Redevelopment Authority debates policy to buy property for redevelopment; members weigh guardrails, financing and scope

At a 6:00 p.m. meeting, the Waukesha Redevelopment Authority discussed guidelines for creating a policy that would allow the authority to purchase property for development and redevelopment.

Staff framed the proposal as a response to city goals to increase net new construction and diversify the tax base. The presenter said the city aims to meet or exceed roughly 1% net new construction per year to preserve levy capacity, noting the city added about $129,000,000 in assessed value in 2024 (the presenter characterized that as roughly a 1.36% increase) and that continuing growth is important under state levy limits.

Staff used two case studies to illustrate the possible impact of proactive purchases. The first example — a property across from City Hall (200 Delafield Street) purchased in 2019 — could reach an assessed value of approximately $44,000,000 if successfully redeveloped, staff said. The second example involved two small properties on Saint Paul Avenue that sold for $300,000; staff said a private proposal had envisioned about 24 affordable units and an assessed value near $7,000,000 if that project had been built. Staff characterized the Saint Paul sale as a "missed opportunity" where a prompt authority purchase might have steered a higher‑value redevelopment.

Board members broadly supported the concept but differed on scope and safeguards. A suggestion was made to limit independent authority action to acquisitions under $2,000,000, with larger purchases requiring council approval. Several members urged strict guardrails, including environmental due diligence (phase I environmental assessments), defined maximum exposures, and expected return on investment (ROI) criteria. One member warned against quickly buying clearly polluted properties, citing sites such as the Valvoline property and the Hobson plant as examples where contamination risk could "saddle the city."

Members also discussed financing mechanisms. Staff said the authority could use existing funds (development fund and ARPA funds), structure sales to revolve proceeds into future purchases, or combine TIF assistance with sale proceeds to replenish an acquisition fund. Members debated interest rates and loan terms for subordinated financing; several said rates should be set to balance project feasibility with protecting taxpayer interests.

Directions from the meeting: staff will draft a proposed policy that incorporates feedback on guardrails and funding options, and return the draft to the Redevelopment Authority for additional comment before referral to the full council. Members also requested a projection of net new construction for the current year and an assessment of the development pipeline to inform budget discussions.

Ending: The authority asked staff to prepare a draft acquisition policy and program funding options and to present updated pipeline and valuation projections at the next meeting.