(The Milwaukee Journal Sentinel posted the following article by Peter Maller on its website on May 7.)
WEST BEND, Wisc. — With a $21 million downtown redevelopment project stalled over negotiations for property owned by the Canadian National Railway Co., a spokesman for the railroad said Wednesday that his company has been acting in good faith.
“We completely believe we have negotiated in good faith on this issue, which, after all, the city came to us on, rather than us bringing this to them,” said Jack Burke, Canadian National’s assistant vice president for U.S. public affairs.
Mayor Mike Miller was wrong to make the matter public while it was being discussed privately by the city and the railroad, Burke said.
“We will continue to negotiate in private, which we think is the proper way to settle such matters,” he said.
Miller could not be reached for comment after Burke spoke on the railroad’s behalf late Wednesday afternoon.
Julie Licht, a city planner who oversees the project, said she is confident that negotiations can be amicably resolved.
“I feel positive that we’ll work things out,” Licht said. “We hope the project can move forward. It’s important to the community.”
The downtown project has been in limbo since the railroad made demands concerning property it owns in an area that the city wants developed as a site for a $3.5 million convention center.
If the convention center isn’t constructed, another developer may back out of building a $6 million hotel on a nearby parcel, Miller has said.
The railroad’s demands and other factors could drive up the overall cost of the redevelopment project by as much as $800,000, Licht said.
Canadian National and the city had verbally agreed to build a new rail yard on the city’s south side to replace the downtown yard, where the convention center would be constructed, Miller said. It was expected the deal would be a land swap, with no money changing hands, he said.
West Bend was planning to invest $1.46 million to relocate the yard, Licht said.
But then Canadian National asked for $135,000 for the downtown parcel, she said. Among other demands, the railroad is also asking the city to spend about $100,000 to build extra tracks and $150,000 to clean up polluted areas at the downtown yard, she said.
With Canadian National’s new demands, the city might not be able to recoup its investment to redevelop the area, Licht said.
The city has been working for years to establish a 12-acre redevelopment project known as the River East District. Besides a hotel and convention center, it would include 92 apartments, eight townhouses and numerous retail shops.
A plan to create a tax incremental financing district to accommodate the convention center was postponed Monday by the Common Council. The city was planning to use taxes collected in the district to repay the costs of developing infrastructure.