The former Kmart building can now be sold to a business that plans to locate a retail store in the long-vacant structure, developer Richard Lynn said Monday.
The city’s Plan Commission gave its unanimous approval to subdivide the former Kmart and Fashion Bug property on New Pinery Road into three separate lots.
Lynn, owner of Lynn Holdings LLC, said the commission’s decision to approve dividing the site clears the way for his company to sell the largest of the lots — the 9.55-acre lot containing the former Kmart building — to a buyer who he said will be identified in about two weeks.
The rest of the property will remain owned by Lynn and his partner, Jason Adamany.
What happens to the other two lots likely will depend on the development of the Kmart property, Lynn said, but he expects the entire site, including the two smaller lots, to be occupied by new businesses by the end of the year.
“It will happen in 2019, hopefully by spring,” he said.
The commission originally approved the certified site maps for the three land parcels contingent on the Wisconsin Department of Revenue giving final certification to the creation of a tax increment financing district on the property that included the Kmart building, closed since 2014, and the Fashion Bug women’s clothing retailer, closed in 2013.
The tax increment district had received all the required local approvals, but has not yet been approved by the state, said Portage City Administrator Shawn Murphy.
According to Murphy, Department of Revenue officials have not given any indication that there is anything amiss with the creation of Tax Increment District No. 10, nor have they asked for additional information or clarification. Murphy attributed the delay in state approval to the changing of the gubernatorial administration. Democrat Tony Evers, who defeated two-term Republican Gov. Scott Walker in November, was sworn in Jan. 7, and his administration is in transition now.
After the Plan Commission approved the certified site maps contingent on state approval for the tax increment district, Lynn and Adamany asked that the panel give its approval without the contingency so the certified site maps can be recorded and the sale can proceed, regardless of whether the state OKs the increment district.
The commission reconsidered its original motion, and approved the site maps without the contingency.
Near the end of 2018, local officials — including the Portage Common Council and the Joint Review Board — approved the creation of Tax Increment District 10 as a “pay as you go” district.
That means Lynn Holdings, and not the city, must put up all the up-front money needed to develop the area, and the property owner may be reimbursed for some of the development costs from the increased property tax revenue resulting from the property’s improvement.
Steve Sobiek, the city’s director of business development and planning, said the entire property is included in the tax increment district, but there is nothing to prevent dividing the land into separate parcels.
Besides the Kmart parcel, there also is a 1.25-acre south lot and a 2.38 acre north lot. The north lot includes the former Fashion Bug building.
Artists’ conceptions of the area’s proposed development show two additional buildings — one near the existing Aldi grocery store, which is proposed to be a fast-food restaurant, and the other behind the existing Subway restaurant, whose purpose has not been determined.
Lynn said the business entity that has declared intent to buy the Kmart property intends to use the existing building, which has about 86,000 square feet of space.
What products the prospective retailer plans to sell can’t be disclosed yet, Lynn said.
Nor does anyone yet know how much work needs to be done to the building, and at what cost, to bring the structure to compliance with building codes and adapt it for the prospective new owner’s needs.