Negotiations on subdivision hit a bump

Negotiations between the Fredonia Village Board and the owner of Hillcrest Builders, which has proposed a 100-home development on the village’s north side, have hit a snag.

That’s because trustees have expressed concern the village is accepting more risk than Hillcrest and needs additional protections in case the development falls through.

Hillcrest owner Oyvind Solvang has proposed that the village essentially operate as the project’s bank, borrowing money at a lower interest rate than he can to create a fund from which he can draw to pay for infrastructure and then pay back as homes and lots are sold.

It’s an arrangement Solvang said he has used in other municipalities on previous projects.

But some trustees wonder what would happen if the project fails, as has happened with three other development proposals in the village during the last 25 years.

That prompted them to ask Solvang for an undefined “personal guarantee” to protect the village’s investment.

“In the end, we have to protect our taxpayers,” Trustee Richard Abegglen said.

Their proposal seemed to stun Solvang.

“That was totally unexpected,” Solvang said at a Dec. 1 Finance Committee meeting when he was first told of the idea.

Solvang said he sees the village and him as partners in the project.

“I believe in Fredonia,” he said. “But I feel we don’t have an understanding. I don’t see how this moves forward.

“Guarantee the whole project? That’s not really risk sharing.”

Village President Don Dohrwardt  acknowledged that trustees didn’t have a precise idea of what the guarantee would look like.

“It might be as simple as giving the village ownership of engineering and design plans,” Dohrwardt said. “I’m still confident we can work this out because the village needs this.”

Meanwhile, Hillcrest is tweaking its proposed phases to reduce costs early on as the village likely will only be able to borrow $1 million next year.

That likely means that duplex condominiums that were proposed for the eastern end of the project, north of the Northern Ozaukee School District campus, would be shifted west to lower infrastructure costs and increase the number of home sales, the Village Board was told last week.

No action was taken by the board.