100 N. Main in arrears but close to signing restaurant
Copyright 2005, Oshkosh Community News Network. Please credit.
The developers of the mixed-use building at 100 North Main have fallen more than $150,000 behind in city property taxes but expect to announce new commercial tenants--including an Italian restuarant--that will help them put the project back on track.
In a Feb. 22 letter to the city, developer Ben Ganther said the owners of the building would make their first quarter payment to the city by March 15 and clear up the outstanding taxes by Sept. 15.
"Next week we plan to announce the signing of our first retail tenant and we are in ongoing negotiations with a possible first floor restaurant tenant," Ganther added.
In an interview with Oshkosh News, Ganther said he was not at liberty to identify the new tenants. But he described them as a "national media company" and a "Northern Italian/Tuscan" restaurant.
Ganther's letter, addressed to Community Development Director Jackson Kinney, said attracting residential tenants to the downtown structure had proven more difficult than expected "due to a local overbuilt apartment inventory and a low home mortgage interest rate environment."
"Today 100 North Main stands with a 72 percent occupancy and 82 percent when including apartments with deposits on our waiting list," Ganther wrote. "We are on track to have full occupancy by June 1, 2005."
The city's online assessment records, which are sometimes out of date, indicate that the owners of 100 North Main owe $157,640.58 in 2004 property taxes and $68,043.96 in 2003 taxes.
But Winnebago County, which assumes responsibility for collecting taxes after July, said the 2003 taxes have been paid in full.
Ganther said the county transfers funds to cover unpaid taxes to the city when it takes over the collections process. "I don't see that the city is at any risk," Ganther said.
He noted that the project could get caught up in the current election campaigns for mayor and Council and could be used by critics of development and specifically of tax-increment financing.
To avoid that Ganther said that he had tried to keep city officials and at least some politicians abreast of what was happening with the project.
"I have informed most of the Council members and some of the candidates of what's going on," he said.
Ganther's letter to the city detailed some of the rental concessions that the project has made to attract residents.
Weak market conditions "created the need for our rates to be dropped $200.00 per apartment below our original pro-forma projections in order to be competitive in the Oshkosh rental market," Ganther wrote.
"To speed the lease-up period to 95 percent occupancy, we also have included two months free rent for each lease signed," he added.
"These factors and the length of time it has taken to sign the first lease in the retail space caused the 100 Block LLC to make the business decision to defer our real estate tax payment."
The developers of the mixed-use building at 100 North Main have fallen more than $150,000 behind in city property taxes but expect to announce new commercial tenants--including an Italian restuarant--that will help them put the project back on track.
In a Feb. 22 letter to the city, developer Ben Ganther said the owners of the building would make their first quarter payment to the city by March 15 and clear up the outstanding taxes by Sept. 15.
"Next week we plan to announce the signing of our first retail tenant and we are in ongoing negotiations with a possible first floor restaurant tenant," Ganther added.
In an interview with Oshkosh News, Ganther said he was not at liberty to identify the new tenants. But he described them as a "national media company" and a "Northern Italian/Tuscan" restaurant.
Ganther's letter, addressed to Community Development Director Jackson Kinney, said attracting residential tenants to the downtown structure had proven more difficult than expected "due to a local overbuilt apartment inventory and a low home mortgage interest rate environment."
"Today 100 North Main stands with a 72 percent occupancy and 82 percent when including apartments with deposits on our waiting list," Ganther wrote. "We are on track to have full occupancy by June 1, 2005."
The city's online assessment records, which are sometimes out of date, indicate that the owners of 100 North Main owe $157,640.58 in 2004 property taxes and $68,043.96 in 2003 taxes.
But Winnebago County, which assumes responsibility for collecting taxes after July, said the 2003 taxes have been paid in full.
Ganther said the county transfers funds to cover unpaid taxes to the city when it takes over the collections process. "I don't see that the city is at any risk," Ganther said.
He noted that the project could get caught up in the current election campaigns for mayor and Council and could be used by critics of development and specifically of tax-increment financing.
To avoid that Ganther said that he had tried to keep city officials and at least some politicians abreast of what was happening with the project.
"I have informed most of the Council members and some of the candidates of what's going on," he said.
Ganther's letter to the city detailed some of the rental concessions that the project has made to attract residents.
Weak market conditions "created the need for our rates to be dropped $200.00 per apartment below our original pro-forma projections in order to be competitive in the Oshkosh rental market," Ganther wrote.
"To speed the lease-up period to 95 percent occupancy, we also have included two months free rent for each lease signed," he added.
"These factors and the length of time it has taken to sign the first lease in the retail space caused the 100 Block LLC to make the business decision to defer our real estate tax payment."
7 Comments:
I must have been one of the Council members, and candidates, that Mr.
Ganther missed in his explanation of what was/is going on. Perhaps my opponent was informed on the golf course of the situation.
I certainly hope that the 100 block will continue to get new tenants so
the tax bill can be paid. I would hate to see the residents of Winnebago County have to pay for delinquent taxes on this project.
