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Thursday, January 25, 2007

Intersport: A fair investment?

The proposed Intersport project near the Walworth County complex in Elkhorn could eventually be one of the largest commercial developments this county has seen.

Reporter Mike Heine has outlined the proposal in a series of articles over the past month. (Plan, plan details, opinion mixed).

The biggest bone of contention appears to be the sale price that the county considering.

Although some recent letter writers to the Week imply that the county board is being hoodwinked into a below market price, the consideration is more complex.

It seems everyone agrees that the price is below market value. The debate is whether or not that's a fair trade-off as an investment in economic development.

These sorts of calculations are made all the time.

Just look to Miller Park or Lambeau Field. Both are occupied for for-profit sports franchises, yet the stadiums are paid for by taxpayers, for some reason.

Perhaps, as some argue below, the economic impact will benefit only a few. On the other hand, youth sports wouldn't be the worst type of enterprise to encourage in our county

What do you think? Add your comments below.

13 Comments:

Anonymous Ralph Williams, Elkhorn said...

(Published in The Week, January 28, 2007)

The proposed Intersport Complex ids a bad deal for the taxpayers of Walworth County. Ten years ago, Walworth County purchased additional land for $6,000 per acre for the construction of the new court house.

Now we ar selling land to Intersport for $3,000 per acre which is less than market value. In fact, the annual lease payments of $180 per acre will be subtracted from the proposed sale of $3,000 per acre.

We are giving the land away.

Perhaps a handful of hotels and restaurants in the area will benefit from the complex. The remaining 99.9 percent of the taxpayers will get no benefit and no tax relief.

Intersport will pay little or no real estate taxes under the proposed lease arrangement.

What about the traffic on Highway NN during the summer? Will we be stuck in hour-long traffic jams to get from Elkhorn to Lakeland Hospital?

Lastly, what if Walworth County wants to expand the county jail or nursing home? The county will be land locked as it will be selling land north of Highway NN.
An alternative would be to turn the old dog track in Delavan into the proposed sports complex.

11:43 AM  
Anonymous Graham Olson, Elkhorn said...

(Published in The Week, January 28, 2007)

The decision by the Walworth County Board on Jan. 9 to approve the agreement in concept with Intersport of Chicago and New York for the lease and then sale of 250 acres of the county farm to be developed as a sports complex is just plain wrong and irresponsible. the lease/sale of this land is substantially below fair market value and subsidizes a private for-profit corporation.

The amount of land being leased/sold, is more than twice that required for the project. All lease payments are to be applied to the purchase price. We anticipate Intersport will call themselves an "educational facility" and move to become tax exempt.

The Intersport complex will have a major negative impact on virtually all of the city of Elkhorn and negatively impact the quality of life in all of Walworth County.

Imagine the effect 4,000 transients per week for 11 weeks each summer would have on police and public works, traffic and parking, trash, downtown mix of stores, hospital and medical care, sewer and water use.

It is certain to attract Paul Bunyon style restaurants, hotel and RV parks and change many homes into rental units.
Please keep in mend that Intersport is a private corporation and the financial benefits off this project only flow t the owners and do not benefit most residents of the county.

The county board has made a very poor decision without diligent research, that must be reversed. A virtually identical project, Dreams Park, has had a very negative impact on the city of Cooperstown, New York.

Please contact the mayor of Elkhorn, the aldermen of Elkhorn and your county board supervisor. They have the power to stop this madness before it becomes reality. Thanks.

11:45 AM  
Anonymous Philip T. Jones, Elkhorn said...

(Published in The Week, January 21, 2007)

I am writing this letter regarding the Intersport proposal.

It bothers me considerably to see our county administrators and several of the overzealous board members trying (and about to succeed) to railroad the proposal by Intersport people to railroad the whole thing through.

It reminds me of the railroad of the demolition of the old (60 years) county home.

Why not take a step back, people, take a deep breath and look into the matter with a little bit of restraint.

