Wisconsin city buys a $6 million quarry

The City of Verona, WI  is the new owner of a quarry. The Common Council voted Monday night to purchase the former Wingra Stone gravel pit for just over $6 million.

Much of that money will come from the remaining allocation for the Epic tax-increment financing district, and Epic is expected pay for some of it, as well, but those details have yet to be worked out.

The city has been planning for quite some time to purchase right-of-way for the expansion and relocation of North Nine Mound Road, but the decision to buy the entire 78.5-acre property was relatively new, after Epic and city staff realized it could solve several problems for both entities at once.

The giant health-care software company, which has a billion-dollar facility on about 900 acres just across Nine Mound from the pit, has been amassing mountains of fill material in excavations for its five parking garages, its massive Deep Space auditorium and other construction projects, and now it will have a place to dump that material without having to pay exorbitant transportation fees.

At the same time, the city has been looking for a new dump site now that Purple Cow Organics has decided to sell its recycling center on the southern edge of the city.

Underlying all of that is the fact that used quarries have a tendency to either continue being eyesores or become man-made lakes, such as is the case with Fireman’s Park and two other lakes on private property to its east and west. Filling it in would offer up many more possibilities for a piece of land that is getting closer and closer to being in the center of urbanization.

“I think the way it was explained to us is this is a win-win for Epic and also the city,” Mayor Jon Hochkammer told the Press after the meeting.

Unusual deal
It’s a strange and interesting deal, but perhaps the strangest part of it is the fact that not a single politician or staffer who was present after Monday’s meeting could fully explain it. That is partly because it hasn’t been fully negotiated yet.

Just as with the last deal the city worked out with Epic – which led to the city contributing its last remaining TIF allocation to the Nine Mile Road reconstruction, the two sides are still negotiating details and might change them as they go along. But there was no hesitation, as the vote to authorize staff to complete the closing passed 7-0, with Epic employee Luke Diaz abstaining and no council comment.

In fact, the only public discussion on the matter has been city attorney Bryan Kleinmaier’s brief summary to the council Monday of the reasons for an unusually worded motion he supplied for alders to make, in order to satisfy the title company for Tuesday’s closing of escrow.

He noted that the purchase price is $80,000 per acre and later told the Press the full price would be $6,043,360, which represents 75.5 acres, even though the city will now be in control of an 80-acre piece because of some complicated existing right-of-way deals.

The Nine Mound project requires 18 acres of right-of-way on the property.

The city budgeted $5 million for its part of the reconstruction of Nine Mound in 2015, with the understanding that Epic would accept responsibility for the rest but no specific plan for how it would be spent.

The city’s portion, rather, represents that remaining allocation in the original project plan approved by a joint review board more than a decade ago, and the roughly $12 million project is needed for adequate traffic flow for the company’s 9,000 employees. It therefore would have been difficult to make a case to a JRB that any further spending on Epic would pass the “but for” test.

How the city got to that point is another odd tale, but the gist is that the original developer agreement committed the city to pay for an underground parking garage for Campus 2, and instead of being on the hook for half of that roughly $40 million project, the city agreed to put the remaining $10 million or so from its project plan toward public works projects like roads and the well and reservoir that serve Epic and the west side of the city.

What now
After Tuesday’s closing, Epic and the city were expected to continue discussing how to divide up the property, which has technically been considered an active quarry site for legal reasons but hasn’t been busy in some time.

That’s a similar situation to the city’s dump site along South Main Street, which has been full for years but has been kept open for temporary use because there are no alternatives.

How the money will be allocated remains to be seen, because it goes beyond the original scope of the Nine Mound Road reconstruction and no money has been budgeted yet for the purchase of a dump site.

Public works director Ron Rieder said he has proposed about $1.5 million in his 2016 budget to buy about 20 acres for both storage and a processing area that Purple Cow could come pick up from and haul to its East Side facility. That could not be stay as a charge to the TIF district, as it isn’t directly affecting that development.

One way or another, Epic is expected to somehow pay for its use of the remaining approximately 35 acres. Whether that comes in a purchase, tipping fees or some other financial arrangement has not been determined.

It’s notable that the purchase price of $80,000 per acre is not cheap for a use like a dump site – open farmland costs tends to sell for closer to $10,000 an acre. However, it’s ready to use as a dump site and it probably won’t be long before there’s demand for land in that area.

To the east is the majority of Verona’s North Neighborhood, which is being prepared for development, and a mile to the north, Madison is preparing the Pioneer-Midtown area for development. The town is considering additional housing along Shady Oak Lane, as well, and of course, Epic continues to grow to the west of the quarry.

City leaders appear to have faith that the plan worked out by staff will end up in Verona’s favor. Ald Evan Touchett (Dist. 4) said after the meeting that Verona’s relationship with Epic is “unique” and the city will benefit from this as it has from every other dealing with the company.

“It solves a bunch of problems,” he said.


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