Is it true that the city of Appleton’s cost for U.S. Venture’s project totals more than $76 million and might go higher?
An article in the Post-Crescent on 9/23/19 stated that “the city will spend more than $76 million to entice U.S. Venture to move its headquarters from Kimberly to downtown Appleton.” That is misleading. To better understand it, below are the individual elements that comprise the amount:
• $34.8 million for the construction of a 642-stall underground city parking ramp that will be the foundation for USV’s headquarters. First, it’s important to note that the ramp is owned and will be operated by the city. The ramp will be a part of the city’s plan to address downtown parking needs. USV has agreed to rent 400 stalls, which guarantees revenue back to the parking utility to pay off the loan. Because the ramp is public, the community will also pay parking fees, which will be used to pay for the ramp. USV also agreed to pay $1,582,000 for the ramp to offset costs associated with design elements related to USV headquarters and to support construction of the ramp.
• $29 million for interest on borrowing for the ramp. While the absolute interest cost over 25 years is approximately $29 million, in today’s dollars that value is approximately $15 million based on an expected 3.5% interest rate that the city would be paying. This means that, if the city set aside approximately $15 million today in a very conservative growth fund, it would provide enough cash to meet all of the future interest payments of $29 million. The $34.8 million, plus all interest payments, will be paid by the parking utility through parking fees. Again, USV has guaranteed it will rent 400 stalls a month until the ramp is paid off in full to help the city make these payments.
• $8 million in support from the city. The funds are a part of TIF financing and are generated from the taxes USV will pay annually to the city, based on the assessed value of the new headquarters. The assessed value is estimated to be at a level at which taxes would be more than $1 million annually. This means that USV pays back the entire $8 million, including interest and principal, at no cost to taxpayers.
• $4.6 million for the acquisition and clearance of the Mosaic Family Health property. The land Mosaic is on is currently valued at $3.3 million, so $4.6 million includes demo and relocation of the clinic. USV is not involved in the relocation of Mosaic. Though USV benefits from receiving the land, the community also enjoys the benefits of a nonprofit medical center with new, state-of-the-art facilities.
• $378,000 for concrete and storm water work. The city’s Downtown Appleton Mobility Plan, published in 2016, identified the need for improved traffic operations in this area for the benefit of the community. Any costs that may be directly attributable to USV’s new headquarters will be paid by USV.