Thinking outside the Square
LISA SINK
Thinking outside the Square
Brookfield sets vote on plan to spur development
By LISA SINK lsink@journalsentinel.com, Journal Sentinel
Sunday, August 15, 2004
Brookfield — As the city celebrates its 50th birthday this month, civic leaders say they are entering a new era of growth: redevelopment.
And no area in the city is as important for redevelopment, they say, as the area around Brookfield Square mall.
The city wants to see a costly and complicated insertion of homes, shops and restaurants between the mall and Executive Drive office park. To spur the development, the mayor says the city needs to invest money through a tax incremental financing district.
It’s an economic tool the city hasn’t used since the 1970s — although they have become commonplace in neighboring communities.
After months of study, aldermen may vote Tuesday on a plan to create a financing district that calls for a $21 million public investment to spur about $94 million in private investment.
Several aldermen say they have concerns about the plan. And one has been lobbying against it for months, saying the tool amounts to an unnecessary handout to developers at the expense of taxpayers.
Mayor Jeff Speaker said the redevelopment and financing tool are critical to the future of the mall and the entire Blue Mound Road corridor.
“I don’t want all the development to pass Brookfield,” Speaker said. “This is still the business address to have. This is still the residential address to have.”
How tax districts work
Under a tax incremental financing district, additional property taxes collected from new development are used to pay for the city’s work inside the district. The city plans to borrow $21 million — $32 million with interest — to build new streets, sewers, water mains, a park and a parking garage.
Additional tax revenue from new development normally would go to the schools, city, county and technical college. But the taxes instead are diverted from those governments until the city improvements are paid for, which in the mall area’s case could take up to 23 years.
After the debt is repaid, the additional taxes start flowing to the other entities.
The rationale behind the tax districts is that “but for” the city’s improvements, the new development would not occur and the boost in tax base would not be created for all to share.
But Ald. Cindy Kilkenny said she thinks the redevelopment would occur and is occurring without a tax district.
Of the $94 million in projected new construction, $44 million already has been approved by the city and is under construction.
Developers have received approval to build Fountain Square and Georgetown Square north of Blue Mound Road and the mall — on land including Storm’s Golf. The mini-golf course is closed, and the driving range is to be relocated elsewhere in the area.
Fountain Square is a retail complex that will include an Ashley Furniture store, Bed, Bath & Beyond and other retail and restaurant use. Georgetown Square is a residential project to be located north of Fountain Square and include 144 apartments and 57 condominiums.
Barnes & Noble is moving from its store north of Blue Mound Road to the mall, where it is building a two-story store between the Limited and Houlihan’s restaurant.
Dan Ertl, director of the city’s community development office, said that those projects build confidence that the city’s investment will be repaid by private development and the tax district will be successful.
The city is more concerned about the lack of progress by properties on the south side of Blue Mound Road. Common Council President Richard Brunner said the entire area is slipping and needs a face lift.
Dense development sought
The city, with the tax district, hopes to spur property owners to build mixed-used development of densely packed shops, restaurants, condominiums, apartments and office space. The mixed center would be a pedestrian-friendly area with a park-like public square south of Blue Mound Road.
Specifically, the tax financing district’s plan calls for construction of a total of 410 housing units (246 condominiums and 164 apartments), 216,107 square feet of retail and restaurant space, and 72,000 square feet of office space. This includes Georgetown Square and Fountain Square.
Because the area is already developed with no large vacant parcels, the new construction would be “in-fill” development. That means the homes and shops would be built on existing parking lots.
Two parking garages are envisioned to accommodate the housing and offices. Some street parking and condominium unit garages could be included, Ertl said. The city would invest $3.98 million in one garage but probably would not own or maintain it, he said.
The idea of the city’s vision is to create a bustling space where people can live, work, play and shop — a sort of suburban downtown with sidewalks, benches and streetscapes.
Speaker compared it to the night life he said he enjoyed during a recent trip to Boston, as he strolled along Newbury St. at 11:30 p.m.
“It’s so alive and it’s phenomenal to see that energy and that total mixture of uses,” Speaker said.
“I would love to be able to create that energy and synergy here in Brookfield.”
Neighbors wary
But neighbors aren’t so convinced the project would be desirable.
“A family isn’t going to want to live there,” in between the mall and shops, said Gaylen Stoa, who lives on Golf Parkway near the office park. “This isn’t downtown Milwaukee.”
