Talk of longtime Franklin business Strauss Brands expanding here has been going on for some time.

February 17, 2022. I wrote:

Is the Strauss expansion proposal in Franklin dead?

At that night’s Planning Commission meeting Strauss officials could not attend because they were out of state.

However a brief statement from Strauss to Franklin was read into the record that Strauss needed time as they seek to sell the land of the site to someone else.

Applause erupted.

Strauss did not request any specific action be taken.

One brave resident spoke in favor of Strauss.

Later in the evening the Planning Commission voted 4-1 to approve a special use permit for the Strauss expansion. The recommendation was forwarded to the full Franklin Common Council.

About those Strauss e-mails…
 
February 16, 2022.

I called Mayor Steve Olson. I had recently posted that a member of the Franklin Common Council was getting e-mails urging a NO vote on the proposed Strauss expansion. Olson was getting e-mails in opposition as well.

As of February 16^th Olson has received:

235 in protest

4 were from WI

1 was from Franklin

On February 21, 2022, I blogged:

The Franklin Common Council meets next week to take up the Commission’s recommendation.

Many short-sighted residents seem to be celebrating. They possess zero comprehension that the city’s business climate has just taken a serious hit.

Here’s the key point no one has focused on while this debate languishes in litigation: what Strauss in limbo is costing the city.

If and when completed the new Strauss facility would result in $1,210,230 annual property tax revenue.

Let that sink in. $1,210,230…every year.

The ringleader of the kill Strauss movement is running for alderman. He is the most flawed candidate in the April election and would be dangerous for Franklin’s future. It is imperative his opponent, incumbent Alderman Mike Barber be re-elected in District 5.

One of my readers, clearly a Strauss opponent, asked how I came up with the $1,210,230 figure in lost property tax revenue to the city. I responded:  

The estimated assessed value of the property is $63 million.

The 2022 tax rate is $19.21 per $1,000 of assessed value.

Simple math.

Divide 63M by $1,000. You get 63,000.

Multiply 63,000 by 19.21. $1,210,230.

The same reader also commented:

What is the City of Franklin’s cut of that property tax?

We have to also build a new water tower and fire station to support this project on top of the $20 million TID and infrastructure cost.

The answer to the question “how much goes to the city” is $4.84/thousand. 63m/1000 x 4.84. That comes to $304,920.

The water tower is paid for by the water utility through borrowing.

When would we see the money against the tax bill? The answer to that is, it depends. It goes to pay off the TID expenses first . The math isn’t difficult. There’s a total of about $12m in budgeted expenses PLUS interest. So roughly $15m. Strauss would itself pay off the TID in 12.4 years.

If you ADD the tax payments from Copart (a 7,200 square foot building and vehicle storage yard) and the homes the payoff could come quickly.

It’s all apparently dead now, thanks in large part to an aldermanic candidate who engineered the formation of a non-profit that sued the city. Imagine, running to hold office in the city but hoping like Hell the city loses a lawsuit you played a major role in. It’s unconscionable. Tell a cousin in Nebraska about it and he’d say you’re crazy, that you’re making it all up.

And think about this. The city would receive $304,000 from Strauss (after the TID is paid off) and that could mean three police officers or fire fighters.

The fire station would be paid for by impact fees (one lump sum from accumulated fees followed by annual new impact fees) and bonding. Essentially a 20 or 30 year mortgage.

I know. A lot of nerdy inside baseball. But those are the answers to the resident’s questions.

And speaking of questions, here’s one no one was asking about the business-destroying Strauss opponents.

The most recent developments

Earlier this month the Milwaukee Journal Sentinel reported:

Franklin’s common council shot down a request by Strauss Brands which would have paved the way for the company to sell the land it originally planned to use for a new meatpacking plant.

“I don’t even know what to say at this point, it’s just really disappointing,” said CEO Randy Strauss of Strauss Brands following the denial. “It makes me not want to stay in Franklin, I can tell you that.” Strauss had requested to amend a tax assessment agreement it previously made with the city, which would have accommodated the sale of the land.

Ald. John Nelson on Dec. 6 made a motion to “continue with the current contract as we have on record” following a closed session discussion. The council voted unanimously to deny Strauss’ request with no discussion in open session.Mayor Steve Olson declined to elaborate the reasoning behind the decision, saying he won’t discuss closed session matters.

According to the March 2019 agreement, Strauss Brands guaranteed a minimum $5 million assessment on the land for 2021 and a $10 million assessment for 2022-2041. The guarantees were to help pay for infrastructure costs for the aborted plant. If the property taxes are not at the specified levels, Strauss Brands must pay the remainder per the agreement.Strauss made it clear the request his company made was contingent upon assignment of the contract to the buyer of the property, “which will continue to guarantee the city its long-term tax base,” he said, calling it a “win-win for all parties involved.”

It is unknown who the user/buyer would have been, but Strauss touted them as a “great person, a great company” that would add value to the community.

“We have found a buyer that we are confident will be a great long-term partner for the city of Franklin,” he said prior to the council’s closed session. “We are working towards closing that deal and assigning the tax agreement to this new occupant.”

After the vote, Strauss was visibly frustrated on his video conference call with the council.

“I’m out of here, thanks for your time, thanks for nothing,” he said right before signing off. “I really am disappointed by everyone on this board right now, I really am, including you mayor.”

—Milwaukee Journal Sentinel, December 13, 2022

The knee-jerk reaction (that I admit I had) was that the city screwed Strauss. But after further review I agreed that Franklin acted to protect the taxpayers. Truth is that from a PR perspective Strauss bothched this all along and didn’t do much in the way of heavy lidting to support their own effort.

Just before Christmas the Milwaukee Journal Sentinel reported Strauss sold the the 30-acre parcel where the company planned to build a new meatpacking plant to Cellco Partnership, an affiliate of Verizon Wireless, for $2.79 million.

The lawsuit against the city filed in December 2020 by Franklin Community Advocates is still ongoing.

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