The $6.2 Million Is Just the Down Payment
- Alex Saloutos
- 3 hours ago
- 8 min read
Key Points
Eleven parcels included in the acquisition have no economic value and are liabilities, not assets.
The city is paying top dollar to take over a project the developer is abandoning after 15 years.
The resolution authorizes a $6.2 million down payment, committing the city to a large, complex capital project with unknown city liabilities and no plan.
The city is not applying the financial standards it requires of private developers seeking TIF assistance to itself.
The Finance Committee recommended approval without examining these issues.
On March 2, the Finance Committee took up a resolution to spend $6.2 million of public money to acquire 17 parcels of vacant land at Royster Corners along Cottage Grove Road. Staff gave a presentation. Then the Committee voted unanimously to recommend approval. There was no discussion. No one asked for the appraisal. No one asked what the city intends to build, what it will cost, or whether the tax increment district financing the deal can support it. The meeting video is 29 minutes long.[1]
That vote is scheduled to come before the full Common Council tonight, March 10.
Before the Council acts, it should know what the Finance Committee didn't ask.
A Developer Walks Away After 15 Years. The City Buys What's Left for Top Dollar.
RDC Development, LLC, the development and construction firm better known as Ruedebusch, purchased the former Royster-Clark fertilizer plant site in 2011 and began development in 2013.[2] To support the project, the city created TID 44 (Royster Clark) on September 17, 2013, with a closing date of September 17, 2040. The Project Plan was last amended on February 3, 2025.[3]
Sometime in 2025, the city learned that RDC wanted to sell its remaining holdings and walk away. On September 24, 2025, the city issued a Request for Bid to Bussen Appraisal for an appraisal of the six parcels with development potential.[4] Six months later, the Council is being asked to authorize $6.2 million to buy all 17 parcels: six developable ones and eleven that cannot be developed.
Eleven Parcels the City Will Never Build On
When the city and RDC sat down to negotiate, the transaction expanded. The developer added 11 parcels to the deal that were not part of the original appraisal request. Every one of them carries overhead high-voltage transmission lines. Several have transmission towers. MG&E's substation at 310 Cottage Grove Road sits directly adjacent to 832 Royster Avenue, the southernmost of these parcels.
City staff confirmed on March 10 that all 11 parcels will remain undeveloped open space.[5] Staff also used a specific phrase to describe them: "disposition or liquidation properties."
No appraisal has been completed for any of these 11 parcels. Their combined 2025 assessed value is $282,100.[6] The city has not disclosed what portion of the $5.2 million purchase price is being paid for them, despite a direct question.
If the city acquires these parcels, it will own land encumbered by MG&E easements, with no ability to develop and an ongoing obligation to maintain. These are not assets. They are liabilities. And the city has no independent basis for valuing what it is paying for them, because it never asked for one.
The 11 parcels should be removed from the acquisition entirely. Staff should be directed to work with the seller and MG&E to transfer those parcels to MG&E.
A $6.2 Million Down Payment on an Unknown Total
The resolution authorizes $6.2 million for acquisition and pre-development costs. What additional TID 44-supported borrowing or other financial subsidies will be required to complete redevelopment of these parcels, from acquisition through completed development, and TID 44's capacity to support them, have not been estimated or disclosed.[7]
The district closes in September 2040. Whatever the city builds needs to generate enough tax increment to recover the investment before that deadline. No one has calculated whether that is possible.
This is how large cost overruns begin. An initial commitment is made before the full cost is known. Subsequent funding requests arrive after sunk costs create pressure not to walk away. The questions that should be answered before the first commitment are harder to raise after it.
The Council is being asked tonight to make that first commitment, without a development plan, without a cost estimate for the full project, and without a determination of TID 44's capacity to support what comes next. Staff confirmed in a March 4 email that a development plan is being drafted but is not complete.[8]
The Standards the City Requires of Others, But Not Itself
When a private developer seeks TIF assistance from the city, the process is rigorous. The city requires a written underwriting analysis that includes: total project cost and a documented funding gap, estimated assessed value and projected tax increment over the life of the TID, average annual increment, compliance with the city's TIF policy (including the 50% rule and developer equity requirement), the "but for" test, and a developer goals statement. The city also requires developer equity at or above the loan amount, a cost-certification audit, clawback provisions, an increment guaranty, and a subordinated mortgage to secure repayment.[9]
The Royster Corners resolution authorizes $4 million in new General Obligation borrowing supported by TID 44. None of the analysis described above exists. There is no gap analysis. There is no increment projection. There is no feasibility determination. There is no repayment mechanism.
The fiscal note for this resolution identifies the funding sources and confirms the money is available. It does not disclose the appraised value or assessed value of the properties, the city's total financial exposure to complete the project, the impact on TID 44's debt service capacity, or whether the district can recover the investment before it closes in 2040.[10] City ordinances and an Administrative Procedure Memorandum require a fiscal note in all legislation, but they set no standards for what it must contain. The result is a fiscal note that technically complies with the requirement while failing to serve its purpose.
There is also an unresolved question about the project plan itself. TID 44's Project Plan allows cost adjustments between line items without a formal amendment, provided total eligible costs do not exceed the authorized cap of $8,869,700. Whether $4 million in new borrowing requires a third project plan amendment before acquisition costs can lawfully be charged to the district has not been disclosed. How much of the $8,869,700 cap has been spent or committed has not been disclosed.[11]
What the Finance Committee Didn't Do
The Finance Committee exists to provide the financial review that the full Council cannot practically conduct on the floor. A unanimous recommendation is meaningful only when the Committee has done that work.
