Monday, April 15, 2019

Oshkosh arena developer falls behind on property taxes; city says incentive payments are protected

Photo by Miles Maguire
The city and the developer of the Menominee Nation Arena are working on a plan to limit environmental liability.

By Miles Maguire

The developer of the Menominee Nation Arena has fallen behind on property tax payments to the city amid continuing concerns about environmental problems at the site.

The land underneath the facility remains in the hands of the city’s Redevelopment Agency, which has been unable to transfer the parcel to the developer because of the government’s newfound interest in a class of contaminants called per- and polyfluoroalkyl substances and known as PFAS.

These substances are no longer manufactured in the United States and have not been found at the arena site. But they are believed to pose significant health risks.

The problem for this project is that the U.S. Environmental Protection Agency has not yet developed guidelines for acceptable levels of exposure, and the Wisconsin Department of Natural Resources has suspended a liability program that covers reclaimed land such as what is found beneath the arena.

Without liability coverage, the developer, Fox Valley Pro Basketball Inc., cannot take over the land from the city. Without ownership of both the land and the structures there, the developer apparently cannot obtain the most favorable financing terms.

According to City Manager Mark Rohloff, the environmental and property tax issues are not related. “They’ve missed their quarterly payment, and they’ve given us no explanation,” he said, referring to the developers. “I’m not sure what cash flow issues that are there or aren’t there.”

The city’s interest in the project is protected because the developer is not eligible for incentive payments if it is behind on taxes, Rohloff said.

Greg Pierce, the president of Fox Valley Pro Basketball, did not respond to requests for comment.

Under the terms of the development agreement, Pierce paid for infrastructure improvements in the area with the understanding that he would be reimbursed by the city returning part of his future tax payments. These payments are not available if the property owner is not current on his tax bills, which is why the city expects the issue to be resolved.

The arena has an assessed value of $17.7 million. Its tax bill for the year is $438,719. One payment, for $108,629, was made Feb. 12, about two weeks late. A second payment, of $109,647, was due March 31 but was not made.

City officials do not believe PFAS were used at the arena site, which had been a furniture factory and went through an expensive decontamination process. They hope to get a letter from the Department of Natural Resources that will limit the overall environmental liability for the owner of the site.

The greatest concern about PFAS chemicals is groundwater contamination, which has been an issue in other parts of the state. But because the arena property, like most of the rest of the city, does not rely on groundwater, the danger from PFAS is considered lower in Oshkosh than elsewhere, Rohloff said.

PFAS "are found in a wide range of consumer products that people use daily, such as cookware, pizza boxes and stain repellants," according to the EPA. The substances have been linked to cancer, high cholesterol and disruptions to the immune and hormone systems. Because PFAS and related chemicals were so widely used and do not break down easily, most people in industrialized countries have some amount of the substances in their bodies.

Mayor-elect Lori Palmeri echoed Rohloff's comments about the city's incentive payments not being at risk. "Right now there’s no additional action by [the Common Council] that is needed," she said.

1 comment:

  1. No shit, like city did not know this! The Lamico site is the same way!