New Blues Factory deal waives key deadline

Council OKs revised agreement that gives developer infinite amount of time to start controversial Port project

THE WEST END of the proposed Blues Factory would resemble the Wisconsin Chair Co. building that once stood on the site. The firm was the parent company of Paramount Records, whose blues recordings have a worldwide following.
By 
KRISTYN HALBIG ZIEHM
Ozaukee Press Staff

The Port Washington Common Council on Tuesday approved an amendment to the developer’s agreement for the proposed Blues Factory that eliminates deadlines for construction of the entertainment complex  but requires it to be redesigned to accommodate a condominium project on neighboring property.

The agreement, which reflect changes approved by aldermen last month, was approved on a 5-2 vote with aldermen John Sigwart and Mike Gasper, who have said they believe the city should impose some sort of the deadline on developer Gertjan van den Broek, dissenting.

Gasper said he is concerned that the lack of a deadline for the Blues Factory would impede redevelopment of other neighboring properties, specifically the former grocery store portion of the Port Harbor Center owned by Jim Vollmar and Don Voigt and their wives and the former Dairy Queen building owned by Port State Bank.

“If this project (the Blues Factory) lingers for several years, those are going to as well,” he said. 

City Administrator Mark Grams noted that any development of the Dairy Queen building would be affected more by development on the former grocery store than by the Blues Factory.

Ald. Mike Ehrlich said Vollmar and Voigt have “held the city hostage for 25 years,” noting they have made repeated promises to redevelop their property.

“I don’t think we owe them anything,” he said.

Ald. Paul Neumyer agreed, saying Vollmar and Voigt “could have done something years ago.

“I think it’s disingenuous for them to blame Gertjan,” he said.

The shopping center owners actually held the Blues Factory development up, Neumyer said, noting van den Broek was prepared to move ahead last year when they city asked him to work with Vollmar and Voigt to try and accommodate a plan to convert the former grocery store into condominiums.

The amendment to the developer’s agreement approved Tuesday reflects those accommodations, aldermen noted, since it requires the Blues Factory to be moved five feet to the east and to have a corner of the building clipped at an angle, which would allow the condo owners to have lake views.

The amendment also requires van den Broek to place a no-build easement on the space between the Blues Factory and the former grocery store. 

“We’re adjusting the design of our building to allow them to build the building they presented to the city,” van den Broek said.

The amendment also calls for Tri City National Bank, which holds the mortgage on the property, to provide the city with a letter by May 15 agreeing that if van den Broek were to try and sell the former north marina slip parking lot or if the bank were to foreclose on it, the city could buy it back for $250,000 — the same amount van den Broek paid for it.

“Like kids say, you’ve got first dibs on it,” City Attorney Eric Eberhardt said.

If the city doesn’t receive that letter, the amended agreement is moot, Eberhardt said, and van den Broek will have 180 days to begin substantial construction or the city can buy the land back. 

Ald. Pat Tearney said the fact that the city can buy the land back provides an incentive for van den Broek to begin construction, noting that a typical developer figures that if they don’t build, they can sell the land for a profit. Van den Broek can’t, he said.

“That puts a little pressure on Gertjan to move ahead with this project and not sit on it for five years,” Tearney said.

The city’s tax incremental financing district, which could provide as much as $1 million in incentives for the Blues Factory, will also run out eventually, Ehrlich said. If van den Broek wants to take advantage of it, he has to move relatively quickly.

The amended developer’s agreement also has benefits for the city, Eberhardt said.

The original agreement called for the city to have completed work on the tie backs that stabilize the north marina parking lot, which van den Broek purchased from the city for the Blues Factory, by Wednesday, he said.

“While it is substantially complete, there are some outstanding issues,” he noted, and the amended agreement moves that deadline to May 16 to accommodate them.

In addition, it changes the date when the city has to move a power line under the parking lot, Eberhardt said.

Ald. John Sigwart questioned what would be done with the Blues Factory site until the development is constructed, noting that this could take years.

The city should negotiate an agreement with van den Broek outlining what can be done with the land until construction begins, Sigwart said, especially since it has been used for such events as Pirate Fest and Fish Day in the past.

“I think there should be some understanding,” he said. 

But Ald. Dan Benning said that’s a matter between van den Broek and the groups who want to use the property.

“I don’t know what value we would add being in the middle,” he said.

Van den Broek told the council he would consider requests on a case-by-case basis, noting there are issues of liability that need to be considered.

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