Whitewater, Part 1: Council receives presentation, begins discussion outlining: ‘What is a CDA?’

Editor’s note: The Whitewater Common Council recently hired Redevelopment Resources, an economic and community development consultant, to aid the city, including its manager, the city council, and the Community Development Authority (CDA), in its efforts to create a guideline under which the three entities will work to craft common goals and develop responsibilities for an economic development/CDA director. Kristin Fish-Peterson, the company’s principal, began an introductory exploration Tuesday with the city council and Thursday with the CDA. The first of a two-part story focusing on the first of the two introductory meetings follows.    

By Kim McDarison 

The City of Whitewater Common Council Tuesday received a presentation given by hired economic and community development consultant Kristin Fish-Peterson, who, after offering some introductory remarks about herself, community development authorities in general, and the Whitewater CDA, posed a series of questions developed, she said, to begin a dialogue through which a common economic development vision and policy for Whitewater might be forged and enacted. 

Introducing Fish-Peterson, Whitewater City Manager John Weidl said: “As a matter of the process of the city council working with the CDA to outline the future expectations and reporting structure for what is soon going to be the new CDA director, I’ve asked Kristin to help do a training for everyone, including people in the audience, people watching, about the basic powers of a CDA and CDA director, and then ask this council some questions that will both inform our decision-making as we then go to the CDA and try to come up with an aligned vision of how this position will report and what they are going to do.” 

Aided by slides, Fish-Peterson told those in attendance that she has operated her consulting firm for 13 years, and listed among her accomplishment, four years serving on the Redevelopment Authority (RDA) in the city of Watertown. 

During her tenure there, she helped create “from scratch” and then ran that city’s RDA, she said. 

She described the Watertown RDA as having undertaken some “serious downtown rehabilitation.” 

As part of her presentation, Fish-Peterson said she had since had the opportunity to consult with other communities, and wanted to share with council members her knowledge of state statutes and their potential application in Whitewater.  

What is a CDA? 

Fish-Peterson said state statutes define a CDA as a “separate body politic,” which, she said, could be used to perform differing activities, including blight elimination, slum clearance, urban renewal programs and projects, and housing projects. 

Citing some history, in past years, she said, communities within the state of Wisconsin had redevelopment authorities and housing authorities, and some communities had both. The state statutorily combined the two bodies, offering communities an option to form community development authorities, endowing those bodies with the powers previously held by their earlier formed counterparts.

“So Whitewater has a CDA. We tried in Watertown … using the CDA at the time, to do the redevelopment work, but because that CDA had only ever implemented public housing, they just didn’t have the leadership, and the vision, and the guts, to propose tearing down buildings and creating a public square. And it was — that was a lot of scary work for them to do, but we solved that by reverting the CDA back to a housing authority in Watertown, and then creating a new redevelopment authority. So we could undertake that big, redevelopment work in the downtown.” 

She noted that Whitewater’s CDA served a combined function of facilitating redevelopment and housing projects.  

Further defining generally a CDA, she said the board is comprised of seven residents who have sufficient ability and experience in the fields of urban renewal, community development and housing, who serve as commissioners. Typically, she said, CDAs are comprised of five residents serving at-large and two city council members.  

Powers and duties 

Describing the duties and powers of the CDA, Fish-Peterson said the body is able to prepare, carry out, acquire, lease and operate housing projects approved by council, as well as provide for the construction, reconstruction, improvement, alteration or repair of any housing project or any part of a housing project. 

The body acts as an agent of any government in connection with acquisition, construction, operation or management of a housing project or any part of a housing project, and can acquire through use of eminent domain any real property, including improvements and fixtures on the real property. 

“The CDA is acting at the direction of the governmental body and approved by the city council,” she said, adding: “The CDA may acquire property through eminent domain and make improvements on that property, so one reason a community may use a redevelopment authority or a community development authority to do this work is to shield itself, the city council, from enacting eminent domain on a property. It’s a political way to have another party deal with that — take the flaming arrows and all the public comments, and all of that stuff that would happen.”  

