The Merrill Common Council last Tuesday ratified a development agreement with Walmart for the construction of a new super center store across Hwy. 64 from the current Walmart.
City Administrator David Johnson said that Walmart and city staff had come up with an agreement that satisfied both parties before bringing it to the council for final action.
“This agreement represents extremely long, arduous and well thought out negotiations on the part of both parties,” said City Attorney Tom Hayden.
Walmart has contracted to purchase approximately 24 acre of vacant land on the southwest side of the Hwy. 64 and Hwy. 51 intersection. Walmart is proposing to build a 119,500 square foot super center facility on approximately 22 acres of that land. The property is zoned thoroughfare commercial. With the conditional use permit approved by the city months ago, the Walmart development is a permitted use.
The city will contribute $400,000 toward the reconstruction of the Hwy. 64 and Pine Ridge Avenue intersection. The city’s contribution will be made as a reimbursement to Walmart after the work is done. The city intends to repay itself for the contribution through tax increment from the tax increment district in which Walmart will be located.
The city was originally not going to participate in the costs of improving the intersection. However, the scope of the project changed after the Wisconsin Department of Transportation weighed in on Walmart’s plans.
According to Brady Busselman, project manager for Walmart consultant MFRA, Walmart initially budgeted $400,000-$500,000 for all off-site improvements expected at that time. That included the intersection upgrade, extension of Pine Ridge Avenue south, sidewalk extension, and a signal on the northbound Hwy. 51 off-ramp. The Wisconsin Department of Transportation responded to Walmart’s traffic impact analysis in July with a proposal for a roundabout at that intersection, which would have been far costlier than what Walmart had bargained for.
“We were looking at a total of $1.3 million,” Busselman said. “A lot of that was due to an existing safety issue unrelated to the increased traffic from the Walmart development.”
Walmart, the city and WisDOT met several times and arrived at an agreement that a reconstructed signalized intersection would be a viable solution. The current estimated cost of the intersection reconstruction is $875,000, Busselman said. Adding in other costs that are included in the development agreement (including City review/inspection fees, right-of-way purchase, and sanitary sewer escrow), the total estimate for public improvements is now at $1,717,000.
“All involved thought it was reasonable for the city to take on a portion of that,” said Mayor Bill Bialecki.
“Sooner or later that intersection needed to be replaced,” Johnson said. “It’s been a problem for 20 years. The city would have had money in it.”
Bialecki noted that the taxes paid on the new Walmart store and the Park City Credit Union building, which will be constructed at the northwest corner of the property, will quickly pay off the city’s investment. Just those two developments are projected to pay $3.3 million in taxes over the first 10 years, Bialecki said, adding that additional development is almost guaranteed to be attracted by the Walmart store.
The development agreement also includes stipulations for the design of a stormwater detention area on approximately two acres of property. It also requires a fence similar in design to the fences around the downtown municipal parking lots.
With regard to sewer improvements, Walmart is required to deposit $40,000 in an escrow account with the city to pay for 800 feet of 8’ sanitary sewer to be installed to the south city limits along South Pine Ridge Avenue to facilitate future development to the south of the Walmart property.
The agreement also includes specifications for the extension of Pine Ridge Avenue along the western boundary of the Walmart development.
Walmart will construct approximately 1,000 feet of meandering sidewalk on the south side of East Main Street from Eagle Drive to the new Walmart store.
The agreement also addresses the marketing of the current Walmart store. At least once every 60 days, Walmart is required to provide a report to the city administrator detailing their efforts to sell, lease or reopen the original store.
Bialecki said the marketing of the current store will be a joint effort between Walmart and the city. He said it will be easier to work on recruiting a new tenant to the building once a construction schedule is set for the new Walmart facility.
Busselman said the Walmart team will continue to work through the winter on finalizing permits and construction documents, with the goal of breaking ground in the spring of 2013.