City asked to fund utility extension
By Scott Bellile
A developer will construct a subdivision west of New London High School if the city pays to extend utilities to the site.
Members of the New London Finance and Personnel Committee authorized City Administrator Kent Hager to negotiate an agreement with developer Carl Romenesko on Sept. 5.
If the two reach an agreement, it will appear before the finance and personnel committee and the city council for approval.
Romenesko, of Appleton company Romenesko Developments Inc., owns a 16-acre farm property located on County Highway W, immediately west of the NLHS athletic complex and near Dawn Drive in the town of Mukwa.
If the city agrees to extend utilities to his property, then Romenesko would be required to have his property annexed into the city of New London.
Extending water and sewer lines to the property would cost the city roughly $320,000, Hager stated in a memo.
If the city were to back out, then Romenesko could keep the property on the town of Mukwa’s tax rolls, install wells and septic tanks on each lot and continue the project without New London.
At a minimum lot size of 12,500 square feet per property, Hager said at least 30 building lots could be created on the property, depending on where the wetlands are situated.
There are 3.7 acres of potential wetlands on the property, Hager said. They do not pose flooding concerns.
The city could require Romenesko to develop half of the lots within 10 years, Hager suggested.
Romenesko told the finance and personnel committee he could develop a mixture of single-family homes and duplexes. He could also shrink the sites slightly below 12,500 square feet each and maximize the subdivision to 36 properties, giving the city more housing.
Hager stated in his memo that the subdivision’s total value would be approximately $7 million, if 15 single-family homes and 15 duplexes were developed, assuming each residence were worth $215,000.
Based on the 2017 property tax mill rate, the houses would generate $166,130 in taxes per year. About $61,000 in taxes would go to the city of New London.
If the subdivision were comprised of all single-family homes, the city’s annual tax revenue from the property would be slightly lower, around $56,000, Hager stated.
Based on those amounts, the city’s payback on extending the utilities for $320,000 would be about six years, Hager wrote.
The new utility hookups probably would not gain additional customers from the surrounding properties in the future because the neighbors already have their own wells and septic tanks, Hager said.
New London Utilities would also need to extend electrical service to the subdivision, which could cost $500,000.
For those reasons, Hager called the investment on the city’s end “somewhat of a hard call.”
“We can’t spend like this a whole lot, but this would be one of those times where I think your long-term benefit is definitely better,” Hager said. “But it also drops our fund balance down. We’ve got policy about not bringing that down too far. We’re starting to bump that down.”
Hager said the city has a great relationship with Romenesko having worked with him on another subdivision on Eastridge Drive, located on the east side of New London.
“If there were anybody to do a proposal like this, it would be Carl and his company that I would prefer to work with, no doubt about it,” Hager told the finance and personnel committee. “He’s got a very good reputation, has the capabilities and he knows what he’s getting into.”
Mayor Gary Henke praised Romenesko’s work on Eastridge Drive and said the proposed subdivision could sell out in a short time because of its proximity to the high school.
“Let’s hope the economy keeps going the way it has. If it does, I think it’s going to fill up fairly quickly. If we have to wait longer, that’s fine,” Henke said. “Eventually it’s certainly going to pay off for the city in additional tax revenue and additional people being able to live here and work here. I think it’s a good project. Very frankly, I think we’d be crazy to say no.”
Romenesko said if negotiations move along quickly, he could break ground later this year or next spring.