Postal Service May Get Extension For Mail-Processing Center

The deadline to begin construction on a mail-processing center at the corner of Pennsylvania and College would be extended two years under a proposed memorandum of understanding.

Under the terms of an ordinance approved in 2008, the United States Postal Service has to start construction on public and private improvements by Dec. 8, 2011.

But with the USPS suffering huge financial losses and , that deadline won't be met. According to a report to council members, the USPS has ceased all capital expenditures for new construction projects throughout the country. 

The Oak Creek Common Council on Tuesday will discuss a proposal to move the start date to Dec. 8, 2013. Tuesday's meeting is only one step in the process for an extension, however. Final approval won't come until after a public hearing, to held at a later date.

"Under the current economic climate, USPS is unwilling to commence construction, but is requesting that it retain the right to build the distribution center," according to the report.

In addition to extending the deadline for construction to begin, the MOU would dictate construction end by Dec. 8, 2015. 

Road work affected

Another impact of the USPS' financial woes is a roundabout that was to be installed as part of the . The USPS was supposed to fund it, but it won't now that plans for the mail-processing center are on hold, according to the report.

Instead, the roundabout will be funded the same way as the rest of the Pennyslvania Avenue construction project - 80 percent federal government, 10 percent Oak Creek and 10 percent South Milwaukee.

But more importantly, the roundabout will now be constructed as part of the , scheduled to end later this fall.

Milwaukee County needed a decision on whether to install the roundabout; USPS, still unsure about its future plans, directed Milwaukee County to complete the construction of the roundabout, the report said. The postal service must reimburse the county for that incremental cost, and modifications must be made on College Avenue.

Taxing the non-taxable

Additionally, the council on Tuesday will take up a measure that would rescind property taxes that were inadvertently collected on the postal service's 63 acres at College and Pennsylvania. 

USPS, by law, is exempt from general property taxes, but the city assessor's office continued to show the property as taxable for 2009 and real estate property tax bills were issued.

The total taxes for the property for 2009 was $3,932, which will be refunded.

Though the postal service does not pay taxes, the city and USPS worked out a deal similar to a payment-in-lieu-of-taxes agreement. The USPS purchased 20 acres, valued at $140,000, from the city for $1.6 million. That gave the city a steady stream of income from the investment, according to the report.