Spectrum Brands, maker of Rayovac batteries, Remington shavers and other consumer products, plans to expand its Middleton headquarters with $700,000 in public financing.
Middleton’s City Council on Tuesday granted conceptual approval for tax increment financing (TIF) to help commercial real estate firm Livesey Co. expand the less than 3-year-old building it owns and rents to Spectrum at 3001 Deming Way.
Livesey plans to spend at least $5 million on a 30,120-square-foot addition and expanded parking at the south end of the existing 220,000-square-foot office. The original building was designed to accommodate up to 675 employees and built for about $25 million, including $3.5 million in TIF from Middleton.
Spectrum spokesman Dave Prichard said the office currently houses just shy of 600 employees, not including open positions, but added that the company is expanding the office now to allow lead time.
“Our projections call for some degree of continued job growth in this facility,” Prichard said. “As we’re getting close to capacity in the existing headquarters, it’s not too soon to move ahead with an appropriately sized expansion to accommodate expected job growth.”
The addition would boost the building’s capacity by about 100, Prichard said.
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The $700,000 in TIF tentatively approved for the project would be developer-financed, meaning Livesey would front the money for the project and the city would pay its commitment using increased tax revenue from the development. The method is meant to mitigate risk to municipalities.
Livesey owner John Livesey did not return a phone call, but city administrator Mike Davis said staff believe the expansion would generate enough to pay off city obligations by 2025.
In his March 28 TIF request, Livesey cited special site preparation related to stormwater management, poor soil conditions, and the project’s inclusion of energy-efficient materials and equipment as “unusual costs above and beyond what would be the normal construction costs.”
The Spectrum site is located in what was once glacial Lake Middleton. Mayor Kurt Sonnentag said boundary agreements with neighboring towns have limited areas for commercial development within the city, so the city has typically used TIF to support development in the area despite poor soil conditions.
“There’s a lot of extra expense for somebody that wants to build a building that normally you wouldn’t have in other places,” he said. “We allow (TIF) just to make our area competitive with other areas.”
Spectrum moved to Middleton in October 2013 after nearly three decades along the Beltline in Madison. Executives considered leaving Wisconsin, but cited a $4 million forgivable loan the company received in 2012 from Wisconsin Economic Development Corp. as a significant factor in the decision to stay in Dane County.
Spectrum originally signed an 18-year lease with Livesey. Expansion of the building would trigger a reset of the lease to last approximately 17 years from the time construction is complete, Prichard said.
Middleton officials are expected to consider final TIF approval as part of a development agreement on May 3. Pending approval, construction on the addition is expected to begin next month and be completed by next spring.