I suggest the Intersport people and the county board, along with the city of Elkhorn council, have an open public meeting before we give ($3,000 an acre) away our land, instead of just a few who may benefit or not.

That open house at the library was a farce and a lot of grandstanding. Make this monumental decision and let the people be heard. This big of a proposal, this fast and this cheap smells.

11:47 AM  
Anonymous Anonymous said...

The Intersport deal is a good one for evrybody. The board has already said they would never allow this land to be "developed" ie homes, this opportunity is a good use for the land and at least we are getting something for this plot of land. Sure lets deny this exciting opportunity so they can go to Delavan or another adjoining community, and lets allow Elkhorn to stay the same ol sleepy community that it is. As homeowners, aren't you tired of footing the lions share of the city's expenses every year since all major developments get shot down. Ever wonder why Elkhorn has to borrow money for utility and road imporvements? Because there are NO large box stores or other developments to pitch in. Sure lets deny this and All of us will continue to travel outside of our communtiy to eat and shop. Same Old Same Old. Enough already.

11:12 AM  
Blogger Rene said...

I do not understand why the county feels the need to subsidize development. In essence, this is what we're doing if we give that land away so cheaply.

The other question I have with this is, what is the long-range plan for that area? We have a hospital, nursing home and potentially a school for children with serious disabilities. There will be residential development out there too at some point. How will intersport fit into that plan? What about roads and other city services? I will venture to guess that there is no long-range plan. I would like to know how county and city taxes will be effected by this development and how much of the impact of their presence will be paid for by Intersport. This has not been made clear to the public at this point.

I've lived in this community for over 30 years because it is a sleepy little community. I like that-a lot of people do. If I didn't it would be easy enough to move to the cultural and consumer Mecca’s that are Lake Geneva and Delavan.

I have to question this statement "Ever wonder why Elkhorn has to borrow money for utility and road imporvements? Because there are NO large box stores or other developments to pitch in." There are a lot of reasons why we borrow such as the overuse of TIF districts and unrestricted development resulting from that. The population growth we are seeing adds stress on city services.

Growth does not have to be a bad thing but I am sure there that not having a Wal-Mart or a Taco bell are not the major reasons that we borrow for roads.

2:53 PM  
Anonymous Bill Norem, Elkhorn said...

County property is no place for private developer

To the Editor:

The Walworth County Board's decision to enter into a contract with InterSport is one more bad decision. I have no problem with InterSport or the concept, but not on county property. This has moved too fast and the facts are sketchy at best.

-- Instead of trying to remove your chairperson, supervisors should get on with the people's business.

-- We should not sell county land for less than it is worth or what the county paid.

-- Applying rent as payment for underpriced land which is not on the tax rolls is questionable.

-- Seasonal and minimum wage jobs will not bring the strength of solid economic growth to the county or the community.

-- There will be increased demands on law enforcement, rescue operations as well as other services.

-- Do we lay off those people in the off season?

-- Who will pay for the infrastructure, roads, etc.?

-- It is very unlikely this will be profitable without Walworth County subsidizing it and maybe not then.

-- If it does not do well, the land could go to a developer.

-- Walworth County is receiving good rent as farm land. Let's not make a parking lot.

For the good of the people of Walworth County I would urge the 11 responsible county supervisors who voted against this project to put an early end to this.

End this project now. To subsidize any business or industry is a calculated risk, but at least pick on something that could bring good-paying jobs. This is not the one.

William M. Norem
Elkhorn

10:33 AM  
Anonymous Steve Columbo, Intersport said...

Developers: Land sale hinges on economic success

Much concern and misinformation have been circulating about the actual details of the county approved land agreement for the Intersport Champions Village (ICV) to be located in Elkhorn.

In an effort to be upfront and to dispel some of these falsehoods, the major deal terms that were approved are described below.

Intersport will initially lease a first parcel of approximately 195 acres at a rate of $180/acre with an option to buy these acres for $3,000/acre at a later date (see below).

