Extension of Alexander Judd Foundation $750,000 Loan
All, I received a number of calls from residents who have seen postings on social media condemning me and all of city council for voting to extend a loan from the Alexander Judd Foundation for riverfront improvement/development. The residents felt the messages are skewing what the situation entailed so I felt it necessary to explain this situation.
In 2013 the City of Wausau went to the Alexander Judd Foundation while assembling properties along the riverfront for economic development purposes. The loan was a balloon loan with interest of 2.75% with the principal due Aug. 2018. When the loan was negotiated the Aug. 2018 date was a "guess" to when the increment from development would be contributing to TID #3 enabling the balloon payment. Per Maryann Groat of Finance the remediation of the parcels the loan paid for took much longer than anticipated delaying any development which is needed to pay off TID debt with increment. The knowledge of the due date of the $750,000, finance did have this amount budgeted in the general fund. To be clear that is NOT what how TID's should work. The TID should generate enough development where property taxes from the development (increment) is supposed to pay off any loans etc. in the TID. TID #3 is under water by 3 million currently which means our general fund, used to run our city for services such as police, fire, capital improvement etc. is tapped to pay off any payments needed. This situation is exactly why the city was downgraded by Moody's last year, some TID's were underwater and needed support from the city's general fund.
With all this being said, if we used the allotted amount in the general fund to pay off our obligation, TID #3 would plunge deeper in debt and the general fund would be again hit with $750,000 less to run the city. During the discussion at the Council meeting I explained my uneasiness at our current situation with our TID's but found extending the loan the best for the entire city. We are very fortunate to have a special relationship with the Alexander Judd foundation who works so well with the city and believes in our vision of mixed use space along the riverfront. We extended the loan at the 2.75% rate which if we continue for the length of the current loan agreement amounts to $83.000 plus in interest. We can pay this loan off at any time with no prepayment penalty.
I am attaching the link to the video of the council meeting the discussion starts approximately at the 9:00 minute mark. There you can see my full comments on this vote. https://waam.viebit.com/player.php?hash=MGah8JUUcJqR
As always feel free to either phone or email me, message me on Next-door with any comments and concerns regarding neighborhood or city business. As you know I answer every phone call and email quickly.