MONROE — A business endeavor which had dragged on for five years after development agreements were signed between a processing infant formula business and the city was ended by seven members of the Monroe Common Council during its meeting Monday.
Roughly 10 minutes of discussion took place before council voted on the re-conveyance of just over 20 acres of land in the north industrial park, which was purchased by Amlat LLC of Madison for $447,000 in July 2013.
The city agreed to a refund of the purchase price and to not charge more than $100,000 in non-performance fees against Amlat to take back the land. Non-performance penalties are charged against a property meant for development if it does not meet an anticipated tax value within a certain amount of time.
Attorney and administrative fees for roughly $27,000 would be subtracted from the refund amount, leaving Amlat with about $420,000 to pay off its mortgage through a local bank and to pay its remaining 2017 property taxes.
Council members had convened in closed session during its last three meetings to discuss the Amlat development. City Administrator Phil Rath said business owner Dong Han of Beijing, China, was sent a letter asking to consider allowing the city to take back the land. He said the company was given until July 13 to respond.
“They have agreed to those terms,” Rath said.
Han first made a deal with the city to develop the land as an infant formula processing plant after contaminated formula in China caused the death and illness of thousand of infants in China. Han had proposed the 50,000 square-foot facility would bring roughly 200 area jobs and would use local milk sources to create the formula, which would then be shipped to China to address high demand in the country.
However, as years passed, Amlat continued to miss its anticipated date to break ground in the industrial park. It was initially meant to be completed roughly three years ago. Han, through consultants and attorneys, explained to council members that the lack of development was due to unforeseen restrictions with the federal government. She had been relying on the EB-5 visa program, which grants visas to foreign investors who contribute a minimum of $500,000 to a United States project, and said it was difficult to secure funding because the costs of construction had increased over time.
When funding became a concern, the delays led to problems with securing previously hired construction crews and halted the project even more.
Han repeatedly expressed an interest in pursuing the development during past meetings. The idea for Amlat came from Han after she worked as the chief financial officer for another milk processing company, Union Milk Company, which had planned to put at least two similar facilities in southwestern Wisconsin.
According to records from the Wisconsin Department of Financial Institutions, Union Milk was dissolved in January after failing to meet annual report requirements. The company was considered delinquent in its LLC status in July 2016 and sent notice a year later. When two attempts to contact Union Milk Registered Agent Nathaniel Kang Hsieh between mid-July and mid-November were returned undeliverable, the state followed through with an administrative dissolution. Another company registered under Hsieh called CTC Tobacco Company followed the same path, liquified Nov. 27.
During discussion Monday, fellow council member Mickey Beam questioned whether not imposing the non-performance penalties would mean the city was losing money. Rath assured the council members that because the fees were only based on a future development, there was no financial loss for the city and that the loss is “only on paper.”
“We’re not out anything by foregoing those penalties,” Rath said. “Those penalties only exist because of an agreement we had with them.”
He added that the city saved money in the time the parcel of land sat vacant because Amlat was covering the cost of land maintenance.
City Attorney Dan Bartholf drafted a specific, detailed motion for a council member to read because of the complicated nature of rescinding on the development agreement. Reading the language aloud, Alderwoman Donna Douglas moved for the council to make the deal, also granting Mayor Louis Armstrong and Rath the authority to sign any necessary documents related to it.
“I think it’s time for us to move forward and shut the door on this,” Douglas said.
Council members Michael Boyce, Brooke Bauman, Richard Thoman, Ron Marsh, Rob Schilt, Douglas and Beam voted unanimously in favor of taking back the 20-acre parcel. Aldermen Chris Beer and Jeff Newcomer were absent.