Additionally, she said, the CDA can own, hold, clear and improve property, to ensure or provide for the insurance of the property or operations of the authority against any risks; it can contract for the sale of, and to sell, any part or all the interest in real estate acquired, and it can invest any funds held in reserve or sinking funds, or any funds not required for immediate disbursement, in property or securities in which savings banks may legally invest funds subject to their control.” 

The body can sue and be sued, she said.  

According to Fish-Peterson, CDAs can prepare redevelopment plans and urban renewal plans and undertake and carry out redevelopment and urban renewal projects within the corporate limits of the city in which it functions; enter into any contracts; borrow money and issue bonds; execute notes, debentures, and other forms of indebtedness, and apply for and accept advances, loans, grants, contributions, and any other form of financial assistance from the city in which it functions, from the federal government, the state, county or other public body, or from any sources public or private.”  

Community use 

Communities have used CDAs to oversee planning activities for redevelopment areas, new development areas, downtowns and neighborhoods; create and operate loan funds; implement redevelopment projects; oversee development deals; construct and manage public housing, and construct and operate incubators, Fish-Peterson said.  

Who leads? 

“In many cases they are staffed with city employees who serve the organization as well as the city. The leader of the CDA or the head staff member is also an employee of the city … in Watertown, I was on contract for the first four years, but then the city hired an employee to serve the city as an employee and lead the RDA. That’s the same model that’s used in many other communities such as Wausau, Madison, Eau Claire, Fond du Lac, Green Bay and Stevens Point,” Fish-Peterson said.  

She described CDAs and RDAs as the “first stop for development approval,” adding that when incentives are involved, especially if the incentive comes through a city-owned tool such as a tax incremental financing (TIF) district, projects move to the city council for approval.

“Loan programs are run through the CDA or RDA without need for city council approval except for the original capital funding. If the entity has its own source of capital funding, they can run that without permission or approval from city council. Sometimes the city council is the source of that original funding,” she said.  

Additionally, she said, projects come before the city council because there may be expenditures involved for which the city must give approval. 

How does Whitewater want to use its CDA? 

In Whitewater, the city has used the CDA as a development agent for affordable housing, and  industrial and commercial property, and as a lender, realtor, business attraction agent, and marketer, Fish-Peterson said. 

“But I think there’s an opportunity to consider how it should continue to operate,” she said. 

Fish-Peterson identified several funding sources that have been used by the Whitewater CDA, including U.S. Department of Housing and Urban Development (HUD) Community Development Block Grants (CDBG), which, according to the HUD website, are provided on a formula bases to states, cities and counties to develop viable urban communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for low- and moderate-income persons; facade grants, which, according to the city’s website, have been made available through a program begun in 1991, and have “helped a number of downtown businesses over the years”; Capital Catalyst Fund, which, according to information provided in 2020 to area news outlets by former Economic Development Director Cathy Anderson, was funded with a Wisconsin Economic Development Corporation (WEDC) grant of $250,000; funding identified as a  Paquette Center loan fund; an HUD Urban Development Action Grant (UDAG), which provides funding to assist revitalization efforts in distressed cities and urban counties that require increased public and private investment; and holdings within the city’s business park in land and real estate. 

Said Fish-Peterson: “Currently you have a variety of programs and I’ve been studying all of your programs, your sources of funding, the levels of funding that you have in each program. You have your housing program that is largely funded by Community Development Block Grant — that’s federal funding — you have a facade fund, a capital catalyst fund, which is investment dollars into startups in the form of equity, you have a loan fund, a revolving loan fund, a UDAG fund, and then you have the business development park that the CDA operates, and you have land and real estate listed as assets on your CDA balance sheet.”  

Why serve on the CDA? 

Fish-Peterson said CDA members serve at the request of the city manager and are approved by city council. 

Those who serve on a CDA might be motivated by such factors as a desire to see change in the way the community develops, to help meet housing and other economic development needs in the community, to serve the city with specific professional talents and skills and to ensure the city is a good steward with its development incentives and land.

