The Village is finally getting serious about providing the Shorewood Police Department with some decent facilities.  The present building they work out of is totally obsolescent for a police force their size in this day and age.

I had previously suggested that the Village talk to the School Board about the SIS building, as the school system has too much space for too few students.  The main drawback to that idea would be getting the School Board and the Village Board to come to a consensus within a reasonable amount of time. 

As the Village Board has been so delinquent in addressing this problem, and with all the different considerations that have to be taken into account by the School Board, it is probably not a solution that can happen in a timely manner.  Which is unfortuanate, as more than likely we will have the problem of what to do with the SIS building in the next  few years.

A viable site for the new police station that is going to be looked at is the AB Building at 4057 N Wilson Drive.  At first blush, it appears this is a site that can meet the physical requirements of the SPD.

The downside is that it will mean a loss of $63,000 in property tax revenues.  Considering all that the Village is doing in trying to increase tax revenues, this would be a step backwards.

I don't think though, that the site should be dismissed out of hand because of the tax consequences, if the Village can get innovative and perhaps make up the difference in other ways.

For instance, it has been mentioned in the past that perhaps the Whitefish Bay PD would be interested in sharing space with the SPD.  If the 4057 building has enough room, the combination of savings by both departments through shared resources, and the rental income from the Bay PD could offset the tax loses.

Other possibilities that could be explored would be rental of space to the Sheriff's Dept for a substation --- or possibly other law enforcement organizations.

If there is a decent gun range in the new facility, NRA hunter training programs and possibly range rental time for pistol leagueS could generate some additional revenue.

WHAT DO YOU THINK ?  PLEASE COMMENT BELOW !

The current Shorewood Village Board is spending some big dollars and planning to spend more, and gambling that increasing property values will pay the bill.

Shorewood is using what is called a TIF (tax incremental financing) as a Financing Tool to pay for various projects, such as Streetscaping, the River Project, Condo Development, etc. 

According to the information published by the Wisconsin Dept of Revenue, a TIF works like this:

"Tax Incremental Finance, or TIF, is a financing tool that allows municipalities to invest in infrastructure and other improvements, and pay for these investments by capturing

property tax revenue from the newly developed property. An area is identified (the tax

incremental district, or TID) as appropriate for a certain type of development, and

projects are identified to encourage and facilitate the desired development. Then as

property values rise, the property tax paid on that private development is used by the

municipality to pay for the projects."

There is a risk though, that IF property values Decline, rather than Increase --- All the Property Tax Payers will pay for the expenditures through Increased Property Taxes, as explained here by the Dept of Rev:

" Municipalities can invest significant amounts of money  into  these infrastructure

improvements in hopes that growth will follow (sometimes called the "build it, and

they will come" strategy). However, if little or no private development occurs after the

improvements are made, there may be no tax increment revenue with which to pay for

the investment. If there is no increment revenue, the bonds used to pay for the

improvements will have to be paid for with general tax revenue. Paying for these bonds without a larger tax base means a higher tax burden. Another risk of over-investing can be that the site is improved, but the improvements actually prevent some types of development from being able to use the site."  

The Big Question now becomes --- are Shorewood Property Values Increasing or Decreasing ?

There are many different ways to calculate the values, and with the current volatile real estate market --- it is anybody's guess of what the values will be by the end of the current year. The basic method of calculating property values, involves what is termed "Market Value", and changes in what the sales prices are in comparison between two comparable time periods.  (Other methods of valuation, "replacement" and "income" are not commonly used for residential property appraisals or assessments).

Taking a snapshot of Single Family Home sales in Shorewood for the time period of January 1^st of this year (2008) to date, compared with the same time period for last year (2007), there is a notable trend:

JANUARY 1 TO MARCH  26, 2007 --- SINGLE FAMILY HOMES SOLD IN SHOREWOOD (17 sales)

ORIGINAL ASKING PRICE             DAYS ON MARKET             SALES PRICE

189,900                                               24                                            192,100

214,900                                               169                                          180,000

224,900                                               114                                          215,000

230,000                                               16                                            221,500

259,900                                               126                                          235,000

289,900                                               183                                          237,000

289,000                                               13                                            289,000

298,000                                               46                                            298,100

329,900                                               99                                            295,000

309,000                                               20                                            310,000

320,000                                               45                                            320,000