A second parcel of approximately 55 acres can later be made available for lease and possible purchase under essentially the same terms after ICV has met performance goals.

A lease credit exists that can allow up to the first five years of lease payments to reduce the purchase price of the land.

ICV has also agreed to pay to the county a surcharge of $5 for every player that comes to ICV-- forever.

This land agreement DOES NOT contain an immediate right for Intersport to purchase the acreage.

The Walworth County Board has built safeguards into the deal to ensure that specific performance goals be met BEFORE the land can be purchased. Generally, before the option to purchase is available, Intersport must:

1) Complete the construction of 10 baseball fields and 25 player cabins AND

2) Demonstrate that the project has, during any 12 month period, generated at least $6.3 million in economic impact to the County

If our business plan fails to ever deliver this financial impact, the land can never be purchased. The business risk is all ours.

Do not fall for the mischaracterization that this agreement is simply a sale of land for $3,000/acre and is therefore unfair; it is not.

It is a land lease with a potential option to purchase in exchange for a substantial and guaranteed level of economic impact to the community and the continuing potential for significant upside of such impact in the future.

For these reasons, we and the majority of the county board believe that this is a fair deal for ICV and the citizens of the community.

In an effort to give the facts, we are establishing www.ICVFacts.com.

This Web site is intended to provide answers to many of the questions surrounding ICV.

Also, official copies of the approved land resolution (# 48-01/07), an amendment to said resolution and a terms letter (all of which are a matter of public record) are available through the County.

Steve Colombo, President of Baseball Operations, Intersport Champions Village

10:34 AM  
Anonymous A Local Business Owner said...

Being a "relative" newcomer to this community and having lived in many communities that have gone through rapid growth, I have a hopefully valid opinion on the subject of the Intersport Complex.

Recreation venues come in two categories, those that attract tourism and those that enrich the lives of locals. There are few that can offer both and I believe the Intersport Complex can do that. A facility that can allow for an increase in tourism and allow for greater facilities for our children's access to sports sounds like a win-win in my book.

From what I know, this complex will be built on currently vacant land that is collecting a decent lease price from a local farmer. To the best of my knowledge, his crops are not going out to eat at local restaurants, staying at hotels, nor shopping in our stores. If my little league memories serve me right, only several hours of a day are spent actually on the field and the rest of the time is available for the player and family to explore our community.

Bringing this kind of visitor to our community can have incredible and rewarding results. We are not talking about another concert venue, race track or even casino — the sport complex will attract families who are willing enough to travel to see their sons and daughters play. Is this not who we want coming to our community?

The county will be recovering their cost with every dollar of tax collected. Sure, the county may not recover the purchase price of $6,000 per acre with the initial transaction, but look at the additional draw there will be. Imagine what room taxes can be recovered with the additional nights stayed? The county may not collect this directly from Intersport, but the rest of the retail members of the county will certainly benefit. This is saying nothing to the potential increased tax base to other satellite businesses that may pop up (restaurants, hotels, retail). Remember, there is a Economic Impact clause in their statement... If they don't deliver, there are recourses.

As for infrastructure such as roads, police/fire/rescue and utilities, remember there will be customers at the end of those utilities and destinations at the ends of those roads and more tax revenue generated to pay new officers and firemen.

Overall, I believe other businesses should openly endorse this concept and encourage our partners in commerce to embrace this opportunity. Yes, we may see an increase in traffic and yes we may see a lot more out-of-towners in the local restaurants, but they'll at least be coming here and not the other community that could take advantage of this opportunity.

3:36 PM  
Blogger Harold said...

You know, at least the current use of the land for farming is not far from the original reason the county bought the land. It rresults in considerable dollars flowing through local businesses and the profits stay in the area.

Modern communication and the lack of abiltiy to continue as an educational resource from the land has ended its use as a research facility. The farmers are getting smart on their own now!

There is no need to hurry to "do something" different with the land without deeper study of the impact on the area.

