Waupaca, Green Tree Construction reach development agreement
By Angie Landsverk
Green Tree Construction will buy the remaining 29 lots in Waupaca’s Eastgate Estates Subdivision and continue building homes there as part of a development agreement with the city.
The common council unanimously approved the agreement between the city and the Stevens Point company when it met earlier this month.
All council members were present for the virtual meeting.
“Really for us, it makes a lot of sense for the return on investment,” City Administrator Aaron Jenson told the council. “I think it’s a good opportunity to take action.”
He said Green Tree Construction and CAP Services approached the city for assistance in developing the 29 lots.
CAP Services owns the lots, and previously sold 14 other lots in the subdivision to Green Tree Construction.
Green Tree Construction built a number of homes there in the past year, with more currently under construction.
Last year, the company also bought 16 city-owned lots in Woodland Estates Subdivision.
It wanted to expand into other areas of the city after seeing success selling the homes it built in Eastgate Estates.
The development agreement the council approved this month relates to both subdivisions.
In regard to Eastgate Estates, Green Tree Construction has offered CAP Services $19,000 per lot.
It has an accepted offer of $551,000, which was contingent on the developer’s agreement with the city.
As part of the agreement, the city would credit Green Tree Construction $4,000 per lot, or a total of $116,000, after 20 homes are completed within 36 months.
The city’s contribution will include the cost of sidewalk where it is required for approximately $52,807.
Jenson said that will be funded through the General Obligation borrow the council approved last year.
The city will also take back six of the 16 residential lots in Woodland Estates that Green Tree Construction bought from the city in 2020.
The company paid the city $3,500 per lot and will return the lots to the city for the same amount, resulting in a $21,000 credit.
Jenson told the council the six lots are impacted by a high voltage power line running through them.
He said there is some benefit to the city owning them again.
There is a River Ridge Trail access point there, as well as a storm water retention basin, Jenson said.
The city’s last contribution will be a sewer fund credit of $1,455 per lot for a total cost from the sewer fund of $42,193.
The cost for a residential sewer hookup is typically $3,500 per lot.
“With levy limits, economic development and net new construction is the best way we can stay sustainable into the future,” Jenson said.
Economic development
He said housing development matches what the city is trying to do with its strategic plan.
The city’s efforts related to economic development include attracting and retaining young families, as well as encouraging affordable and market rate housing.
In 2020, the city saw its largest influx in single-family construction since 2004, Jenson said.
Twenty-one building permits were issued in the city last year for single-family homes, he said.
The new homes in Eastgate Estates could be completed sooner than three years from now.
In speaking with Green Tree Construction, the company expects 20 to be up in the next 12 months, certainly in the next 18 months, Jenson said.
The developer is being given 36 months because the market and lumber costs could change, he said.
Future tax revenues
Jenson said it will not take long for this project to generate increment in Tax Incremental District No. 8, where the subdivision is located.
If a $200,000 assessed value is assumed for each new home, the minimum threshold of 20 homes would generate about $98,000 of annual increment toward paying down the district, he wrote in a memo to the mayor and council.
Once on the tax rolls, it would generate about $39,520 annually for the city, based on the current tax rate, Jenson said.
When all 29 lots are completed, it would generate about $142,100 annually in increment, with the city’s tax revenue being $57,304 annually after the district closes.
Ald. Scott Purchatzke asked Jenson why Green Tree Construction does not want to keep the Woodland Estates lots.
“They weren’t getting as much interest in those lots,” Jenson responded.
That subdivision is more built out, and they saw an opportunity in Eastgate Estates, he said.
Mayor Brian Smith said Eastgate Estates is filling up nicely.
He sees the agreement with Green Tree Construction as a win for both the city and the developer.