339,000                                               42                                            335,000

364,900                                               43                                            356,000

387,900                                               68                                            350,000

449,000                                               10                                            460,000

749,000                                               18                                            750,000

1,495,000                                            62                                            1,425,000

Tot  6,740,200                                     1098                                        6,468,700

Avg 396,482                                        65                                            380,511

THERE WAS APPROX A 4% DECREASE BETWEEN ORIG PRICE AND SALES PRICE

JANUARY 1 TO MARCH  26, 2008 --- SINGLE FAMILY HOMES SOLD IN SHOREWOOD (9 sales)

ORIGINAL ASKING PRICE             DAYS ON MARKET             SALES PRICE

279,000                                               112                                          237,000

314,900                                               146                                          290,000

399,900                                               141                                          300,000

415,000                                               181                                          376,500

424,900                                               172                                          417,000

479,900                                               91                                            449,000

589,900                                               88                                            555,000

599,900                                               31                                            560,000

1,349,000                                            204                                          1,000,000

Tot  4,852,400                                     1166                                        4,184,500

Avg   539,155                                      130                                          464,944

THERE WAS APPROX A 13% DECREASE BETWEEN ORIG PRICE AND SALES PRICE, AND DAYS ON MARKET DOUBLED OVER THE PREVIOUS YEAR.

WHAT DO YOU THINK ?  YOUR COMMENTS ARE APPRECIATED !

Two nights ago, on the 18th, the Shorewood DPW committed a large crew during the night to do a snow removal operation in the Business District.

Hooray !!!!!

On my block (4400 N Oakland)  and south, they did a great job.  Shoppers can actually get from their cars to the shops now.  

However -- (you knew there was going to be a however) -- the Merchants on Capitol Drive have nothing to cheer about.  As of this afternoon, their stores and the street are still separated by mounds of ice and snow.  

I wonder if anyone on the Shorewood Board of Trustees has ever had any retail experience (other than shopping).  If they ever depended upon retail sales for their livelihood, they would know that this week -- the week before Christmas -- can be a make or break event for many of the merchants.

With the high rate of property taxes that are paid for commercial property in Shorewood --- in addition to the BID tax that commercial property owners pay --- it is outrageous that these merchants are not taken better care of by the Village.

Note to Village Trustees:  Forget about bicycle races, and forget about artist displays by outside vendors at the high school, and forget about spending Tens of Thousands of Dollars Advertising how Friendly Shorewood is to Pedestrians and how Upscale the stores are for Shoppers --- try spending the money on clearing the snow banks so the merchants can make a little money and keep their businesses open.

 I would love a 320% ROI !!!

I am sure that any investor would love to get that kind of Return On Investment --- but I doubt that even Warren Buffet would count those kinds of chickens before they are hatched.

The Community Development Authority is sponsoring a Facade Grant of $800,000 for the apartment building at 3575 N. Oakland.  According to a story in www.shorewoodnow.com by Marie Rohde:

The building  is currently assessed at $3.5 million.

The CDA says the facade improvements will increase the value of the building by $2.256 million and boost neighboring properties by $305,000. 

Doing the math, $800,000 invested with a return of increased value of $2,561,000 is a ROI of 320%.

As a real estate broker, I have been involved in many transactions involving renovation, with single family and multi family properties.  I have never heard of anyone getting that kind of ROI with just a new facade ....

I would certainly like to see a Certified Appraisal of both the value of the building as is, and the value of the building after the facade improvements.  Due to the uniqueness and complexity of this project, such an appraisal would be mostly in narrative, and it would be interesting to see the rationale the appraiser used, and the comps that justify the conclusion.

As a very imperfect comparison (once again considering the uniqueness and complexity of the project) I have printed below the kind of return on investment a homeowner would expect for various renovations.

This is somewhat "apples to oranges" -- but note that on average, no project even pays back the cost !!  The returns are all less than 100%. 

You can find a number of similar charts and comparisons on the internet --- potential Seller are always interested in ways they can sell their property for a higher price. 

Just for fun --- let's pretend that a 320% ROI is doable on this project --- and can be substantiated to the satisfaction of investors/bankers/etc ------- then  why does the Village have to finance the project ?  If it is for real --- drop a dime, call Warren Buffet --- those are the kinds of numbers that would probably get his attention.

What's YOUR TAKE --- please leave your comments below.