On March 2, the Committee did not ask for the appraisal or the appraised value of the six parcels. It did not ask why 11 parcels with no development potential are included, or what the city is paying for them. It did not ask for an estimate of the total cost to develop the six parcels from acquisition through completed redevelopment. It did not ask for an analysis of TID 44's debt service obligations, remaining borrowing capacity, or ability to recover the investment before the district closes in 2040. It did not ask whether the project plan authorizes this acquisition or whether an amendment is required. It did not ask for a development plan or a financial plan.[12]
These are not obscure questions. They are the questions a Finance Committee review exists to answer.
Referring this legislation back to Finance with direction to answer them is not a vote against the project. It is a vote for doing the job correctly.
What the Council Should Do
The record does not support a vote to approve this resolution tonight. The Council should refer it back to the Finance Committee and direct staff to complete the following before the Committee takes it up again.
Remove the 11 undevelopable parcels from the acquisition and direct staff to work with the seller and MG&E to transfer those parcels to MG&E.
Obtain a new appraisal of the disposition value for the six developable parcels that addresses the deficiencies identified in my March 7 memorandum.
Provide a development plan and a complete TIF underwriting analysis demonstrating that TID 44 can support the full cost of the project from acquisition through completed redevelopment before the district closes in September 2040.
Provide a fiscal note that discloses the full nature and extent of the financial impact of completing the development that this legislation provides the down payment for.
A Pattern Worth Naming
This is not an isolated failure. Staff does not routinely provide the analysis that large financial commitments require. Committees, commissions, and the Council do not routinely demand it before voting. The result is that public funds are committed without the information needed to evaluate the consequences.
The Royster Corners acquisition illustrates that pattern clearly. Staff has been working on this since at least September 2025. Six months later, the legislative file contains no staff report, no feasibility study, no market analysis, and no development plan.[13] The Finance Committee voted unanimously after a staff presentation with no discussion. Tonight, the full Council is being asked to commit $6.2 million to start a project whose total cost is unknown.
That is not a trivial procedural objection. It is how a city ends up committed to a project it cannot finish, at a cost it did not anticipate, with a TID district closing before the investment is recovered.
The Council has the authority to require better. It should use it tonight.
If you want to weigh in before tonight's vote, contact your alder directly. The Common Council meeting begins at 6:30 p.m. You can find your alder's contact information at cityofmadison.com/council. The legislative file for Legistar File No. 92015 is available at madison.legistar.com.
Footnotes
[1] City of Madison Finance Committee, meeting of March 2, 2026. Video available at: https://www.youtube.com/watch?v=6dg9wD1PJ6M.
[2] Legistar File No. 92015, Resolution and supporting documents. Available at: https://madison.legistar.com/LegislationDetail.aspx?ID=7921357&GUID=1FB71FEA-5BC9-46BA-87B1-0B64337ED0D7.
[3] TID 44 (Royster Clark) Project Plan, as amended February 3, 2025. Available at: https://madison.legistar.com/LegislationDetail.aspx?ID=7921357&GUID=1FB71FEA-5BC9-46BA-87B1-0B64337ED0D7.
[4] City of Madison, Office of Real Estate Services, Request for Bid, Appraisal Services, Royster Corners, September 24, 2025.
[5] Email from Rolfs to Saloutos, March 10, 2026 (confirming the 11 parcels will be kept as undeveloped open space; characterizing them as "disposition or liquidation properties"; not disclosing the purchase price allocated to them). Available at: https://www.dropbox.com/scl/fi/wunnpyxfvdwkjgpvwv8eq/280304_LEGISTAR92015_EMAIL_ROLFS-SALOUTOS.pdf?rlkey=yh99tttecgel1y6lsbn670tzw&dl=0.
[6] City of Madison, 2025 Property Assessment Records (City Assessor's Office). Available at: https://www.cityofmadison.com/assessor.
[7] Email from Rolfs to Saloutos, March 4, 2026 (staff confirming a development plan is being drafted but is not complete). Available at: https://www.dropbox.com/scl/fi/wunnpyxfvdwkjgpvwv8eq/280304_LEGISTAR92015_EMAIL_ROLFS-SALOUTOS.pdf?rlkey=yh99tttecgel1y6lsbn670tzw&dl=0.
[8] Ibid.
[9] Legistar File No. 82564 (Vermillion Madison LLC TIF Loan, TID 54), including staff memorandum by Joe Gromacki, TIF Coordinator, dated March 20, 2024. Available at: https://madison.legistar.com/LegislationDetail.aspx?ID=7921357&GUID=1FB71FEA-5BC9-46BA-87B1-0B64337ED0D7.
[10] Legistar File No. 92015, Resolution and supporting documents. Available at: https://madison.legistar.com/LegislationDetail.aspx?ID=7921357&GUID=1FB71FEA-5BC9-46BA-87B1-0B64337ED0D7.
[11] TID 44 (Royster Clark) Project Plan, as amended February 3, 2025. Available at: https://madison.legistar.com/LegislationDetail.aspx?ID=7921357&GUID=1FB71FEA-5BC9-46BA-87B1-0B64337ED0D7.
[12] City of Madison Finance Committee, meeting of March 2, 2026. Video available at: https://www.youtube.com/watch?v=6dg9wD1PJ6M.
[13] Legistar File No. 92015, Resolution and supporting documents. Available at: https://madison.legistar.com/LegislationDetail.aspx?ID=7921357&GUID=1FB71FEA-5BC9-46BA-87B1-0B64337ED0D7.
The author is a licensed Wisconsin real estate agent with 40 years of experience in building and development.
77SquareMiles.com covers what mainstream media won't—because democracy dies in darkness, especially at City Hall.
© Alex Saloutos 2026.