Tecumseh Redevelopment

New Holstein 2020 Feasibility Study

The former Tecumseh property, 1604 Michigan Avenue, New Holstein, WI, has a history that dates to the 1800’s where Lauson Engines was established. The company changed hands and names and eventually became Tecumseh Products Company. The facility increased its size to a 400,000 square foot manufacturing facility located on 40 acres of land. In the year 2000, Tecumseh Products Company employed close to 2,000 workers at the plant, manufacturing small engines. Tecumseh’s business began to fail around 2006. In 2007, Tecumseh sold the plant to Heus Manufacturing; a local custom metal fabricator located about 6 miles west of the City of New Holstein. Heus utilized the facility until 2009, when their business failed, and then abandoned the plant.

Based on an engineering firm’s assessment of the plant, the heating, plumbing and electrical systems are no longer in working condition. Copper has been stripped from the electrical system. The plant has deteriorated to an extent that the entire facility will be razed. The City and the New Holstein Economic Development Corporation obtained estimates to rehabilitate portions of the structure for reuse and determined that this would be cost prohibitive.

Since the time Heus Manufacturing abandoned the plant, a number of initiatives have been undertaken by the City of New Holstein, the New Holstein Economic Development Corporation, and the City’s Community Development Authority. In 2011, the NHEDC, hired Vierbicher Associates, Inc. to prepare an Economic Development Strategic Plan for the City of New Holstein. The plan identified four targeted economic outcomes for the city, with reuse of the Tecumseh site as being one of them. As a result of this plan, the City of New Holstein received a $100,000 grant from the WDNR WAM for the former Tecumseh site. The WDNR and EPA agreed that the site needed a Phase 1 ESA, Phase II ESA and a Site Investigation. The City of New Holstein contracted with Robert E. Lee & Associates, Inc. to complete the project. Phase 1 was completed in January of 2011 and a summary of the Phase II Assessment was submitted to the WDNR in January 2013.

In 2014, the City of New Holstein was awarded a grant from the Wisconsin Economic Development Corporation (WEDC) to complete a development plan for the site. The City hired Stadmueller & Associates to complete the plan.

Over the next three years (3), the City worked to gain access to the property and to continue to work out a plan for the site. The potential for redevelopment of the site has stalled due to environmental contamination, the size and scope of the redevelopment including demolition and remediation, obsolete platting and ownership by a party with little interest in redeveloping the property. In 2017, the City took ownership of the parcels through tax receivership for no consideration. The City has obtained VPLE from the WDNR for the property. This is important as this allows future developers and the City to be exempt for any contamination that may have occurred on the property.

In May of 2019, the City created an Environmental Remediation Tax Increment District (ER-TID) over the parcels. This type of TID is advantageous to the property as it allows the City to place the base value of the land at $1 and will increase in value as development in this TID occurs. The increment earned in this TID can be used to pay for the cost of redeveloping the property.

The City will be applying for an Idle Sites Grant in 2020/2021. As a part of this application, the City needs to have a market feasibility study completed. In 2019, the U.S. Economic Development Administration (EDA) awarded the City a grant to perform the market feasibility study. The CDA will be sending out an RFP for this project in February with a completion date of June 30, 2020. The next steps, after the study, will be the application for the Idle Sites Grant and a CDBG Public Facilities Grant which will aid in covering some of the cost of demolition.

There have been a lot of pieces to a complex puzzle that needed to be put together to redevelop this complex site. The City and CDA continue to work towards the redevelopment of this property to open it up for new development in our City.

February 3, 2020 – Tecumseh Property Market Feasibility Study Released
March 9, 2020 – CDA agrees to request CDBG-CLOSE matching funds from Calumet County and to move forward with the CDBG-PF grant for the removal of Slum and Blight on the property.
March 16, 2020 – Vandewalle & Associates Selected as the firm to complete the Market Feasibility Study

April 28, 2020 – The estimated cost to demolish the building structures on the site is estimated at $2.2M. By removing the buildings the property will become more attractive to potential developers. In an effort to reduce the amount that the City will need to borrow, they will apply for two different grants. The first grant will be a CDBG-PF in the amount of $1M. This grant requires a 50% match. The matching funds will come from the Calumet County CDBG-CLOSE funds in the amount of $357,717 and the remaining $142,283 will come from the City’s Community Development Reserve Account. The second grant is the $500,000 Idle Sites Grant offered by the WEDC. This grant has a matching fund requirement as well. The City will use its available debt capacity to borrow the remaining funds that are needed to complete this phase of the site redevelopment.