To delegate this land to a use that may not be its highest and best use is not right. Especially in light of some concerns over the integrity of Intersport, and its exporting of all profits from the area.

One of the best things the Board of supervisors could do on this is *nothing* (other than vote it down).

No reason to rush into a possibly bad committment.

The Board is not currently "on a roll" with superb decisions. The demolishing of as sound a facility as the Nursing Home is not very logical.

Often times we are better served by government "when it does nothing".

Harold Smage Sr

4:18 PM  
Anonymous Rene said...

Chances are the impact of Intersport will not stress the quality of life in Elkhorn or raise taxes for residents-who by the way do not gain anything from this. However, if this thing becomes as successful as Intersport would like it to be, it certainly will. My guess is that it will go the way of the dog track, a venture that promised much but delivered little to local residents. Intersport is a big company with no ties to community. The employment opportunities it offers locally are not even worth mentioning.

“What’s up with this 99-year lease thing by the way? According to the Janesville Gazette (December 14, 2006): “Intersport has proposed a 99-year lease with an option to buy the land once the phases are completed, said Shane Crawford, deputy county administrator in charge of intergovernmental relations.” I’d like to know what that means in this case? Does it mean that today's board offers our assets at discount prices because potential economic losses will show up once they're gone? Regardless of what it means, county land, which should remain in stewardship of the county for future needs of the community will be gone. As Shakespeare wrote, ”What’s done cannot be undone.

In Elkhorn’s last mayoral election, the voters voted for two candidates. One candidate ran on a platform of slow, planned growth, and the other for zero growth. The election was very close and the zero growth candidate won. Based on that outcome, one can conclude that a clear majority of Elkhorn’s voters are wary of rapid, unplanned growth and it’s impact on a way of life that we now enjoy. I moved to Elkhorn from Lake Geneva about 30 years ago because 6 months of the year Lake Geneva was a very unpleasant place to live because of tourism.

I am glad that the City of Elkhorn is going to make Intersport jump through some hoops before okaying this. The layout is essentially a U shape right around the nursing home and the Lakeland School complex. How will traffic effect these facilities, access to them and to the hospital, and Elkhorn’s long range plan for further residential development in that area? We need to take some time to explore all the issues.

This county board has made some notoriously bad decisions over the last 20 years. The thought that this body, (which in all fairness I will say always has some sensible individuals in it’s minority), should have the last word on this is not acceptable. I agree with Harold Smage when he writes:” Often times we are better served by government "when it does nothing".

6:49 PM  
Anonymous Bruce Bradshaw said...

Here’s my view of the economics behind the proposed InterSport Champions Village complex according to my understanding of the agreement in principle.

Intersport would lease 155 acres in Phase 1 at $180 per acre until they can prove an economic impact to the county of $6.3 million over any 12 month period. They will invest $8 million in improvements in Phase 1.

As an example, assume it takes 5 years to build their business to full capacity and reach the $6.3 million impact. Bear in mind, they will not be able to exercise their land purchase option until this milestone is reached.

155 acres @ $180/ac. X 5 years = $ 139,500

RE taxes on 155 improved acres X 5 years = $1,162,500
($8 million in improvements)

$5 surcharge per child x 5 years = $ 65,750
(1000 kids yr 1, 2000 kids yr 2, 3000 kids yr 3, 3575 kids yrs 4 & 5)

Direct payments to the County over 5 years = $1,367,750

If the required $6.3 million economic impact is independently verified at this point, Intersport will have the right to purchase the 155 acres of land at $3000 per acre.

The total price would be $465,000 minus a credit for the $139,500 in lease payments. Intersport would continue to pay RE taxes and the per child surcharge. I estimated the RE taxes to be $1500 per acre. If I’m close then the County would continue to receive approximately $250,000 per year on this acreage and the surcharge alone.

All I’ve discussed to this point are direct payments to the County not the ancillary economic benefit to the businesses and residents of the County.

