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Incentives Approved for Events Center at Former Pamida

The City of Sturgeon Bay will provide development incentives for the renovation of the former Pamida building at 1023 Egg Harbor Road, where an events and activity center is planned, as listed in parameters approved Tuesday by the Common Council.

The incentive parameters – which were recommended by the city’s Finance/Purchasing and Building Committee following a closed session July 25 – call for the developers, Steve Estes and Scott Virlee, to start construction on or before Sept. 1, with “substantial completion” of the project on or before July 31, 2024.

Under the parameters, the developers, who will be eligible for financial incentives totaling $211,500, must guarantee an incremental increase of $1.5 million in the property’s value to have an assessed value of at least $1.986 million. The parcel’s “base value” is now $486,000.

The guaranteed incremental value of the parcel must continue for 15 years or for the life of Tax Increment District (TID) #6, where the building is located, whichever comes earlier. If the incremental value drops below $1.5 million in any given year while the agreement is in effect, the developers/property owners would need to make a payment in lieu of taxes for the difference between $1.5 million and the actual incremental value.

The parameters call for the city to pay the developers a lump sum of $61,500 within 30 days of an occupancy permit being issued for the events and activity center. In addition, the city would provide the developers with annual payments of $10,000 for 15 years, for a total of $150,000, beginning with the first tax year following occupancy of the events and activity center.

The council last summer approved issuing a liquor license for a new business to be established in the building, but the council did not reissue the license this year because it wasn’t being used. The parameters of the agreement include the issuance of a full liquor license for the business.

The developers plan to build the events and activity center with a banquet hall and amenities such as virtual golf and ax throwing in the front of the building, and a climate-controlled storage area in the rear.

Besides the parking that currently exists to the front of the building off Egg Harbor Road, additional public parking is planned in an area to the rear along 14th Avenue, where the parameters call for the developer to clear all the vegetation and stumps by Nov. 30, with the exact work to be determined by the city engineer.

The parameters also include a provision for the developers to provide the city with a strip of land fronting North 14th Avenue at no cost. The city would use the land for public parking for all users, including customers of area businesses, completing about 50 spaces on the 911 N. 14th Ave. parcel by Oct. 1, 2024. 

Facade Changes

The former Pamida building also received approval for a facelift following action July 24 by the city’s Aesthetic Design and Site Plan Review Board. The approved facade changes include replacing the front windows and doors, painting the front brick, adding new siding with a wood look, and adding a new, 12-foot-by-9-foot glass overhead garage door.

The board deferred taking action on the project’s parking in the front of the building and the landscaping that would go with the parking lot for 12 months or until the Cobblestone Hotel – which has proposed constructing a four-story building with 62 rooms nearby, at the corner of Egg Harbor Road and 12th Avenue – comes forward with a plan that can be incorporated with the former Pamida building.

“I think the point is when Cobblestone is either a yea or a nay, that’s when we should address it,” said former mayor and current board member Thad Birmingham. “But if we approve it without any conditions placed on the parking now, we’re not going to be able to come back because it’s existing.”

Birmingham said there are currently runoff problems with the existing parking lot, and changes to the lot could improve that situation.

Community development director Marty Olejniczak said the parking area in front of the former Pamida store will not have to change in the event that the Cobblestone Hotel project is not developed because the current parking area is for a previously existing building.

If the hotel project moves forward, properties would be divided and have an effect on impervious surface ratios, Olejniczak said.

“It’s quite possible that in order to put the Cobblestone Hotel near the corner where there’s a lot of green space, some of the existing asphalt is going to have to be removed,” he said. 

The Common Council approved a development agreement in February for building the Cobblestone Hotel, which has until Dec. 31 to buy property from Estes and Virlee for the project site, or the development agreement will automatically terminate.

Under that agreement, the city would pay $1.2 million in financial incentives for the Cobblestone Hotel project, with half paid within 30 days of the issuance of an occupancy permit, and the remaining $600,000 provided in 12 annual payments of $50,000 each.

To qualify for those financial incentives – which would be paid back in property taxes that the project would generate in TID #6 – the agreement requires the Cobblestone Hotel to guarantee a minimum assessed value of $6 million as of Jan. 1, 2025.