Janesville45.3°

Delavan to wait for Lake Lawn money

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Catherine W. Idzerda
June 13, 2012
— Getting Lake Lawn Resort securely established is important for the whole community.

That's how a majority of the Delavan City Council members felt about an agreement to allow the resort to defer paying back the $900,000 special assessments it owes the city.


The council voted 4-1 to approve the agreement. Alderman Gary Stebnitz, who does business with the resort, recused himself from voting.


Alderman Dave Kilkenny was the lone "no" vote.


The $900,000 was assessed for water lines the city installed for the previous resort owners, who wanted to build a water park at the facility.


Under the agreement, the city would agree to defer the next six of nine annual payments, each for nine years. However:


-- Deferred payments are subject to an annual interest rate of 4.5 percent.


-- Deferments are subject to performance standards, including providing a set number of full- and part-time jobs, generating a set amount of room tax for the city and keeping the resort open for set number of days each year.


-- Parts of the resort must be connected to city water.


-- The ownership group must put a set amount of capital into property improvements.


Deferring the payments would allow resort owners to use their capital to improve the property.


Improving the property translates into an increase in the "tax increment"—the amount of taxes the city gets from the property.


As for the resort, if the tax increment exceeds the amount needed to cover payments on the current debt and deferred debt, Lake Lawn can use 50 percent of the excess to cover special assessment costs.


Not everyone was happy about the agreement.


"Why was no one laughing?" Kilkenny asked the audience.


Earlier in the evening, when the council was discussing sidewalk assessments, Kilkenny asked if the homeowner could defer the payments until the home increased in value, when the amount could be taken off the owner's tax bill. That's similar to part of the arrangement the city has with Lake Lawn Resort.


Members of the audience laughed.


"When a business is at the public trough, I'm going to protect the taxpayers," Kilkenny said. "When you want to get a free or reduced lunch (at public schools), you have to state your income."


Kilkenny proposed postponing the vote until the July meeting so the city could get more information about the actual value of the property.


His motion was voted down, 3-2.


Representatives from the resort spoke in favor of the amendment, talking about the jobs they were creating.



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