HomeMy WebLinkAbout34. 15-352
JULY 14, 2015 15-352 RESOLUTION
(CARRIED ___7-0___ LOST _______ LAID OVER _______ WITHDRAWN_______)
PURPOSE: AUTHORIZE GRANT APPLICATION TO WISCONSIN
ECONOMIC DEVELOPMENT CORPORATION & AUTHORIZE
AGREEMENT FOR GRANT ADMINISTRATION WITH
FIRSTMERIT BANK AND MARTIN COWIE FOR DEMOLITION
AT 1118 SOUTH MAIN STREET (FORMER BUCKSTAFF
PROPERTY)
INITATED BY: CITY ADMINISTRATION
WHEREAS, the former main factory site for the Buckstaff Company, located at
1118 South Main Street, has become dilapidated, lacks sufficient fire protection and has
become a public nuisance; and,
WHEREAS, the City of Oshkosh has filed a court action to seek to remedy the
conditions on the site; and
WHEREAS, the successor to the mortgage holder on the property, FirstMerit
Bank N.A. (“FirstMerit”), is willing to work with the City to mitigate and correct the
nuisance conditions on the property by removal of the buildings; and
WHEREAS, as part of the settlement of the dispute between all the parties,
FirstMerit will assist in facilitating the transfer of the property to the City of Oshkosh; and
WHEREAS, in consideration of FirstMerit’s actions, obtaining title to the property
and removal of the nuisance conditions from the property, the City seeks to apply for
and maximize funding for demolition of the structures and clearing of the site; and
WHEREAS, Wisconsin Economic Development Corporation has funding
available for such purposes and the City is an eligible recipient for such funds; and
WHEREAS, any matching funds required for the grant will be provided by
FirstMerit pursuant to a settlement agreement.
NOW, THEREFORE, BE IT RESOLVED by the Common Council for the City of
Oshkosh that City Manager Mark A. Rohloff and/or Community Development Director
Allen Davis are hereby authorized and directed to act on behalf of the City of Oshkosh
to complete an application for Site Assessment Grant (SAG) funds from Wisconsin
Economic Development Corporation (WEDC) for the purpose of assessment, demolition
and any authorized purpose under the terms of the grant for the property located at
1118 South Main Street in the City of Oshkosh (the former Buckstaff Property).
JULY 14, 2015 15-352 RESOLUTION
CONTD
BE IT FURTHER RESOLVED that if an award is made to the City, the
appropriate city officials are hereby authorized to accept such funds, sign documents,
enter into appropriate agreements as necessary for grant administration with FirstMerit
and Martin Cowie and to take all necessary action to comply with the award subject to
settlement of the pending litigation pertaining to the property.
CITV HALL
215 Church Avenue
PD.BOx 1130
Oshkosh. Wiscansm
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TO: Honorable Mayor and Members of the Common Council
and City of Oshkosh Redevelopment Authority
FROM: Lynn A. Lorenson, City Attorney
Allen Davis, Director of Community Development
DATE: July 9, 2015
RE: AUTHORIZE GRANT APPLICATION TO WISCONSIN ECONOMIC
DEVELOPMENT CORPORATION AND AUTHORIZE AGREEMENT FOR
GRANT ADMINISTRATION WITH FIRSTMERIT BANK AND MARTIN
COWIE FOR DEMOLITION AT 1118 SOUTH MAIN STREET (FORMER
BUCKSTAFF PROPERTY)
BACKGROUND
In February 2011, foreclosure proceedings were brought against the properties
operated by the Buckstaff Company. The Buckstaff Company stopped doing business
at the site in March of 2011. Three separate parcels were involved in the foreclosure
process, the main factory property located at 1118 South Main Street, and two smaller
parcels used for office and retail purposes. The Bank completed all steps in the
foreclosure process for the two smaller properties and has disposed of those properties
to third parties. The main factory property has significant costs associated with
demolition and it has remained in a more uncertain legal status since the
commencement of the foreclosure.
In March, 2013 the City of Oshkosh filed suit related to the nuisance conditions on the
property. The original bank holding the mortgage was purchased by FirstMerit Bank
and the City and FirstMerit participated in mediation with the federal magistrate in May
of 2014. A general outline for settlement was proposed and the City and FirstMerit have
been working toward settlement of this matter since that time.
The general outline of the settlement toward which the parties have been working would
conclude with the City taking title to the property. FirstMerit would pay some amount
toward the removal of the buildings on the property which would address the City's
concerns related to potential fire hazards and in consideration of this and obtaining title
to the property the City would use its ability to apply for certain grant funding to defray
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the costs of demolition, take responsibility for the removal of the slabs beneath the
buildings, seek a local governmental unit liability exemption in relation to environmental
issues on the site and work with the other local units of government to forgive
outstanding real estate taxes on the site.
ANALYSIS
While the City continues to work with the attorneys for FirstMerit Bank toward a full
settlement of the issues surrounding the former Buckstaff property at 1118 South Main
Street, an important part of resolving those issues relates to the cost of demolition of the
remaining factory buildings. Identifying potential sources of funding to be applied to
demolition helps to move both parties toward a resolution of all of the issues
surrounding this site. The representatives from WEDC expressed enthusiasm for the
proposed project and city staff has begun a preliminary process of identifying potential
reuses for the site if the City takes title to the property as contemplated by the current
settlement discussions. Any matching funds required for the grants will be provided by
FirstMerit.
City staff met with representatives of Wisconsin Economic Development Corporation
(WEDC) and the Department of Natural Resources (WDNR) to identify potential grant
funding for the site. WEDC has identified grant funding that would be available to assist
with the demolition process as proposed in the settlement. In order to apply for the
maximum available grant funding, the property will be divided into two separate parcels
allowing the City to apply for one grant in the amount of $150,000 and the RDA to also
apply for a grant in the same amount, making the total available $300,000.
City staff is seeking authorization from the Common Council and the RDA to move
forward with the grant application process and development of a grant administration
agreement with FirstMerit and Martin Cowie, who had owned and operated the
Buckstaff company.
FISCAL IMPACT
The City will incur costs to divide the parcel, prepare the grant applications and to
administer the grants if they are awarded. Although the City will incur some cost in
relation to division of the site by CSM and will have the applications reviewed by outside
counsel who have been assisting with the Buckstaff litigation, the majority of the costs
for application and administration will be internal city costs for city staff time. The City
would apply for two $150,000 grants for the property which would be applied to reduce
the demolition costs on the site and which would facilitate settlement of the current
litigation. The litigation costs related to this matter have exceeded $100,000 to date and
would increase should a settlement not be reached.
RECOMMENDATION
Authorizing staff to proceed with the applications at this time gives the City the best
potential to both receive grant funding at the beginning of a new grant cycle and to
resolve the outstanding issues between the parties related to this site. Settlement
would also afford the City the opportunity to own and control the site for potential future
public use or redevelopment. Staff recommends approval of the Resolution.
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Allen Davis
Director of Community Development
Approved:
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Mark A. Rohloff
City Manager