In the 5 year period building up to full capacity, the Champions Village will also be building up to the required annual economic impact milestone. Assume it goes something like this:

Year 1 $1.5 million
Year 2 $2.5 million
Year 3 $3.5 million
Year 4 $5.0 million
Year 5 $6.3 million

Total benefit over 5 years = $18.8 million.

Every one in the county will participate in this economic impact as they will have more control of the increased dollars circulated throughout the County. Local businesses will benefit from more business resulting in more sales tax revenue, more room tax revenue, and more wages. The Champions Village clientele are transient. They will not overload our schools causing our taxes to increase.

It is my understanding, Intersport’s proposed Phase II (requiring an additional 95 acres of land at similar terms) cannot even begin until Phase I is completely accomplished.

The majority of the opposition appears to be over the proposed sale price of the county land where this complex would be situated. My argument is for a 5 year impact to the County of approximately $18 million over a 5 year period. This to be accomplished before Intersport can purchase the land and after they have invested $8 million per the terms of the agreement.

If the County Board decides to vote against a contract with Intersport and sell the land to a developer, they cannot put a high enough price tag on it to receive the same benefit.

If sold to a developer, it may take 2 years or longer to get planning and zoning approval.

250 acres @ $20,000 per acre $5,000,000
(a generous estimate of value)

RE taxes for 2 yrs (undeveloped land) $100/ac $ 50,000

Total 2 year impact to the county = $5,050,000

Further assume that 500 homes are built over the next three years at an average sale price of 250,000. If real estate taxes average $3500 per home then the County would see an additional $1.75 million per year. Add it all up and within a 5 year period we would realize $10.3 million.

In this scenario, there will be no direct benefit to each of the residents of Walworth County. The County Board of Supervisors will control every dollar that is realized. By their own admission, for each dollar of revenue realized they must pay out $1.22. What do we gain?

The numbers are hypothetical, but according to the terms of the agreement in principle, this is how I see it unfolding.



Bruce Bradshaw
Elkhorn

2:09 PM  
Anonymous Anonymous said...

What this area needs in a good skate board park, where the kids can have fun, but safely. I personally am glad the Intersport Complex is considering another area. We didn't need the traffic, noise, lights and all the problems it would bring to Elkhorn.

10:01 PM  
Anonymous Rene said...

I agree with that completely. I work with teenagers, and one thing that is clearly missing in Elkhorn parks, and in county parkland, is something to do when you’re between the swing set age and the bird watching age. Having a skate and BMX park, using the rec center to showcase talents, such as bands and poetry slams or open mike nights, shooting hoops, dancing to a professional deejay, pool tables, ping pong tables and board games would be really great for young people in our community. How about an audio/visual room where movies or sporting events are shown on a big screen TV, summer dances, pool parties, a designated wall to highlight graffitti artists, there are plenty of things out there other than organized sports.

I'm sure that if you surveyed teens and their parents you'll find more ideas, and you will also find manpower, funding and donations of things like a big screen TV, pool and ping pong tables, game systems and even building material and man power. This would require some thought, research and committed volunteers to manage-but we have many generous and talented people like this in this community-including out teenagers.

In my view, the idea that we can only fund projects that raise private sector profits with our tax dollars goes against what public funds and public land are supposed to do for the community. The city has a recreation and parks program, the county has a recreation and parks committee that is supposed to be dealing with issues that use our tax dollars to improve the quality of life of the taxpayers, not just the bottom line of developers and the tourism industry. In the long run, it is precisely these kinds of community programs that will enhance what we already do for our citizens.

As I see it the strength of a small community like Elkhorn and others in our county, is that we are a manageable size and that we are all in this boat together. We can draw from a wealth of resources of talented and interested individuals within the community, along with some of the taxes these citizens pay each year to support our city and county government. Considering the rapid growth in our area and the retail shopping that is available all around us in Delavan, Lake Geneva and Janesville, I would think that a city like Elkhorn is free to focus on the quality of life that already makes this small city one of the best in the country.

1:55 PM  

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