Sturgeon Bay Council Approves Borrowing $2.45 million

The Sturgeon Bay Common Council approved a resolution last week to issue approximately $2.455 million in general-obligation promissory notes to borrow money over 10 years for a variety of capital-improvement projects in the 2022 budget.

Bradley Viegut of Baird, which put together the city’s financing plan, said the resolution authorizes securing a bond rating for the notes to be issued.

“I’ll be back at the [council’s] May 17 meeting with the award resolution, and that’s the resolution that finalizes the [interest] rates and the terms of the notes,” he said.

Viegut said the current interest-rate environment is trending upward.

“That’s really, frankly, one of the reasons you’re seeing me now in April, rather than later in the year,” he said. “Typically, the city would go through this process in September, sometimes October.”

Mayor David Ward said he expected the city would “get some sticker shock” when it financed the notes after interest rates reached historic lows during the COVID-19 pandemic.

“You have to remember the last time we did this, I think .94% might have been the interest rate, just to give you an idea of what happened,” Ward said.

Viegut said the city could expect 2.95% to 3% this time around.

“No one can predict how fast or how much rates would rise, but the Federal Reserve has clearly messaged to the market at least six rate increases this year,” he said. 

The financial figures Viegut presented estimate the city’s debt service, paid for by the property-tax levy, would increase from around $1.5 million this year to approximately $1.65 million in 2023 to finance the borrowing.

PUDs Approved on Egg Harbor Road, 8th Avenue

A Planned Unit Development (PUD) to construct 68 apartment units on the north side of Egg Harbor Road, between Tall Pines Estates and the Cherry Point Mall, received final approval last week from the Sturgeon Bay Common Council.

Cherry Point Investments plans to construct five 12-unit buildings with access to Egg Harbor Road and two four-unit buildings with access to the northern end of the property on a new road that’s being built.

The city’s plan commission recommended the final PUD, for which the developer agreed to dedicate the necessary public right-of-way to complete the road connection from Alabama Place to 12th Place, with the city to determine the exact location and dimension.

The council also approved the final PUD for S.C. Swiderski to develop a 26-unit, multifamily residential development on the former Sunset School property at 827 N. 8th Ave.

The project includes two eight-unit, two-story buildings with attached garages between Erie Street and Delaware Street, as well as four- and six-unit single-story attached buildings along 8th Avenue.

Council Changes one TID, Creates Another

The use of a tax incremental finance district (TID) on Sturgeon Bay’s west side was changed last week by the Common Council for up to one year as allowed under state law to help increase the city’s amount of available housing.

The council’s resolution authorized additional property taxes generated from development (i.e., tax increment revenue) over the next year of TID #1, to be used anywhere in the city. The TID was created in 1991 for the industrial park and will close in a year. 

The resolution directs 75% of the final increment funds to be used for affordable housing, which costs no more than 30% of a household’s gross monthly income, with the remaining 25% of the funds to be used to improve housing in general.

Community Development Director Marty Olejniczak said approximately $850,000 would be available for TID #1 by 2023.

The council also passed a resolution establishing the boundaries for creating TID #6, located on the city’s east side in the general area of Egg Harbor Road. 

Property taxes raised from additional development in the TID, once it is created, are able to go directly to pay for infrastructure improvements, rather than being split among the various taxing entities where the district is located.