Appleton offers $2.1 million to convince U.S. Venture to move its headquarters from Kimberly

APPLETON — The city will provide $2.1 million to help U.S. Venture Inc. renovate the 222 Building on West College Avenue into a space suitable for the company's corporate headquarters, according to a development agreement negotiated by the two parties.

In addition, the city will reserve 650 parking permits in its Green Ramp for purchase by U.S. Venture at the lowest available rate.

In return, U.S. Venture will invest $40 million in the renovation and guarantee an assessed property value of at least $29.3 million. That's a gain of $16.4 million over the property's current value of $12.9 million.

As a condition of the 650 parking permits, U.S. Venture will redevelop five small parking lots in the College North neighborhood or convey them to the city for redevelopment.

"When complete, the project will reinvigorate the 222 Building, strengthen the vitality of the city's downtown district and spur on additional reinvestment in our downtown and surrounding neighborhoods," Appleton's Community and Economic Development Director Kara Homan said.

The city's Community and Economic Development Committee reviewed the development agreement in closed session last week and will meet again to vote on it at 6 p.m. Wednesday. The committee's recommendation could advance to the Common Council an hour later.

U.S. Venture spokeswoman Mercedes Bereza said the project has been a collaborative endeavor which will result in the adaptive reuse of the Appleton landmark.

"We're extremely grateful to the city, the mayor and the mayor's staff," Bereza told The Post-Crescent. "It's been really wonderful to have a joint vision of bringing this project to life."

U.S. Venture secures tax credits for headquarters

U.S. Venture announced in December that it planned to purchase and renovate the 222 Building for use as its new headquarters.

At the time, the project was contingent not only on the city's assistance, but also on the transfer of $20 million in enterprise zone tax credits previously granted to U.S. Venture by the Wisconsin Economic Development Corp. The transfer of the tax credits since has been secured.

U.S. Venture estimates that it will invest $56 million in the headquarters, including the purchase price and renovation. It will occupy all 10 floors and have room for growth. About 640 employees will be based in the 243,000-square-foot building by late 2025.

The company distributes renewable and traditional energy products, lubricants, tires and undercar parts and manages energy and information in the global movement of goods. It has more than 4,200 employees in 48 states. It currently is headquartered in Kimberly but desires to capitalize on, and contribute to, the vibrancy of Appleton's downtown.

Previously, U.S. Venture planned to build a new corporate headquarters on the bluff south of Lawrence Street. That's no longer in the company's immediate sights, though it still could build on the land at some point in the future.

The city and U.S. Venture have agreed to terminate their 2018 development agreement for the bluff site.

What are Appleton's financial responsibilities in the project?

U.S. Venture requested financial assistance from the city through Tax Incremental Financing District No. 11.

The development incentive will be the lesser of $2.1 million or 13% of the incremental value of the property on Jan. 1, 2026, plus interest (6.25%). The money will be paid only after sufficient property taxes have been collected on the new development.

When a municipality creates a TIF district, all the additional property taxes generated from new development in the district — the increment — goes toward reimbursing the municipality for any costs or commitments it incurred to bring about that development. The tax revenues from the increment are diverted from the school district, county and technical college for as long as the district is in place.

Where will U.S. Venture employees park?

Appleton will guarantee 650 parking permits in the Green Ramp in exchange for U.S. Venture redeveloping five small parking lots in the College North neighborhood. If the lots aren't redeveloped within five years, the lots will transfer to the city for redevelopment.

Mayor Jake Woodford said he wants to see the parking lots put to a higher and better use to reinvigorate the neighborhood.

"There are a couple of ways that could happen," Woodford said. "One is that the company markets and sells those properties to developers or redevelops them itself.

"But if the properties aren't sold and redeveloped within that five-year period as specified in the development agreement, there's a possibility that the company would actually convey those properties to the city of Appleton or the Redevelopment Authority so that the city can pursue redevelopment."

If U.S. Venture redevelops two additional parking lots immediately north of Washington Street, the city will guarantee an additional 200 parking permits in its ramps for purchase by the company.

Woodford said the Appleton has sufficient capacity in its parking ramps to accommodate U.S. Venture. The sale of the permits will support the city's parking utility.

What will happen to the tenants of the 222 Building?

Tenants currently in the 222 Building are Mondo! Wine Bar & Retail, Johnson Financial Group, ThedaCare, AIA Corp. and The Post-Crescent.

Bereza confirmed all of the leases will be honored.

"We are not forcing anyone out of the building," she said. "We're working with the tenants to ensure that their needs are met throughout the transition."

Johnson Financial Group elected to relocate to a new building at 4120 N. Galaxy Drive in Grand Chute.

Contact Duke Behnke at 920-993-7176 or dbehnke@gannett.com. Follow him on Twitter at @DukeBehnke.

This article originally appeared on Appleton Post-Crescent: Appleton offers $2.1 million to secure U.S. Venture's move downtown