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Village Approves $10 Million Investment For Kohl's Development

The village will invest $10,050,000 to fund a series of property transactions, a grant, and relocation fees as part of the agreement with Kohl's Corp.

The Village Board on Tuesday took the next step forward in its multi-faceted agreement with Kohl’s Corp., which will eventually give rise to the company’s new corporate headquarters in Menomonee Falls.

The board gave Village Manager Mark Fitzgerald the green light to issue a $10,000,050 promissory to advance a series of property exchanges with Kohl’s. The promissory note and property transaction was part of the ago by the Village Board. It’s part of the overall financing for the taxing district that Kohl’s will build in.

The $10 million note will be utilized in the following:

  • $6.9 million will be used to purchase an existing 54,000-square-foot office building adjacent to the future Kohl’s building in Woodland Prime. Falls will turn ownership of that building over to Kohl’s and it will become a part of its corporate campus
  • $2 million covers a grant incentive to Kohl’s
  • $650,000 will be used to cover capitalized interest
  • $500,000 will cover a relocation costs for the office building owner to replace the one the village is purchasing.

In exchange for the 54,000-square-foot office building off in TID #10, the village will take ownership of the Kohl’s distribution center. Kohl’s will lease the building from the village for free, but will pay taxes and utilities until the company relocates to its new building. The distribution center will house the village’s Public Works Department in the future.

Falls will also over to Kohl’s for its future headquarters. The real estate transactions will all be completed by the end of the month per the development agreement.

Although the real estate transactions will close later this month, Kohl’s still has three years to submit a commencement notice and officially begin construction. Once that notice is submitted, it will set the clock in motion for a completion date.

Fitzgerald said the village issued a short-term promissory note to kick-start the project and will borrow long-term once the note comes due in 2015. At that time, the village will borrow long term as incremental value begins to trickle in from the new development.

That’s how the village handles funding in most taxing districts Fitzgerald said.

“In the early years of a taxing district we take out short term notes with capitalized interest to get the (taxing district) going,” Fitzgerald said. “We borrow long term after the district stabilizes and starts generating incremental value.”

In the long term, the village plans to gain a full return on its investment by 2031 by collecting additional tax revenues generated by the development. In the end, the village expects to bring in $62 million in incremental value.

W . Benz September 05, 2012 at 06:08 PM
More FREE money from the taxpayers , Grants , free land , and the village becomes a landloard and ownes a office Bld in a corp park [ TIF ] that the village gave to Kohl's [ TIF ] years before . So who's going to become a new tennant of this Village owned Bld. Kohl's still doesn't have to build in Menomonee Falls and can still relocate in another municipality or state but would have to return 2 million of the 6 if not completed in 6 yrs. in grant money. Kept a eye out and watch how the game is played by these Corporations.
Lou Stadler September 06, 2012 at 03:54 PM
Here we go again. Why would any borrower (ie. The Village Board) in their right mind borrow short-term now and long-term later, with long-term interest as insanely low as they are today? I really can't figure out why our Village Board wants to "play banker" when they have absolutely no idea what they are doing, as evidenced by the Radisson fiasco. It is unconscionable for the Village Board to act in the way they have in the past couple of years. All of the voters in the Village know when their terms expire! ! ! ! ! ! Lou Stadler
W . Benz September 06, 2012 at 05:42 PM
These people needed to be recalled but since the MFTax said there was no criminal wrong doing the Tax group opt to do a petition. The V-board then outmaneuver them with a unless ordinance limiting bascally nothing in spending. Refer to Aug 7.. MF Patch --V-board check and balances. ............Rino's @ work
Daniel S. September 07, 2012 at 01:27 AM
The Village will gain Fool Return by 2031!! That's almost 20 years away, Kohl's could be bankrupt way before that. Then there is this, in the End (?) it will bring in $62 million in incremental value. What is incremental value, and when is the END? Sound like more businesses taking taxpayers for a ride, so a few can live the cushy life.
W . Benz September 07, 2012 at 02:24 PM
Dan it was just years ago that the Village gave Kohls $$$$ for the S.S. corp park TIF Now they want another- IE more MONEY- TIF and threaten to move if they don't get what Kohls wants. The aggrement gives Kohls 3 yrs to [ complete ] or return $$$ 4 mill of the 6 mill to the Village --Kohls kepts 2 mill . The aggrement doesn't say they have to build and if they don't ?? . Aggrements can always be renegotiated / amended like the Village did @ the Hotel and @ Heritage park " never be developed" TIF's extended , changed, transferred , amended, added and the taxpayer never receives the benefits after 20 to 30 yrs ..... PONZI TIF

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