In 2004, Great Wolf Resorts opened the Blue Harbor Resort waterpark hotel in Sheboygan. The City of Sheboygan helped out with $10.2 million in infrastructure improvements, a $4 million loan to build the hotel and an additional investment of $8 million to build a city-owned conference center (managed by the hotel) next door.
Last year, Great Wolf took a $24 million write-down on Blue Harbor, valuing the hotel at $6 million. They also sued the city, arguing that their assessment was much too high and they had overpaid their property taxes for the past few years. They reached a settlement, and the City of Sheboygan will refund almost $263,000 in property taxes. The settlement money will come from the TIF district that includes Blue Harbor.
Meanwhile, Great Wolf is trying to sell the Blue Harbor Resort.
The moral of the story is that cities should be very careful about investing millions of dollars in hotel projects in the name of economic development and tourism. Taxpayers should not finance real estate speculation.
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2 comments:
We may agree on something here. "Let's go vacation in....Sheboygan"? Sheboygan isn't even a nice, "whitebread and mayo"-type city anymore. It's as blighted by crime, drugs and poverty as places like Racine and Milwaukee these days. Plenty of gang activity, too. Business and industry are leaving at an alarming rate (Pentaire, Thomas to name 2). Bottom line, rather than financing speculation, Sheboygan should be dealing with other priorities.
I'm sure the city fathers and mothers gave away all the money in the mistaken belief that all sorts of dandy jobs would be created.
Now where have we heard that before?
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