City’s Fiserv Subsidy Includes Vel Phillips Plaza Funding, Michigan Street Upgrades
Relocation job target is 780 jobs within four years. Includes rules around work from home policies, bonuses for city residents.
The city’s portion of a proposed subsidy agreement to bring financial technology firm Fiserv’s headquarters to downtown Milwaukee includes a $7 million cash grant. It also includes $4.6 million for nearby projects, including the development of a plaza honoring a Wisconsin civil rights leader, traffic calming improvements to W. Michigan St. and improvements to Zeidler Union Square.
Fiserv would lease 144,000 square feet of space in the eight-story HUB640 building at the corner of W. Wisconsin Ave. and N. Vel R. Phillips Ave. and invest at least $37 million into the project. In exchange for bringing a minimum of 780 employees to the space, the city would provide the company a $7 million cash grant. The state, via the Wisconsin Economic Development Corporation, would also contribute a currently undisclosed subsidy.
The money for the city’s grant and nearby public improvements would come from increased property tax revenue from the building. Long home to a Boston Store department store and parent company Bon-Ton’s corporate headquarters, the business went bankrupt in 2018. New owner North Wells Capital recently landed a Kohl’s department store for the first floor, a handful of smaller office tenants and now Brookfield-based Fiserv.
The city would create a new tax incremental financing (TIF) district to capture the increased revenue.
The agreement is structured as a developer-financed TIF district. The city would effectively rebate increased property tax revenue from the development over a period of no more than 20 years. Fiserv would be eligible to collect up to $7 million plus 4.5% interest. Unlike a traditional TIF district, the agreement places no risk on the city if the development fails to yield the expected increase in property tax revenue. The existing property tax revenue from the property would continue to flow to the city and other property taxing entities under the proposal, with only the increase diverted.
A full-time employee is defined as any employee that works at least 35 hours per week, receives healthcare benefits and is paid more than 150% of the federal minimum wage. Workday occupancy at the facility must be at least 60% of the reported full-time employee count. Similar to the Milwaukee Tool agreement, Fiserv can count employees who live in the city but work from other facilities or at home as part of the total.
Failure to reach the minimum employment threshold would result in a proportional reduction in the subsidy.
All janitorial, security and food service workers must be paid at least $15 per hour in accordance with a 2019 council resolution.
The TIF term sheet says Fiserv is expected to relocate employees working in finance, communications, IT, product development, human resources, benefits and legal functions.
The project plan calls for Fiserv to start construction by June 2023 and substantially complete work by the end of 2024.
The initial project budget calls for all of the costs to be paid off by year 16 of the district. The building, legally three condominiums, is expected to climb in assessed value from $26.4 million to $59.6 million. Included in the district is the 74-unit apartment building at the top of the building. Developed by the Mandel Group nearly two decades ago, North Wells now owns the units.
The district is subject to approval by the Joint Review Board of property tax entities, the Redevelopment Authority of the City of Milwaukee and the Common Council.
Fiserv’s relocation, the Kohl’s store and other property improvements are expected to also create enough revenue to advance a number of other nearby projects.
The city would spend $2.5 million to make improvements to make W. Michigan St. between the Milwaukee River and N. 6th St. Fiserv’s front door is expected to face the street. Improvements include traffic calming elements, an all-ages bike facility, new pavement, street trees, landscaping, signals, street lighting and stormwater features.
A total of $750,000 would be allocated to the partial development of Vel Phillips Plaza on the city-owned parking lot a block west of the development. Initially proposed in 2019 as part of a proposal to extend the streetcar system, the plaza would now first move forward without the transit improvement. At the time, the full plaza was estimated to cost $5 million. The city is seeking a private developer to construct a structure on the remainder of the site.
The public improvements also include $1 million for streetscaping improvements around HUB640, executed by North Wells Capital and advanced on a reimbursement basis.
Milwaukee County would receive $100,000 to make improvements to Zeidler Union Square, which is immediately south of HUB640.
Approximately $75,000 would be allocated to improvements to the intersection of N. 6th St. and W. Michigan St. The proposal includes removing high-speed turn lanes and adding traffic calming elements and pavement. The intersection is to see its traffic volume increase with the redevelopment of The Avenue, Milwaukee Tool and Fiserv’s relocation and the proposed Iron District.
Additionally, $175,000 would be placed in a public improvements contingency fund.
A copy of the proposed TIF district authorization document is available on Urban Milwaukee.
HUB640 Redevelopment Photos
2019 Vel Phillips Plaza Renderings
HUB640 Aerial Photos
Former Boston Store
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Read more about Fiserv Relocation here