“It’s important to staff or appoint community development authority members that have skill sets that will help the process,” she said, listing attorneys, bankers, realtors and accountants as among those who could provide useful skills. 

Fish-Peterson next asked city council members a series of questions, which, she said could begin a discussion about the future of the CDA. 

She asked: What are the CDA’s functions currently? What are the priorities? What is the city’s charge to the CDA? Are they an independent body? Do they operate at the pleasure of the city council? Where is the line between what property the CDA owns and what the city owns? How are they funded? Do they have their own funding sources? What do you want it to be? 

“I’m familiar with some of the CDA’s functions currently, but what are the priorities? What is the city’s charge to the CDA? Do you have a direction?” she asked.  

Council discussion 

Responding to Fish-Peterson’s questions, councilman and CDA member Jim Allen said that he had served “a lot of time” on the city’s CDA, calling it “very important to the city. 

“Our CDA also manages the business park and technology park, of course you know that, and the Innovation Center, co-owned by the CDA and the university.” He described the center as “an incubator space.” 

Allen defined the CDA as “a quasi-independent organization with a dotted line to the city. 

“There are times when we need to be independent to where a developer comes in and doesn’t want to bring their projects in front of a group … worried about their project getting out. At the same time, our director works directly with the management team here at city hall to move things along and make things happen. The last seven years or so we’ve made a concerted effort in making our system streamlined, so that developers who come to town don’t feel like they were turned away — and sometimes by either side, the city or CDA — but to know that we are here to help. And that together, the city and the CDA make things happen as quickly as possible. So that’s been the goal over the last seven years, and something that we really needed to work on and streamline because the city especially was being accused of being unfriendly to, some say, outside developers, and others say local developers. So that’s just something we’ve been working on.”  

“Apparently we are equal-opportunity unfriendly. That needs to change,” Weidl said.  

Allen agreed.

Allen continued: “So is it an independent body? yes and no. That’s the best answer I can give you. Do they operate at the pleasure of the city council? Well, yes and no. I think currently half of our funding comes from profits from the CDA, half the funding comes from the city. Where’s the line between what property the CDA owns and what the city owns? That’s pretty well defined, I think. I’m sure when you talk to the CDA on Thursday … that will become very clear.” 

Said Weidl: “What I want — one of my main goals is to make sure that any toe-stepping is avoided … and we all pull in the same direction to do what needs to be done, which is to increase the growth of the city, and to do that, we’ve just got to check these boxes, answer these questions, make sure we all agree to what the answers are and then move forward.”  

“I think we cleaned up a lot of that in the last several years about if the CDA sells property, what property sale goes to the city or to the CDA coffers. That’s been clearly defined,” Allen said. 

Addressing the full council, Weidl asked if members would be comfortable with leaving the appointment of a new CDA director and the “handling of those duties” to the CDA.  

“That’s one great route to take. I just want to make sure we are clear, so it’s at the point when someone’s hired, I can be like, ‘hey, we talked, and you wanted the CDA to handle it, so I asked them to handle it,’” he said.  

Said Allen: “We (CDA) also manage our tax increment districts … this CDA here in Whitewater has its own staff. Just, right now, a part-time secretary, but, hopefully, a full-time secretary, her assistant, with that John, typically it’s been the CDA members who have chosen the CDA director along with the city manager,” Allen said, adding: “Not that that can’t change.”  

Councilwoman Brienne Brown offered ideas revolving around housing projects. 

“We have a housing crisis as many cities do, and I think we need new housing, but also there are some beautiful homes — broken teeth kind of housing — some of them do need to be torn down, and some of them need to be fixed up, and I would love to see the CDA somehow get its hands on some money that they can give in low-interest loans to homeowners so they can afford to fix up their homes. 

