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Brookfield developer wins city approval for tax increment district for Wheel & Sprocket project

A northeast view of the potential Wheel & Sprocket development in Brookfield. City officials voted 5-1 on Monday to approve of a tax increment district to help the developer pay for environmental remediation. Photo courtesy of The Kubala Washatko Architects.

Plans for housing and a new bicycle shop in Brookfield took another step forward on Monday after Brookfield officials voted for approval for tax increment district (TID) to clean up a contaminated field before building, city officials said. The project was the center of controversy as both alderpersons and residents discussed the size and density of the proposed mixed-use apartment complex.

The Brookfield Plan Commission voted 5-1 to grant a TID to developer Heimat Group who are representing Wheel & Sprocket to build a mixed-use apartment and retail space for the southeast corner of Capitol Drive and Lilly Road.

Developer Heimat Group wants to build a 19,000-square-foot building including a new Wheel & Sprocket bicycle store and 75 apartment units at the intersection. Wheel & Sprocket owns the land and wants to make the lot a new home for their next Brookfield location. Before they can build, they asked the city for a $3.5 million TID to excavate contaminated soil and demolish the former AAMCO Transmission station that occupies on the property.

Brookfield Mayor Steve Ponto said the approval was “a function of what it takes to generate enough revenue to clean up the property.”

“This has been a difficult issue overall. I’ve gone to the site and walked it. We shouldn’t allow conditions like that to remain in Brookfield. It’s very important to make the improvements that we can, and those improvements require rental units and housing units to make the project economically feasible to clean up the contamination and have a good home for Wheel & Sprocket,” Ponto said.

The “pay as you go” form of tax incremental district, proposed by Heimat Group, wouldn’t be a direct cost to the city and would pay for environmental remediation, Ponto said. The developer would be repaid through an increase in taxes in the district, Ponto said.

The commission is made of Mayor Steve Ponto, Alderman Gary Mahkorn, Alderman Mike Hallquist, Alderman Rick Owen and three resident commissioners. Owen gave the only “No,” vote for both motions.

Owen told The Daily Reporter he supported the environmental remediation tax increment district for the site and government incentive would be necessary, but he opposed the density of the development.

“I actually support an ERTID (environmental remediation tax increment district) for this site and believe that if we want to encourage development on a “brownfield” site like this, some type of government incentive will be necessary. That said, I felt that voting in favor would send the wrong message since I oppose the development. I highlighted specific planning documents that don’t support this level of density, even as I noted the more general 2050 Comprehensive plan generally supports. It’s a matter of where planners direct their focus; I chose to focus on more specific planning documents that I believe actually discourage the level of density proposed, as opposed to our Comprehensive Plan that is often described as a view from the 30,000 foot level,” Owen said.

Hallquist, who voted to approve the project, said the “pay as you go” method would shift the financial burden to the developer instead of the city and add an attractive residential and retail destination to the area.

“I’m glad to see the project move forward. This is an opportunity for the city to remediate a blighted low-value location while supporting the growth of a local business that has been operating for decades in Brookfield. The “pay as you go” proposed model for the ERTID shifts the financial burden to the developer instead of the city, which is a huge plus for this project. Ultimately, Wheel & Sprocket’s proposed development checks off multiple goals in the City’s established 2050 Comprehensive Plan and would turn an ugly street corner into a nice residential and retail destination. In the current climate, it’s hard to imagine a better project for this location that is economically viable considering the estimated cost of environmental remediation required at the proposed site,” Hallquist said.

After Tuesday’s vote, Ponto said the proposal would go to the Common Council for discussion on March 21. There will also be a future public hearing held for the creation of the TID as required by law, city officials added.

Noel Kegel, owner of Wheel & Sprocket and Kegel Real Estate LLC, said the company has been at the Lilly Road and Capitol Drive location since 1994 and in Brookfield since 1985.

“Many years ago, we embarked on this campaign and realized our property in Brookfield is functionally obsolete and needed a plan to update the site. We researched various options and landed on a mixed-use, higher density project coordinating with the City’s Comprehensive Plan,” Kegel told The Daily Reporter.

The AAMCO Transmission station on the corner of Capitol Drive and Lilly Road. Developers want to demolish the station and build mixed-use retail and housing. Photo courtesy of The Kubala Washatko Architects.

About Ethan Duran

Ethan Duran is the construction and development reporter at The Daily Reporter. He can be reached at (414) 551-7505 or [email protected]

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