The Menomonee Falls Village Board on Monday approved a developer’s agreement that will provide tax incremental financing assistance for the construction of a new 33,000-square-foot Ascension Wisconsin health center and small-scale inpatient hospital.
Milwaukee-based Cobalt Partners LLC is developing the two-story Ascension health center on a portion of the former Ernie von Schledorn auto dealership site, at N88 W14167 Main St.
According to the agreement, Cobalt expects to spend at least $20 million on the project. In turn, the village will rebate Cobalt 70% of new incremental value generated each year. With a cap of 15%, and assuming the development is assessed at $20 million, that would amount to $2.8 million in tax incremental financing, or TIF, assistance from the village, said Mark Fitzgerald, Menomonee Falls village manager.
However, that dollar amount isn’t a certainty. Fitzgerald noted the actual village assistance will depend on the assessed value of the project once it’s fully built.
Village Board members approved the TIF assistance Monday evening on a 4-3 vote, Fitzgerald said.
Cobalt requested the TIF assistance to help cover costs such as addressing floodplain delineation impacts, moving utilities and other public road and infrastructure work, according to the agreement.
Fitzgerald said that, unlike a more “traditional” TIF agreement in which costs would go directly toward that work, the developer is paying for those costs up front and will be reimbursed later as additional value in the property is generated.
Scott Yauck, Cobalt Partners president and chief executive officer, said his firm originally did not ask for village assistance on the project. However, his firm later learned the Wisconsin Department of Natural Resources and Federal Emergency Management Agency were in the process of remapping of flood zones in the area, including at the former EVS site.
The new mapping would have likely rendered the site unbuildable, he said. This meant Cobalt had to expedite the demolition, utility relocation and related work.
“Those costs are sort of prototypical (tax-financing district)-type costs, and weren’t in our budget,” Yauck said.
The first floor of the Ascension building will house a 16,500-square-foot small-scale hospital with emergency services and eight inpatient beds, while the second floor of the center will include a 16,500-square foot primary and specialty care clinic.
Yauck said construction is slated to begin in April, and would take approximately 18 months to finish.
The Ascension project is the first phase of Cobalt’s planned redevelopment of the 20-acre site. The developer first announced in fall 2017 it was purchasing the former dealership with plans to redevelop it into an office campus.
Yauck said his firm is still working out plans for what the rest of the site will look like, though it will likely be developed for office use. He added that the Main Street corridor doesn’t need more retail, given other nearby retail sites, such as Cobalt’s Whitestone Station, a mixed-use development along Falls Parkway between Water Street and Pilgrim Road.
Fitzgerald said the Ascension project should mark the start of further development in the area. In anticipation of further developing this portion of Main Street, the village amended the original tax incremental district (TID) in 2018 to extend its borders further east of Fountain Boulevard, which is where the TID originally ended.
He said this was a “prime area for redevelopment, and this (Ascension project) becomes the first established marker for this area.”
