Council Okays Couture Sewer Subsidy
But this won't be a precedent for future deals, a city official says.
The Milwaukee Common Council today endorsed spending an additional $2 million on The Couture project to relocate a city-owned sewer. The 48-inch-wide pipe came as a surprise to all involved in the project and the city will spend the $2 million from a tax-incremental financing (TIF) district to relocate the sewer and avoid holding up the project.
Barrett Lo Visionary Development bought the nearly two-acre site at 909 E. Michigan St. from Milwaukee County for $500,000 in August 2016. They got a bonus with the deal when it was discovered that a 48-inch-wide combined sewer runs north-south through the length of the site near its western edge. The city will now pay to relocate the sewer to the far western edge of the site to make way for the proposed 44-story, $122 million tower known as The Couture.
How does an actively used sewer line just disappear from public record? At the council’s Zoning, Neighborhoods & Development Committee last week the city’s Senior Economic Development Specialist Dan Casanova stated “the sewer was relocated to this area when Interstate 794 was built in the 1970’s. Unfortunately when it was done, probably because it was done on public land, there was no easement recorded.”
The city will begin work to relocate the sewer this summer, finishing the project in the fall to make way for construction of The Couture. Barrett Lo, through contractor J.H. Findorff & Son Inc., began demolishing the Downtown Transit Center on the site in late 2016 and finished that work a few months ago.
The design changes associated with the relocated sewer were previously approved when the full Common Council approved a zoning change for the project on April 18th. The city and developer Rick Barrett have known about the sewer for some time, but have been finalizing plans on how to replace it.
The city will pay for the relocation with funds from TIF District #82. That district, created in 2015 to help finance the streetcar and The Couture, encompasses the 883 East office tower and site of The Couture. In addition to the $2 million for the sewer, another $49,550,000 from the TIF district will go to help finance the streetcar ($31,000,000), public amenities at The Couture ($17,500,000), TIF administration ($500,000), workforce training ($400,000) and repaving a portion of N. Astor St. ($150,000).
The TIF will be repaid from property taxes on the properties within its borders. According to Casanova, an increase in the size of The Couture (now at 312 apartments, and 1,019 parking spaces) and lower than expected interest rates will result in the debt associated with the project being paid off in 18 years. This is a year faster than previously expected. The TIF, as governed by state law, must be paid back and closed by 2042.
The city has historically not allocated TIF funds to support the relocation of publicly-owned sewers. Does this mark a change in how the city will approach other sewer relocations? A change in policy might dramatically impact future developments, including the planned Marcus Corp. headquarters at 1301 N. Water St. where a sewer intersects the site. But no so fast.
Department of City Development spokesperson Jeff Fleming told Urban Milwaukee “The Couture presented a unique situation because an easement was never entered at the Registrar of Deeds – speculation is that happened because the land was previously in government hands. So the existence of the sewer line was not identified until late in the planning process. In discussions with policy makers, the department has emphasized that this action is in no way intended to establish a new precedent.”
For more information about The Couture, including the public amenities, apartment details and a possible second tower, see our past coverage.
UPDATE: An earlier version of this article inaccurately referred to the sewer as being owned by the Metropolitan Milwaukee Sewerage District. The sewer is owned by the city.
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Read more about Couture here