“I know that right now we have access to some county money, but you have to be really poor to get your hands on that money. So if you’re making $45,000 or $60,000 a year and maybe have student debt, etc., there’s no way you can get a loan to fix a roof. You have to be incredibly below poverty level essentially to do that, so I’d like to be able to see that happen, that we can get people in this community who would like to fix things up, give them some money they could pay back,” Brown said.  

Allen said he believed the city had secured some money for housing. 

Weidl said the city had $1.9 million earmarked to help alleviate the housing shortage. 

“It would totally be within the purview of the city council to turn some of those funds over to the CDA for that purpose,” he said. 

Said Allen: “So housing has been a concern for quite some time, and here’s where we really fall short within our city: people in Whitewater don’t know what we have available or what the CDA does. 

“There are loans available for people who wanted, you know, their porch is falling off their house, they can borrow that low-interest money or borrow it to never be repaid until they sell the house.” 

Councilwoman Carol McCormack asked Allen how the public was made aware of the program.  

“That’s what I’m saying, this is where we fall short,” Allen said. 

He continued: “The general public doesn’t always know this information, and that’s something that we need to get out so a lot of those things that you asked are already in place. … The banks have been helping us — we have programs for new buyers to come in and are educated before getting their loans — but we’ve got loans all over town that you don’t know about, and a lot of them we don’t know about, because they are numbered instead of named.”  

Council president and CDA member Lisa Dawsey Smith said she had a short list to share with council, and was prepared to share thoughts during the CDA meeting on Thursday. 

“As far as hiring (a CDA director), I think it’s pivotal that the CDA have some input to that, but it also needs to be someone who works with the team, who they will see more often than anyone else here (within the council) or at that body. I think it’s important that we not sit on our ($1.9 million) housing extension money any longer. We need a policy and we need that quickly. Something else that I’ve noticed, the number of regional things that I’ve attended, is that Whitewater is very poorly represented at county levels. You can go to county economic development events and there’s no-one from Whitewater there in attendance aside from the chamber director, and myself, and the city manager. 

“I would be personally interested in seeing a thoughtful review of our ordinances, whether or not they give us the nimbleness to be able to be reactive to blighted properties. I do believe there are gaps that could be addressed there. And I’d like to see a much larger focus on the bigger picture. Instead of being reactive to immediate needs, we need to be reacting to those now, as well as what’s coming in five to 10 or 20 years, because not focusing on the larger picture can keep us in second place for too long,” Dawsey Smith said. 

Joining the discussion from the podium as a member of the public, Jeff Knight, a former CDA member, talked about term limitations on the CDA. 

“I think one of the restrictions you have is that there have been turnover in staff over the years. I think it’s unfortunate, but it’s part of the world we live in. Some of the rules that you’ve got relating to the governing body are restrictive in how fast people have to turn over. I’m not here asking to go back on, but I am suggesting that the people you have on there, once they’ve gone through the process for a short while, the six-year stint, based on the complexity of what you’re doing for the city, probably should be looked at by Kristen and a recommendation back, because I do think that most of the people, by the time they are on there for four, five years, they’ve become pretty good specialists in this — it’s a complicated world,  the TIF and the economic development loans, and the functions of where it is, and if you turn that position over, you need to have a body that’s pretty learned in what is going on, so you need the documents to be there, to be available for everybody to see, but my recommendation is for Kristen to come back to the city council and CDA, and perhaps an additional length of three-year term for whoever you do appoint on there, at least you consider that,” Knight said. 

“I think our ordinances also address how long somebody who’s termed has to stay off, and that should probably be addressed, too,” Allen said. 

“I think the state statute stair-steps the turnover so that you don’t have your whole CDA leaving at one time. If somebody serves for five years, the next person serves for four, and three, and those can be renewed, but, according to statute, I can check local ordinances, too, to see,” Fish-Peterson said.  

Part 2, of this story is here: https://fortatkinsononline.com/whitewater-part-2-cda-receives-presentation-begins-discussion-outlining-what-is-a-cda/. 

A link to the Redevelopment Resources website is here: https://redevelopment-resources.com.