-Paul Esslinger
It is unfortunate that Ben Ganther has not made his tax payments timely. However, he has made plans to make payment by March 15 and then final payments by September 15, including any penalties and interest charges. I do not believe one misstep should be an indicator for future shortfall. Ben Ganther has made adjustments to his original plan and for that he should be commended. I am confident this situation will be taken care of in a timely manner and should not reflect negatively on future downtown development.
Regards,
Meredith Scheuermann
Comments for 100 N Main st Building.
1-I read that it has a 72% occupancy, with a waiting list by deposits for 82% occupancy. My question is, how do you have a waiting list when the place isn't full. I don't see a No Vacancy sign on the place when you come over the Main St Bridge!!
2-Mr Ganther says, that he has informed most of the council members of this information. Well I haven't recieved a word!!!
3-When I see something in the Lower Level and open, along with taxes all paid up, I will believe it, otherwise I'm sorry but I don't not at this time. Bring the prices down to the level of Oshkosh Tenants and then maybe you would fill the place up, but not with the current prices. This is just another reasson why back a few months ago, I had voted no for the new high rise apartment buildings there are going to go up in the redevelopment area off of Pearl and Dawes streets area.
Also Mr Ganther was given a liquor lisence for the 100 block which is still vacant. I believe that will be coming up very soon, and if nothing there to use it then it will be that much hardere to attract a restaurant style business to this location.
Sincerely,
Brian Poeschl
City Councilman
First I find it both interesting and insulting that Mr. Ganther can have the nerve to accept the city's creation of a TIF district; develop a property that to date has not yet met his promises made to the city; then go in arrears on property taxes in two different tax years (even though 2003's taxes have supposedly now been paid); and finally ONLY inform, as he puts it "most of the Council members and some of the candidates" about what's going on. Shame on Mr. Ganther. He had a duty to inform all the council members and if he was going to inform some of the candidates, then he should have informed all of them. But he chose not to. In reality, since a TIF district was created for him and because he is cheating all the city out of the benefit of having his tax money, he owes an explanation to all citizens, not just a select few.
I am confused why Mr. Ganther has a waiting list, however, if he is not at 100 percent occupancy. It doesn't seem to make much sense, at least at first glance. But this kind of thing is precisely why greater attention needs to be paid to the viability of projects before a TIF is created. Talk to elected official in other communities and you will find that they make developers jump through plenty of hoops before creating a TIF for them. Moreover, those city's leaders closely examine a project's viability before creating a TIF - something our leaders don't seem too comfortable doing. Many times they don't even think it's their charge to ask questions about a project's viability. If other communities utilize this practice - and obviously to their advantage - I don't see why Oshkosh does not. I guess that's why some of our neighboring communities don't have these kinds of problems.
Jackson Kinney's own comments about an overbuilt apartment economy lend credence to the fact that project viability needs to be looked at. It is time to start making developers more accountable for their projects when a TIF is created and stop using TIF's as the only "carrot to attract a rabbit." Cheryl Hentz Candidate for Oshkosh Common Council
This is an unfortunate situation that is concerning and should be addressed. However, this one incident should not be used to misrepresent the strides being made in downtown Oshkosh. From what I read in this article, Mr. Ganther has taken appropriate steps to notify city staff of his plan to pay all owed taxes. I encourage him to make public the full payment of taxes to eliminate any public doubt and concern (e.g. another interview with Oshkosh News).
Furthermore, I am excited to read that Mr. Ganther plans to announce a new commercial tenant and restaurant for the building. This is good news for downtown and the city of Oshkosh.
Respectfully,
Bryan L. Bain, Candidate
Oshkosh Common Council
Let me preface my comments with the fact that Ben Ganther is my friend. You should be aware of some facts which may change the way the situation is viewed.
1. Real Estate Taxes are a first and paramount lien on the property. In other words, they always get paid--before the mortgage. They also bear interest @ 12% or 18% depending on the municipality which actually is double the bank rates and triple what the City or County pays for its money.
2. The property is not owned by Ben Ganther but an entity that he is a minority owner of. I don't believe that he is even the managing member.
3. These people invested over $10 million in a property that had sat vacant and become an eyesore. They took the risk. It is inconceivable that the TIF would not be paid back as the property is complete and occupied and the taxes will be paid in all events.
4. Oshkosh needs investment in order to revitalize. Prudent investment on the part of the City to spark this type of investment is, in my opinion, justified and will pay dividends to all of us in overall increased property values. If people start moving back to the City, doesn't the City gain?
5. We need to get more jobs downtown. The Miles Kimball decision to stay here needs to be encouraged. Oshkosh needs to continue to be progressive and our leaders need to have some vision as to what we want our City to be.
Paul Swanson
The tax bills go to Ben Ganther's business address. He is also a partner in the business, minority or otherwise. Those things make him a responsible party and his share of the burden is not diminshed because of his level of investment. As a lawyer, you should know that. You also said the taxes would be paid in all events. It does not look like your friend has seen to it that they are. One is measured by the company they keep Mr. Swanson. If Ben Ganther feels anger about this he needs to get his business partners on the ball and pay what they owe. Otherwise please save your gratuitous commentary for someone else. Most of us are tired of paying his freight.
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