By Kim McDarison

Members of the Whitewater Community Development Authority (CDA) on Thursday voted to recommend to the Whitewater Common Council approval of a proposed 128-unit multifamily development on Moraine View Parkway.

The two-phased project, if approved by the city council, would include eight two-story, 16-unit buildings, to be developed on an approximately 10-acre parcel.

During Thursday’s CDA meeting, discussion revolved around the compatibility of the project with other housing structures already in the city, the use of subsidies or tax incremental financing (TIF) dollars to incentivize the project, the governmental process through which the project was being discussed, and the proposed need by at least one board member for more community engagement involving the entirety of the project.

Proposal to remove closed session item fails

Discussion about the project began early in the meeting as members sought to approve the evening’s agenda.

With newly elected CDA Chairperson Greg Majkrzak presiding, board member Jeff Knight asked the body to consider removing its closed session item from the agenda, which dealt specifically with considering the multifamily development.

An earlier story about the election of a CDA chairperson is here: https://whitewaterwise.com/cda-elects-majkrzak-as-chair-kromholz-as-vice-chair-zeinert-to-serve-as-cda-director/. 

“The subject matter is such a change from past practices; it has a huge potential to impact everyone’s property taxes. I believe it should be vetted in the entire community and have the city council take a stand on this new position prior to us taking this up,” Knight said during Thursday’s meeting.

Board member Neil Hicks noted his desire to consider Knight’s request by providing a second to his motion.

Whitewater City Manager John Weidl, in response to Knight’s comments, said an opportunity for further discussion about the development would be available to city officials and community members at an upcoming council meeting, which would be held after the CDA meeting. He added that the outlined process was “the normal order of the way all of the other development agreements have been approved, as it goes to the CDA first for recommendations.”

Said Knight: “Well the only conversation — the subject matter is so significant of a change. I really think it needs to be vetted in the community. To only take it up in closed session is unfair, and I just would like to see greater transparency on this and more engagement in the community, and that’s why I’m moving that we remove this from the executive session.”

Following a vote, the motion to remove the item from the agenda failed 4-3, with board members Jon Kachel, Hicks and Knight voting in favor of the action.

Board members next voted 5-2 to approve the agenda as presented, with Kachel and Knight casting ‘no’ votes.

Additionally, following a suggestion from Weidl, board members voted unanimously to postpone an item to approve board minutes from a meeting held April 18. Weidl noted that the Administrative Assistant for Economic Development Bonnie Miller, who prepares the minutes, was away due to a family emergency.

Economic Development Activities update

Among items on Thursday’s agenda, the board received an update from recently hired Economic Development Director Taylor Zeinert, who was unanimously approved to additionally serve as the CDA director on Thursday.

Within a memo to the board, Zeinert outlined nine items, which, she wrote, described work completed or underway within the economic development office.

Among items, she noted that she had completed four business recruitment and expansion meetings, and had scheduled seven more, and had planned and facilitated a Housing Roundtable Discussion event. As of Thursday, she had finalized the list of Whitewater WindUp judges, and had worked with a developer to review votes received through the WindUp app. She also had contacted the competition’s finalists, and had prepared space for what was then an upcoming event. The event has since been held on Saturday.

Zeinert said she additionally had attended a course titled: “Basic Certified Economic Development,” which was offered in Eau Claire.

She also had “connected with Neumann regarding Park Crest, a new 19-home development.”

She noted Miller’s absence, but, she added, the economic development office was still moving “full steam ahead.”

Update and discussion regarding April 25 Housing Roundtable

Zeinert also offered an update on the city’s Housing Roundtable event, held last month.

She said 67 individuals attended the event, which she added, “is something that the city hasn’t seen before. The city hasn’t done something like this prior, so it’s great to see the buy-in.” 

She reviewed the event, referencing “slides” which were provided in paper form to the board members.

Within her update, Zeinert said that the roundtable brought to light the need for additional housing units in Whitewater and the broader region, with a projected need for some 500 housing units, identified by Southeastern Wisconsin Regional Planning Commission (SEWRPC) Deputy Director Ben McKay, in Walworth County by 2030, and 1,500 units by 2050. 

