Sturgeon Bay Approves Development Terms for Downtown Project

This drawing depicts what a planned music venue and school with apartments on the second floor will look like at the northeast corner of 3rd Avenue and Jefferson Street in Sturgeon Bay. Submitted.

The commitment would create the city’s eighth Tax Increment District

The Sturgeon Bay Common Council approved a development agreement Tuesday related to constructing a building for music performances and lessons in a vacant lot at the northeast corner of 3rd Avenue and Jefferson Street.

Shirley Weese Young, who purchased the parcel, is planning to build a two-story structure where the Moeller’s Garage auto dealership once stood. The development’s first floor will house a 6,809-square-foot music venue/school called Muse, a 1,200-square-foot outdoor patio and a 475-square-foot area for public restrooms.

The project plans also include the building’s second floor, with 6,809 square feet, having 11 studio apartments with 430-450 square feet of space each that would be leasable starting at $770 per month, plus utilities. The site will also have an exterior parking area and other amenities.

Under the terms of the development agreement, which is subject to review by the city attorney and calls for the city to create a Tax Increment District (TID) in that area, the project will have a minimum assessed value of $4 million, with the city providing $900,000 in financial assistance in 15 annual payments of $60,000.

Community development director Marty Olejniczak said property taxes paid on the new building will cover the $900,000 and also provide additional revenue that could benefit other potential projects in the district or surrounding area.

“If the TID is formed, the estimated tax increment on a $4 million project is about $90,000 [annually], based on last year’s tax rate,” he said. “The city would be responsible for a $60,000 payment back to the developer, leaving a net of $30,000 per year for other projects in the TID, or closing the TID early.”

Property taxes generated from development (i.e., tax-increment revenue) in a TID, once it is created, are able to go directly to infrastructure improvements rather than being split among the various taxing entities where a TID is located.

The development agreement calls for Young to “substantially complete” the project by Jan. 1, 2025. City administrator Josh VanLieshout said Young would not receive any incentive money unless the project is completed, with the TID being the “pay-as-you-go” variety. He said the specific boundaries for the TID, which would encompass the Muse building and be effective as of Jan. 1 of this year, have yet to be determined.

A joint review board comprising representatives of the various taxing entities in the area where the Muse building is located would need to approve the creation of the TID, which would become the eighth such district in the City of Sturgeon Bay. 

Young also asked that the city apply for a Wisconsin Economic Development Corporation Community Development Investment (CDI) grant on behalf of the project, which would be similar to the CDI grant received for the redevelopment of the former Younkers store into the Marketplace by Bliss.

Muse won’t be the first downtown project for Young, who rehabbed the former Door County Advocate building, turning the downstairs into an event space and administrative offices with restrooms for Third Avenue PlayWorks (TAP) and the second floor into three apartments.

She also oversaw the renovation of Third Avenue PlayWorks, which is now connected on the ground floor to the former Advocate building, and she owns and renovated the building across the street from TAP, which she leases for Studio 234 on the first floor and an apartment on the second.

Young said she would maintain ownership of the Muse building while leasing the programming for the music venue to a nonprofit organization.