After a period of relative calm, it appears the city and Tom Tousis are headed for a clash over a proposal to build a grocery store, gas station and restaurant at the corner of West Boulevard and Washington Avenue.
The Redevelopment Authority, which has already approved giving Tousis an option to buy the land, now may reconsider its decision after questions about the project's total assessment were raised.
City Development Director Brian O'Connell issued a memo Thursday saying Tousis' project will have an assessed value of $2.8 million, which is well below the $5 million assessed value the city was hoping for the site. The city needs a $5 million development on the corner to pay off loans it took out to demolish old buildings and create space for redevelopment.
O'Connell's memo was based on a review by City Assessor Ray Anderson. Here's O'Connell's memo:
Commissioners:Zak Williams, a spokesman for the Tousis project, said O'Connell's memo fails to note that there is additional property in TID-11 on the north side of Washington Avenue, which is the former Piggly Wiggly building. Land on the north side makes up 60 percent of the TID.
The request of Tom Tousis for an extension of the deadlines in his option agreement is on the agenda for your meeting on April 7, 2010.
In the time that elapsed between receiving the request from Mr. Tousis and your meeting, Mr. Tousis submitted his development for design review. The application for design review stated that the cost to construct the development is estimated to be $2.8 million. Later reports in the media stated the cost to construct the development would be $4.2 million. The projected value of the development is relevant because the tax incremental district for West Racine (TID-11) anticipates that the property on the south side of Washington Avenue will have an assessed value of $5.0 million after redevelopment.
Because construction cost differs from assessed value, I asked the City Assessor, Ray Anderson, to estimate the assessed value of the proposed development. Mr. Anderson considered all the parts of the proposed redevelopment shown on Mr. Tousis’ plans, including the gasoline pumps and canopy. Mr. Anderson estimates that the assessed value would be $2.8 million.
A copy of Mr. Anderson’s memorandum is attached to this e-mail. I have also attached copies of Mr. Tousis’ plans.
I provide this information in the interest of having a more informed discussion at Wednesday’s meeting. If you have any questions in the meantime, feel free to contact me by phone or e-mail.
The assessed value of Tousis' project would cover its share of the TID, Williams said.
The RDA has twice put off votes on Tousis' extension of deadlines due to a lack of quorum at its last two meetings. Now, based on O'Connell's memo, it appears the RDA may not only reconsider the extension, it may reconsider the project all together.
With no other projects in line to build on the site, the RDA is faced with the decision of going with an less-than-desirable assessment and paying off some of the debt, or scrapping the development and hoping a $5 million project comes along.
Williams is pessimistic any one else is interested in the site.
"If this doesn't go through, no one will build on this site for at least five years," he said. "Then the TID will be upside down, and development will never pay off the loan."
Update: Ryan Rudie, Tousis' architect on the West Racine project, fired off an email to the city development department and several city officials saying the project should be valued at $4.2 million - closer to the desired $5 million level. Here's Rudie's letter:
Dear Mr. O'Connell,
I sure hope this is the last time I have to repeat this to you or Mr. Sadowski or anybody in your department, but the application form was filled out incorrectly by me and did not take into consideration the cost of the gas pumps, gas pump canopy, gas storage tanks, and building fixtures such as refrigerated grocery cases, grocery shelving, walk-in coolers, and walk-in freezers. All of these are items that would be purchased and installed by the Owner or another entity employed by the Owner and were not part of my Architectural plan and thus were not included in my original building estimate when I filled out the form. All of these items are necessary costs of development and therefore should be included in the overall budget which is $4.2 million.
Your email stated that you "provide this information in the interst of having a more informed discussion at Wednesday's meeting". Not only are you informing everybody incorrectly, it seems to me you are trying to muddy the waters and create obstacles for this development.
I hope once and for all we can put this issue to bed___!
Ryan M. Rudie, AIA
Butterfield, Rudie & Seitz Architects, Inc.
920 Goold Street