Oconomowoc - Waukesha County Executive Dan Vrakas is to unveil today an agreement on a $25 million freeway interchange deemed crucial to the development of a large upscale shopping center at Pabst Farms.
Debate over who would pay for the interchange had cast doubt over whether it would be built.
But Vrakas is to announce that he worked out the agreement to share the cost of building a full diamond interchange, complete with four roundabouts, at I-94 and county Highway P in far western Waukesha County. It would funnel shoppers into the mall.
"This development with a major national mall coming in would be a huge economic center for western Waukesha County," Vrakas said.
"I'm proposing to partner with the state, the City of Oconomowoc, as well as the developer to handle the safe movement of vehicles out there."
The agreement calls for the county and Pabst Farms Development Inc., owner and manager of the 1,500-acre development near I-94 and Highway 67, to contribute $1.75 million each toward the interchange project.
Another $400,000 would come out of city property tax revenue paid by stores and other commercial and industrial buildings built at Pabst Farms. That revenue would be segregated, until all project costs are paid for, in a fund to be used for public improvements in the Pabst Farms tax incremental financing district.
The rest of the funding for the interchange would come from the state Department of Transportation, out of its Southeast Freeway Rehabilitation Program, said Dewayne Johnson, director of the Southeast Region of the department.
"We're pretty encouraged with the cooperation going on and with people talking about how to deal cooperatively to advance the schedule for building the interchange," he said.
'It will pay off'
Norm Cummings, Waukesha County director of administration, said construction of the interchange is crucial for mall developers.
"Before the developer will agree to come here, they needed assurance that there is a safe interchange to get customers there," he said.
The potential economic benefits of the mall to the county, the city and the state were lucrative enough to get all the parties to the table to work out a plan to pay for construction of the interchange, he said.
State sales tax revenue from the mall has been estimated at $15 million a year. The city, the county and the Oconomowoc School District would reap the rewards of an increased property tax base. And the revenue should come sooner than expected, with the end of the Pabst Farms tax incremental financing program anticipated in 2014 or 2015, a year earlier than originally planned.
"It will pay off for the county, for the city, and there's no question it will pay off for the state," Cummings said of the mall.
The county's share of the interchange cost would be paid out of surplus funds accumulated the last five years from savings on capital projects, he said, noting that no new county taxes are needed to pay for the interchange. He also said that no projects have been scrapped or put on hold as a result of designating funds for the interchange.
After General Growth Properties announced plans last year for the 184-acre, 1 million-square-foot Pabst Farms Town Centre, intended to attract shoppers from a broad swath of Wisconsin, local and state officials scrambled to design and figure out how to pay for the interchange.
In the 1990s, department analysts projected an expansion of the I-94/Highway P interchange for 2012.
Last month, during a public information meeting on the interchange project, department officials said that if funding was approved, construction could start in the spring and be completed in 2010. Developers have said the mall could open in the fall of 2010.
"For years, we have known there would be development out there; what has accelerated is the size and scope of the development," Richard Bolte, county public works director, said of the mall.