for smaller businesses to also come in right down the street,” Johnson said.
Schultz noted that while the city was spending money from the general fund, it is to get an asset that can be resold and hopefully recoup the costs.
Prior to the unanimous vote, council member Megan Hartwick inquired as to why the city couldn’t force the property owners to make those changes or accommodations if it is a matter of following DNR requirements and other state or local rules and ordinances.
LeMire pointed out that the city’s storm water discharge permit is based on a several factors.
“Not all communities have the same level of permit, so not all communities would have the same requirement for paving,” she said. Smaller communities who have a different permit or properties in towns throughout the state may or may not require paving of certain parking lots.
“There are certainly places that this business can be located without a paved parking lot,” LeMire said. “However, our Klement Business Park covenants from when the park was established back in 1999, it is a requirement that all parking areas and storage areas in the park be paved.” The city’s zoning ordinance requires the same.
“Were the city to attempt to hold them accountable, the company made it clear that they would not build on the lot if they were forced to pave,” the city manager said. “If the city did not repurchase this lot, then they would simply have money tied up in it until they would sell to someone else. If the city repurchases the lot which is what staff is recommending, we will be able to remarket it and hopefully resell it quickly to another business that will construct a building and have site plans in accordance with our covenants, zoning ordinance and storm water permit.”
The Robert L. Klement Business Park was developed when, during a three-year span toward the end of the 1990s, virtually no land was available for incoming industry and existing industries seeking to expand while remaining within the community. The city acquired the business park property in July 1998, establishing a tax incremental district (TID) in November 1999.
Wood Design Inc. was the first business to relocate to the business park in May 2001. After that Integrated Process Engineers and Constructors Inc. (IPEC), RateWatch, Central Coast Restaurant and the Dance Club, and Rock River Dental built in the business park.
From 2009-16, the city had an exclusive listing agreement with NAI MLG Commercial to market and sell the land in the business park. However, there were no lot sales and development had been minimal beyond an expansion of IPEC since 2008.
Over the years, the site has had some nibbles. In fact, during its search through southern Wisconsin, Fort Atkinson was a small blip on Foxconn’s radar.
In recent years, RateWatch moved downtown to the so-called Creamery Building and the Central Coast Restaurant and the Dance Club has closed and changed ownership and is now known as Riverstone, a wedding and special event site and restaurant.
For three years the city had the property listed with CBRE Inc. of Milwaukee. In 2019, the city hired Mike Herl, agent with Madison Commercial Real Estate, who had some success in filing the Creamery Building.
In addition to the Mickelson Investments land sale, owners of the Riverstone, (formally Central Coast) acquired a lot as a buffer from the industrial portion of the park.
In addition, the city currently has a pending offer to purchase Lot 11 at the corner of Mielke Drive and Commerce Parkway for development of a 17-building complex as approved by the Fort Atkinson Plan Commission. A closing date has not been set but the city remains in weekly contact with the buyer and remains confident that the project is moving forward.
Fort Atkinson Municipal Building, file photo/Kim McDarison.
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