Builder drops out, but Pabst Farms’ plans proceed

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General Growth Properties announced Friday that it is officially dropping plans to build a shopping mall at Pabst Farms in Oconomowoc.
“General Growth Properties has decided not to participate with Pabst Farms in the development of a shopping center at Oconomowoc,” Jim Graham, director of Public Affairs for the Chicago-based developer, said in a Friday e-mail to The Daily Reproter. “We gave the project long, careful consideration, but in the end it proved to be not the right time or conditions for us to pursue this project. We sincerely appreciate all of the hard work that the city, county and state put into working with Pabst Farms and us, and we are confident that those efforts will bear fruit in the form of other kinds of economic development for Oconomowoc.”
Pabst Farms Development told Waukesha County Board officials on Monday that General Growth was having second thoughts about the project. The company’s first public statements on the situation came on Friday, and the above e-mail was the company’s only comment.
Pabst Farms is talking to other firms that could develop a mall on the same property, and a company spokesman on Thursday said it plans to stick to a 2008 or 2009 construction start. Last month, county, city of Oconomowoc and state officials struck a tentative agreement to build an interchange to serve the mall in 2008 or 2009, instead of after 2010, which was the original plan.
Thad Nation, spokesman for Pabst Farms, said General Growth’s announcement wasn’t unexpected and wouldn’t affect the company’s search for a new developer.
“I don’t think this really changes anything,” he said. “Certainly other developers knew that General Growth had taken a step back.”
Officials at the city, county and Department of Transportation didn’t blink after General Growth’s Friday announcement. All of them noted that any funding agreement would say no interchange will be built unless a mall will be constructed also, so approving the agreement now doesn’t create a financial risk. Dewayne Johnson, southeast region director for WisDOT, said the agency would continue planning for the interchange in anticipation of a 2008 or 2009 project.
“We want to be ready, just in case,” he said.
County Executive Dan Vrakas said finalizing that interchange deal could help Pabst Farms’ effort to find a new developer for the project. Nation agreed with that point.
“Instead of being at the 80-yard-line going into the red zone, we’re a little farther back in the field and we’re still heading toward the end zone,” Vrakas said. “The developer, Pabst Farms, has an agreement to actually get that done, and they can go to another mall developer, and that developer, like General Growth, is going to want to know there’s going to be an interchange.”
Oconomowoc Mayor Marty Sullivan said he was disappointed to see a good developer like General Growth leave the project but, like Vrakas, he said the interchange and general plan for a mall still stand. He offered a sports metaphor of his own.
“We’re talking about a different player or a different name on the jersey,” he said. “The concept still lives, it’s bigger than one firm.
“I wish it hadn’t happened, but is this the end of the thing? I don’t think so at all.”
The County Board is set to vote Oct. 23 about its portion of the interchange funding. The county’s Executive Committee on Monday voted 4-3 in favor of the funding.
County Board and Executive Committee Chairman Jim Dwyer, who expected a close board vote even before General Growth announced it was pulling out, said he will still vote for the interchange funding because it will save the county money in the long run.
“The Department of Transportation is going to expand this interchange regardless of a mall development, it’s just a matter of when,” he said. “If they wait until 2012 or 2014 (as originally planned), it will be up to the county to improve County Highway P to handle the additional traffic flow. That’s a $4.5 million project now and assuming material costs increase by 3 percent a year, could be $6 million.
“Building it under this agreement costs us only $1.75 million, because the developer, city of Oconomowoc and state are all chipping in.”
Duane Paulson voted against the interchange funding at Monday’s Executive Committee meeting for “philosophical reasons,” rather than doubts over General Growth, and said he would stick to his vote in the board meeting. Paulson said he assumed the extra unknowns now surrounding the project would sway some voters on the fence to his side.
“We only get so much money for capital projects and you have to wait your turn,” he said, noting the slow progress of a bypass project at Highway TT that was mapped out four years ago. “Now, something new comes along, and bam, it goes to the top of the list? When a private developer wants something extra, they generally have to pay for it.”