City Delays Proposed $1.1 Million Payment to Weber Group

By Eric Timmons

The La Crosse Common Council on Thursday voted to delay a payment that could reach $1.1 million to Don Weber’s development group as an incentive for making improvements to the CenturyLink building.

Weber’s companies own the property and he has plans to bring new tenants and jobs to the site, located at 333 Front Street in downtown La Crosse. Late last year, the council approved a development agreement with 333 Front Street LLC and Weber Holdings LLC for the property, which is part of a tax increment financing (TIF) district. But due to the economic downturn, plans to redevelop the property have slowed and the council and developer have now agreed to delay certain provisions in that agreement.

As an incentive, the agreement approved by the council last year included a contribution not to exceed $1.1 million, effective Sept. 1, 2021, to be made to the Weber companies. The payment could be made in one or more installments and was not to exceed the lesser of $1.1 million or 85% of the tax increment resulting from an increase in the property tax base for the project. At Thursday’s meeting, the council voted to delay the effective date of the contribution until 2024. Incentive payments to developers in return for investments that have potential to grow a city’s tax base are common, especially as part of TIF districts.

As an “additional inducement” for the city to enter into the development agreement, the city required that the assessed value of the property reach at least $11 million by the 2020 tax year. If that did not happen, the developer would have to pay a “deficiency pilot” fee. County tax records put the current assessed value of 333 Front Street at just over $10 million. The council also approved delaying the assessed value requirements in the agreement until 2024 at its meeting Thursday. The property was not on the tax rolls in the past, as it was exempt due to being owned by a public utility.

In December, 2019, Weber announced his plans to buy the property for $11 million. The building once served as the regional headquarters for CenturyTel, which has since changed its name to CenturyLink, and housed over 500 workers. But by last year that number had fallen to 180. Weber told local media in 2019 that he hoped to have 750 people working out of the building in three years time. As part of his plan to purchase the property, Weber said that CenturyLink would lease one floor of the building, and he would find new tenants for other floors. But that was before COVID-19 hammered the economy and added uncertainty to the commercial real estate market.

The acquisition of the property furthered Weber’s dominance of the downtown La Crosse real estate scene. The CenturyLink building is close to a number of other properties that are linked to Weber, including the headquarters of Logistics Health Incorporated, a company Weber founded, and the Charmant Hotel. The investments made in those and other La Crosse properties have won Weber support from the council.

“He’s lived up to almost every obligation we’ve given him and he’s really done a lot for the city,” council member Roger Christians said of Weber on Friday.

Thursday’s vote on delaying provisions of the development agreement was short-circuited by Mayor Tim Kabat. When the original development agreement was approved by the council last December, it also was short-circuited by the mayor. A short-circuit is a provision used to speed the passage of resolutions through the usual committee process to get an item before the council faster. All council members present at Thursday’s meeting voted in favor of the amendments to the development agreement with 333 Front Street LLC and Weber Holdings LLC.

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