Recounting information delivered during the roundtable event by Erik Doersching, executive vice president and managing partner of Illinois-based Tracy Cross and Associates, Inc., a real estate marketing consulting firm, she said the company’s Whitewater-specific study showed “that there has not been sufficient enough housing within recent years, which has kind of made this pent up demand, and it’s not just single family housing, It’s multifamily housing …”

Referencing a paper slide provided to board members, she said, “here it does say, it notes the new homes for sale, looking for projected that we will need 400 units within this next year. It does note that we need 175 conventional rental housing.”

Citing another paper slide shared with board members, Zeinert said, it was produced by “professor (of urban planning in the Department of Planning and Landscape Architecture) Kurt Paulsen, who is from University of Wisconsin (Madison), he really has stepped forward as the leader … when it comes to housing and the current need that we have.” 

Housing, and the lack of it, she said, “it’s not just a Whitewater thing, it definitely is a Wisconsin thing.”

Pointing to the Paulsen slide, Zeinert said, “construction costs for a single-family home have increased by 36.6% in Wisconsin since this data was last pulled in 2023.”

The average home in Walworth County is selling for $337,000, she continued, noting that multifamily construction also has gone up by 37.5%.

“So basically, we need housing, and we need all sorts of different types of housing, whether that be single family or mixed use, or multifamily — housing is something that the entire state needs,” she said, including Whitewater.

Arriving at the podium, Whitewater resident Larry Kachel noted that he is a former member and president of the CDA.

Larry Kachel questioned information provided during the roundtable. He said he was not sure who authorized or paid for the study presented by Doersching, but, he said: “I do have some issues with some of the data put into the study.”

Larry Kachel said that during the roundtable discussion, Doersching said that adding housing rental units for non-student renters would have no impact on student housing, calling his claim “absolutely wrong.” 

Citing past multifamily housing development proposals, he said the city had “no history” of providing subsidies to multifamily developments, because, he claimed “we have a lot of multifamily housing in the community.”

Larry Kachel said that the city was composed of some 60% multifamily housing units and some 40% single-family units.

“What we really need is single-family … with families that can come to the school district and things like that,” he said.

Citing student renters, regarding where they might choose to live, he said: “The market will determine that. Students are not a group that you can exclude, nor should you.” He added: “they’re going to go wherever they want to go.”

Citing the proposed project, referenced by some as the “Slater/Kowalski” project, Larry Kachel noted that the city has proposed the “possible” use of some subsidies, such as TIF, to incentivize the project.   

Said Larry Kachel: “I just want to remind you, over the last two years, from ’21 though ’23, you should all look at your property tax bills. Don’t worry, I did it. I looked at each one, and they’re all the same. The percentage increase on your city portion of your taxes was approximately 27%.”

He said the reason that the overall tax bill did not increase for city residents was due to the school district’s ability to lower taxes through its use of ESSER (Elementary and Secondary School Emergency Relief) funds when developing its most recent referendum, (which were made available by the state during the COVID-19 pandemic), and the district’s responsiveness to pay down its longterm debt, which, he said, was a process “started several years ago.” 

“It’s not likely to happen in the future,” he said.

Citing the use of TIF incentives, Larry Kachel said when the city uses such resources the school district and the city don’t see the gain in the TIF district’s value reflected in their revenues until the incentives are paid back.

“The school district and the city don’t see that increase in revenue, but you do have an increase in costs because you have sewers, roads, things like that, police service, fire service, and so … you never get caught up correctly,” he said.

Returning to the study presented at the roundtable, he said: “I’m a little disappointed in some of those numbers. I felt that it was somewhat urban based.”

He noted that while he had “no problem” with an individual building projects they felt were a good idea on their property, when it came to subsidies, he said: “let’s subsidize the things that we need — single family.”

