Press Release -- For Immediate Release -- Wednesday, July 22, 2015
Should the City of Stoughton be Forced to Follow the Law
When Agreeing to Give $5 Million in TIF Money to WalMart?
Stoughton Forward (SF) filed a lawsuit on July 16, 2015 in Dane County Circuit Court against the City of Stoughton, Kettle Park West (KPW) LLC and WalMart (WM) Real Estate Business Trust. The lawsuit charges that the city has conducted illegal approvals and agreements related to the KPW development project.
The city and the developer have been planning a new mall anchored by a WalMart SuperCenter just west of the city for 5 years. For years the city and developer kept the name of the big box store SECRET from the public. The city intends to give the developer $5 million in Tax Incremental Financing (TIF) money because the developer says he cannot afford to do the project without such corporate welfare. The city will borrow the $5 million, using short term notes, at a cost of possibly $2 million or more in interest over a 20 or so year period to pay off the loans. The city avoided using the normal municipal bonding process because the mayor and half the alders were afraid the voters would reject the issuance of bonds. The bonding process would have been a safer and less costly method of financing the borrowing.
The community voted in a set of referendum questions last April. Sixty percent (60%) of the voters voted against the corporate welfare, 53% voted against the overall Kettle Park West project and 78% of the voted to have the city focus its efforts on re-developing Stoughton's beautiful Downtown and riverfront.
The citizen group Stoughton Forward has been actively fighting back against the KPW project for nearly two years.
Why a law suit now? The lawsuit alleges that the recently approved Amended Developer's Agreement (between the city and KPW LLC) is invalid, the city council's recent resolution to approve a three party agreement (city, KPW & WM) is invalid and the recent three party agreement itself is invalid. All are invalid because the state's Tax Incremental Financing (TIF) law requires that specific procedures be followed when a city significantly amends an approved TIF project plan (WI law Sec. 66.1105(h)).
The lawsuit alleges the changes made to the above documents meet the level of significant amendments to the TIF project plan.
These major amendments are that WalMart, the richest corporation in the world, will now receive the city's $5 million in TIF funds under the following conditions: If the KPW LLC goes bankrupt, or cannot follow thru with the construction of $5 million in public improvements for the mall, then the city will give WalMart the $5 million and WM will construct the public improvements or WM can require the city to spend the $5 million on public improvements.
These major amendments were made by Mayor Donna Olson and half the council in violation of state law requiring public notice and a public hearing before the Stoughton Planning Commission followed by review and approval of the proposed changes by the Planning Commission, the city council and the joint review board.
SF alleges that the city chose to ignore the law because Mayor Olson is unwilling to face the public scrutiny, opposition and questioning that would result if she followed the law.
Local activist Buzz Davis, treasurer of Stoughton Forward, said, "The state law is specifically written to require that the whole review process start over when the parties make significant changes to the agreements AFTER the original review and approval process is completed. For example if the amount of the TIF gift to the developer jumped from the approved $5 million to say $10 million, would the city think that is just a "minor change" not needing re-approvals? In this specific case, the city has now decided that if the developer goes belly up that is it just fine to give WalMart, world's richest corporation, $5 million in TIF money. Our attorney will argue in court that such an amendment is a "significant amendment" which, under state law, requires the re-start of the approval process."
Davis stated the mayor, council and city attorney were told of the state law requiring the restart of the approval process BEFORE they considered and approved the changes. Stoughton Forward's attorney emailed Davis. Davis emailed the mayor and council prior to the June 23, 2015 meeting. Davis then gave all officials a paper copy of the email at the meeting and outlined the email during the public comment period.
Davis said, "All such advice was disregarded.
As individuals and as governments, we must try to live under the rule of law. If we do not, we will live under the rule of political whims and power plays. And public money will be wasted.
Our city ordinances require any developer pay for the entire public infrastructure (water, sewer, electricity, gas, roads, etc.) required for any development. This ordinance has served Stoughton well for 50 years. But the state TIF law enables the city to bypass city ordinances and GIVE taxpayer money directly to a developer so he/she does not have to pay for the public infrastructure.
Would any reasonable individual say that WalMart should be given $5 million by Stoughton taxpayers to pay for these public improvements because WalMart cannot afford to pay for the improvements?"
Davis asked, "How can half the council and the mayor vote in favor of giving WalMart $5 million in corporate welfare after they have been specifically told what the law requires and they each know that the majority of community residents are against such welfare and are against the entire project? I find it astounding.
The Kettle Park West project is using borrowed government money to subsidize super wealthy WalMart. WM will then turn around and compete against our local businesses in Stoughton, Oregon, Evansville, Edgerton and McFarland. The city will have tilted the playing field in favor of WalMart which will then drive some merchants out of business leaving vacant downtown storefronts, unemployed workers and broken lives. Research has shown that for every 1 new job at a WalMart store 1 to 1.4 present retail jobs are lost. The SuperCenter is project to create 100 new jobs thus causing 100 or 140 present workers to lose their jobs. This is not community development. It's community destruction -- using public money.
I ask just what part of NO do Mayor Olson and the pro-KPW alders not understand?"
"Stoughton Forward urges citizens, who believe individuals and governments should be required to follow the law, to join them as plaintiffs in their law suit. The cost to join is zero. The cost to let Stoughton violate state laws will be substantial. We must all fight back against government corruption and corporate welfare," Davis concluded.
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