A request to rezone a vacant industrial building to make way for a tax-exempt charter school has forced Milwaukee aldermen to decide if they are willing to lose the tax revenue.
If aldermen change the zoning, Trans Center for Youth Inc., Milwaukee, can buy the building at 3628 W. Pierce St. and use it to expand the Escuela Verde to 100 students. The school, which opened in 2012, uses rented space at 126 E. Mineral St. for about 70 students.
If the school moves into the industrial property, the city loses the property tax, which was $3,682.46 in 2013. According to city records, the property was assessed at $155,000 in 2013.
Milwaukee-based CSA Commercial is advertising the 11,000-square-foot building with a sale price of $375,000, according to a listing on the company’s website.
“While I’m not a big fan of taking properties off the tax rolls, this property has been vacant for many years, collecting graffiti,” said Alderman Robert Donovan, whose district includes the industrial property.
Losing the tax revenue is a sacrifice each member of two city panels was willing to make. When the proposal reached the city’s Zoning, Neighborhoods and Development Committee on Tuesday, however, three of the five members voted against the zoning change, meaning the request will go to the Common Council with a recommendation to deny.
But there did not have to be a choice between property taxes and the school, said Alderman Robert Bauman, a committee member who voted against rezoning. He said the city could have had both if Trans Center for Youth’s request had included a payment-in-lieu-of-taxes agreement, under which a tax-exempt property owner pays a city a set amount of money to offset the city’s loss of tax revenue.
Daniel Grego, executive director of the Trans Center for Youth, said he is aware of PILOT agreements but was told by Donovan and the Department of City Development that the city could not require such payments in exchange for the zoning change.
“We were very astonished,” Grego said. “The first thing they said was they want this PILOT.”
In the case of the industrial property, the city does not have the right to a PILOT, said Alderman Jim Bohl Jr., chairman of the zoning committee. Bohl, who voted in favor of the zoning change, said Milwaukee can require a PILOT only when selling city-owned property or providing financial assistance to a project. Neither applies to the request from Trans Center for Youth, he said.
Nothing, though, is preventing Trans Center for Youth from voluntarily entering such an agreement, said Alderman Nik Kovac, one of the zoning committee members who voted against the proposal. By the time the proposal reached the zoning committee, he said, it was too late to make that request.
But it should have come up, Kovac said, when Trans Center for Youth first made the request.
“Obviously,” he said, “the Department of City Development massively screwed up.”
Jeff Fleming, DCD spokesman, denied the department made a mistake but declined to comment further.
It would not have mattered anyway, Grego said. A PILOT agreement would have meant less money to spend on students, he said, and that is not an option for Trans Center for Youth.
It should not, he said, be an option for the city either.
“Why do they want to stand in the way,” Grego said, “of what’s obviously a really promising school?”Follow @bkevit