ASC TIF Gets Green Light

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MTT News Desk's picture
By: 
Matt Geiger
An architectural rending of the proposed ACS building.

The Middleton Common Council on Jan. 15 approved The Carey Group’s request for $400,000 in developer-financed Tax Increment Financing (TIF). The deal is designed to attract Affiliated Construction Services (ACS) to a yet-to-be-built facility in the Good Neighbor City.

ACS currently has locations in Verona, Madison, China and the United Kingdom. A representative for the company said the Verona facility is undersized, as well as being too far from the company’s Madison office.

The Madison-based developer’s formal request for TIF, dated Jan. 2, said The Carey Group Real Estate Services, LLC is pursuing a 40,000 square foot build-to-suit development for ACS on Lot 19 within the Middleton Corporate Center. (The parcel is on the northwest corner of Nursery Drive and Deming Way.)

“In an effort to provide ACS with favorable economic terms and a level playing field relative to the competition, we are seeking city assistance through developer-funded TIF financing,” wrote developer Timothy Carey in a letter to city planner Eileen Kelly.

ACS is a single-source provider of what it calls “fully integrated facility and equipment solutions,” serving the international engine- and vehicle-testing markets. The company specializes in the design, construction, integration, and commissioning of development and production testing facilities for engine, vehicle, and components manufacturers.

Created in 1978 as a spin-off from Flad Architecture, the company has grown to provide services internationally, serving Harley Davidson, John Deere, Cummins, Detroit Diesel, Navistar, Caterpillar, Whirlpool Corporation and other companies.

The building being planned here would include both manufacturing quarters and warehouse space.

The preliminary development budget, according to Carey’s figures, is $4.34 million. It includes $605,000 for the land, slightly more than $3.155 million for construction, and $580,000 to remedy “soft soils.”

According to Middleton’s city administrator, Mike Davis, the TIF promised last week will be “primarily for soils remediation as well as an economic development incentive to ACS.”

Davis said the company will bring about 40 total employees to Middleton, including 25 who work in manufacturing or support, and 10 to 15 engineers from the company’s Madison office. Davis said ACS’s current facility in Verona is “undersized.”

According to Carey and assuming all aspects of the deal are finalized, ACS will move its manufacturing operation to Middleton along with about 25 full-time employees with gross wages ranging from $16 to $43 per hour, with an average of $27.50 per hour. ACS also expects to move the salaried engineers from its Madison office building to the facility within the next 18 months.

ACS would be bringing $800,000 of existing machinery from its current facility and anticipates acquiring new personal property of approximately $600,000 to equip the new facility, according to Carey.

The developer said he hopes to have the lease executed by January 31. He wants to earn final city approval of the project by the end of February. If all goes as planned, the development would break ground March 15 and be completed by mid-September of this year.

Carey said the land is currently assessed at $1,095,800. He estimated the ACS building would push that figure to around $3,472,000, creating $2,376,200 in new incremental value. If those numbers are accurate, the TIF will have a payback period of eight years.

The land and building would be owned by a “to-be-formed entity [named] Nursery Drive Investors LLC,” according to Carey. That LLC would be made up of Carey, who would have 50 percent ownership, and Moseng Family Limited Partnership, which would own the other half.

Under the plan approved by the common council last week, the $400,000 in TIF will be borrowed by the developer. The city doesn’t take out the loan, but it has pledged to make increment tax payments on the land until the borrowing is paid off.

Matt Thiel is ACS’s director of systems and equipment. He said the company needed to grow, and the Middleton Common Council’s offer of TIF will help ensure the company ends up growing here, rather than in another community. 

ACS primarily creates facilities and equipment that test vehicles – mostly heavy-duty diesel but also some passenger cars  - and other machinery, but it has also worked with companies outside that scope, including with Kettle Foods, designing a building that specializes in potato chips.

“Half of our business is the buildings,” said Thiel. “The other half is the equipment in them.”

ACS’s current Verona facility is about 20,000 square feet, and the company is leasing an additional 3,000. “Our goal with this new facility is to have something bigger, and to have something closer to our Madison office,” Thiel said.

Carey said his business is “really excited about the opportunity to establish a long-term relationship with ACS through the development of their new manufacturing facility.”

“ACS is deeply rooted in the community, thus making for a great partner given our long-term investment perspective,” Carey told the Times-Tribune. “The functional building design, proximity to their headquarters, and opportunity to expand the building as their business grows make this a desirable site for them.”

“This development is a great example of a number of local constituents joining forces to facilitate a long-term investment in the community,” he continued.

The Design/Build Firm for the project is ICONICA.

 

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