She expressed concerns that her quiet neighborhood would become overrun with residents from the adjacent condos and apartments looking for some green space to “walk, bike and walk their dogs.”
Barbara Roncke, who founded a citizens group that monitors development issues south of Blue Mound Road, said she was opposed to the plan but has changed her mind.
“That’s apparently what the younger professionals want,” Roncke said. “I can see it with my own children — they’re buying condos downtown because they like the action. They like having everything right together.”
Roncke said she also believes a tax district is justified to spur needed redevelopment because owners have not been doing it on their own.
Aldermen Chris Blackburn and Dan Sutton said they were concerned, however, that the density of the housing may be too great, especially apartments.
And Blackburn said that the development will not be paying for the services it requires — for new schoolchildren, police and fire services — because its tax revenue will go instead to pay for the city’s public improvements.
At a public hearing last month, one resident said the developers should pay for everything.
Ertl said that developers are paying for some public improvements – – $3.1 million to extend two streets north of Blue Mound Road intended to relieve traffic congestion.
Ertl said that the mixed-use plan is the best way to revitalize the area and sustain it for decades to come.
New patterns emerge
Old suburban development patterns are being replaced by newer ideas, such as lifestyle malls and commercial areas buttressed by housing. Bayshore Mall in Glendale and Pabst Farms in Oconomowoc are adopting those ideas. Glendale plans to invest more than $35 million in a tax district it created for Bayshore. Pabst Farms is the beneficiary of a $24 million tax district.
Kilkenny insists that the city is trying to solve a problem that doesn’t exist. The mall area is healthy, she said.
One argument listed for the redevelopment was that the area’s property values were slipping. Ertl said property values had declined about $977,000, or 0.5%, between 2001 and 2003.
But those figures are assessed property values — not equalized or fair market value, which the city uses to collect taxes. Equalized values in the mall area rose about 10.18% in that time, Kilkenny found.
The fair market of the mall — not including its three anchor stores — rose about 15% to $91.7 million in 2004 from about $79.8 million in 2001. A decade ago, the mall’s value was about $54 million.
“For two years elected officials were led to believe that we were in trouble,” she said. “We were never in trouble. This mall has never been in trouble.”
One office building in the Executive Drive park has seen its equalized value decline. And rents have been dropping there, although the office park remains assessed at class A status and has the area’s third-best occupancy rate, behind Milwaukee and Wauwatosa parks.
But a market analysis said that the offices are becoming “tired” and trying to compete with newer, fresher parks in the region remains a challenge.
Other aldermen say the area is in danger of slipping and they want to be proactive, before it’s too late, as at Northridge Mall and along other commercial corridors.
“If something isn’t done, we will see a deterioration,” Ald. Gary Mahkorn said.
Property values haven’t declined but proponents of the plan say they also could have risen higher had redevelopment occurred in recent years.
“What have we lost to Mayfair?” Speaker asked.
Ertl said there were retailers and restaurants that went to Mayfair that should have been at Brookfield Square. Tenants looking to open second or third locations in the Milwaukee area now will go to Bayshore or Pabst Farms because Brookfield Square is too close to Mayfair.
Mall owners vow expansion
The mall’s owner defended criticism that it has been too slow to expand.
CBL & Associates Properties Inc., which bought Brookfield Square in 2001, says it has a major expansion in the works that it is not yet ready to reveal.
“We have looked at over 50 schemes to improve Brookfield Square, and the Barnes & Noble is a first step in that effort and a major step,” said Michael Lebovitz, CBL’s senior vice president of mall operations.
Among ideas considered are adding a second floor, he said.
“We are confident that Brookfield Square is an important retail player in the market,” he said. “The location remains excellent . . . and there are a number of retailers who want to be at Brookfield Square.”
Mahkorn said that entire Blue Mound corridor depends on the success of the mall and Executive Drive area.
“If those roots wither and die, the rest of the vine will die,” he said. “We have every obligation to the citizens of this community to protect that tax base. This could be the council’s legacy: how Blue Mound Road develops in the future.”
Kilkenny countered that the plan gets “away from our roots — being a suburb. We don’t need to be a vibrant urban corner.”
MALL VOTE
— The vote: Whether to borrow $21 million for improvements to spur development around Brookfield Square mall.
— When: Brookfield Common Council, 7:45 p.m. Tuesday
— Where: City Hall, 2000 N. Calhoun Road
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