Last evening, the Village of Pleasant Prairie entered a Developers Agreement with Fiduciary Real Estate Development (Fiduciary) for public improvements within Tax Incremental District 8 (TID 8). The TID 8 Project Plan identifies four specific development components: Apartments, Senior Housing, Northwest Commercial, and Northeast Commercial sites. The Agreement received unanimous Village Board approval; it formalizes the Village’s and Fiduciary's financial responsibilities and the schedule for repayment of public improvements.
The Village of Pleasant Prairie is responsible for financing the majority of public improvements within TID 8, about $6.5M, which includes 77th Street (west of 109th Avenue), 109th Avenue, 115th Avenue, corresponding utilities, stormwater, and right of way improvements. The Village will apply General Obligation (GO) bonds to finance these public improvements, using the increment generated by the Apartment site. The developer will also secure this GO bond repayment with a 10-year letter of credit.
"Pleasant Prairie has been working on this Agreement for some time and is enthusiastic to see it executed,” said Nathan Thiel, Pleasant Prairie Village Administrator. "Fiduciary is respected in the industry and develops excellent products. The company is committed to making a large investment in the community that will bring new value to an undeveloped area of the Village."
In total, the TID 8 project plan will generate $89M in new development value and $28.4M in district increment. Per the Developers Agreement, Fiduciary is committed to acquiring and developing the Apartment, Senior Housing, and Northwest Commercial sites. Fiduciary will also be responsible for the management and construction of all public improvements. The developer will privately finance a portion of public improvements totaling $1.5M, including the extension of 77th Street east of 109th to 104th Avenue. The Village will repay Fiduciary for these improvements with TID 8 increment using a Municipal Revenue Obligation (MRO) Bond and is conditional on the developer creating at least $6.0M, of the planned $12.9M, in new value at the Northwest Commercial site.
“Fiduciary is excited to see this truly unique development become a reality. It has been a true partnership with the Village of Pleasant Prairie to get to this point,” said Tony DeRosa, Vice President of Development for Fiduciary. “This development represents the last large developable tract of land in the area. The mixed-use development will attract major medical users, national retailers, and senior living users that all complement the 300 market-rate apartments.”
The remaining increment from the Apartment site and the Senior Housing site is expected to cover an additional $5.7M in regional public improvement projects located within a half-mile buffer of TID 8. The Village will manage the buffer projects, including a local contribution to WisDOT for the STH 50 reconstruction project, the Chateau Eau Plaines stormwater improvements, and the Chateau Eau Plaines water main relay project. Once TID 8 increment covers all buffer project financing, the Agreement will afford Fiduciary an additional incentive of $0.8M in MRO for private grading.
Other important provisions within the Agreement include the developer’s commitment to honor the minimum assessed values outlined in the plan, prohibiting the use of the “Dark Store” argument to contest values, and requiring the establishment of a payment in lieu of taxes (PILOT) for any future tax-exempt use. The Village is committed to putting all increment generated from the district toward Village financing before entertaining any future developer MRO.