Knight, too, offered his impressions of the roundtable event, saying that he had made some suggestions during the last CDA meeting, and had discussed his ideas with the former CDA Director Calli Berg, who resigned in January, which included “the need to get information out to all the property owners,” and “to educate the property owners on all the tools the city had put together.” Knight said he thought the city manager and Zeinert, then serving as interim economic development director, had embraced his ideas, and he was disappointed that they were not included in the April event. 

Addressing Weidl and Zeinert, Knight said: “Both of you were in agreement when I suggested that was a good idea. What I was disappointed — that piece didn’t happen. And, for whatever reason, maybe we ran out of time or whatever, and the other piece I think this body should hear is that there was quite a bit of dialog, especially with the people in attendance with the credibility of the numbers in the Tracy Cross study. So I think that’s important, and then there is also some differences of opinion between SEWRPC and, as far as, for example, the SEWRPC presentation, somebody said there’s currently a 4-6% vacancy rate, and it actually meets the HUD standards, and that was right in his presentation. So there was some conflicting data presented.”

Addressing the board, Knight said: “and I think that’s important for the body that couldn’t make it. You might want to watch the video so you can understand what those questions were. I think it was, overall, even though we didn’t get the fees for the property owners and hear all the new tools we put in place, I think overall, it was a good reception, I’m not here to criticize that.”

He said the event “could have used another hour to cover all of the items.”

Weidl said he believed there was a need run the roundtable again. 

Addressing Knight, he said: “As you know, most people started walking out into the second hour, so it’s hard enough to keep people’s attention for a full morning, or their schedules.”

Discussion following closed session

The board next moved to closed session.

According to the agenda, the closed session was held to deliberate or negotiate the purchasing of public properties, the investing of public funds, or conducting other specific public business, whenever competitive or bargaining reasons require a closed session. More specifically, “consideration and possible action regarding proposed multifamily development to be located on Moraine View Parkway for Chris Slater.”

Board members voted 6-1 to move into closed session, with Knight casting the ‘no’ vote.   

Upon a return to open session following closed, Majkrzak said he would recommend approval to the city council of the proposed development.

During discussion conducted before a vote on the matter was taken, Knight said he was concerned about moving forward with the project, noting that, in his estimation, the project did not meet the “but-for” TIF district requirement.

He noted that another developer in the area builds projects that he described as “very nice,” and they are built without “any special tax or TIF support from the city.”

Knight said that he believed the process used to consider the project “could have been vetted a lot earlier,” asking, “does this make sense for this city, subsidizing multifamily development?”

“I want to make clear that one of the major reasons is this revenue that gets generated from these multifamily projects will not go back to the general fund of the city. So what you’ve got (is) a high density project that you are approving. The services needed for police, fire, ambulance, and other care at the school district increase without the ability to raise revenue to cover it. I’m also very concerned about the comparables that Neil (Hicks) brought, showing the cost that we’re willing to subsidize in Whitewater compared to a project that he’s looked at in Madison.  I think multifamily, I’ve talked to developers from other communities around here, the feeling that I‘ve gotten back is the rental apartments is exceptionally strong, rents are very high, and people are building apartments without community support. I do know TIF has changed. I support TIF, I always have,” Knight said, adding that he believed it was important to engage with the entire community as part of the discussion.

“I just don’t feel this process this quick is given enough coverage, and I don’t feel it was strategically sold to the community well enough, so therefore I’m going to have to vote against your motion.”

Board member Joe  Kromholz said he was in favor of the motion.

“I completely disagree with the statements that were just made. The underlying numbers that have been presented, and the process by which we are proceeding is appropriate. The public will have an opportunity to be fully informed and there will be more stages along the way for this project to be improved. I will vote for the motion.”

Jon Kachel also weighed in saying: “I think that Whitewater is in big need of single family housing, and I think that’s what we should put our assistance to.”

He said he had recently spoken with a developer who expressed interest in developing single-family units.

“I think we want to make sure that we have priorities,” he said.

The motion was approved by a 4-3 vote with Jon Kachel, Knight and Hicks voting against the measure.