Janesville TIF deal could bring SHINE's corporate offices downtown
JANESVILLE—Under a proposed city development deal, medical radioisotope startup SHINE Medical Technologies would move its corporate headquarters and at least 80 employees to office space in the heart of downtown Janesville.
The owners of Prospect 101, a six-story office building at the corner of East Milwaukee and South Main streets, are seeking a tax-increment financing loan totaling $384,100 to to help them renovate the vacant top floor of the building, according to a city memo.
The Janesville City Council will consider the TIF deal Monday night.
The building owners, listed in city documents as 101 E. Milwaukee St. LLC, plan $560,000 in renovations to the upper floor in a play to secure SHINE's corporate division as a tenant.
Monona-based SHINE plans to break ground late this year or early next year on a $100 million medical radioisotope production facility off Highway 51 on the south side. SHINE got the green light earlier this year from federal nuclear regulators to build the 50,000-square-foot facility. It would use the facility to produce molybdenum-99, a material used to illuminate body tissue and bone in medical testing procedures.
Under a TIF development loan proposal, the property's owners would complete renovations and infrastructure upgrades in the building, and SHINE would locate its corporate offices there for five years.
In a city memo, Economic Development Director Gale Price wrote that having SHINE's headquarters downtown would be a boost during a "turning point" for the area.
This fall, the city will move forward on the early phases of ARISE, a revitalization plan for the downtown riverfront area, and a few investors have begun renovating aging properties with plans to develop new retail businesses there.
“Downtown Janesville is at a turning point in the desirability of businesses to locate within the downtown. …The impact of 80 additional high-paying jobs to the downtown can be significant, as many of those employees will be dining, meeting and shopping within the downtown on a daily basis,” Price wrote.
Under the TIF deal, it's not clear how quickly renovations would take place at Prospect 101 or when SHINE would move in. Price said SHINE and the developer have a tentative agreement, but a lease is not fully set.
It would be the second time in less than a decade that the city has invested in private renovations at Prospect 101.
In 2009, the city reimbursed the property's owner $500,000 for what the owner had tabbed as a $4.5 million rehab of the building, and it agreed to a development loan of $360,000 to help the developer finance renovations.
However, that earlier redevelopment of Prospect 101 never reached the sixth floor of the building, which is the floor where SHINE's offices would be located. A rehab of the top floor was halted in part because of the souring economy, a spike in construction costs and a soft market for office space downtown that lingered for a few years after the Great Recession, Price wrote.
Price said the building's sixth floor has remained vacant.
Under the deal, the city would agree to a new $260,000 loan, and it would refinance $124,000 leftover on the 2009 development loan. The new loan would have to be repaid by the developer in annual installments. The deal also would require property tax payments that would repay the city's $500,000 reimbursement from 2009.
The proposal also is not the first time SHINE has been connected to city tax incentive deals.
In 2012, the city agreed to a $9 million incentive development agreement with SHINE, which included guarantees of $5 million in utilities, land and the city's backing of $4 million in private loans, to secure the company's commitment to build the radioisotope facility in Janesville.
In that time, SHINE has raised millions in private capital for the project. It also won funding from federal sources, which helped it forge ahead with planning through the long federal permitting process.
Price said the city is preparing to run utilities for SHINE's future production facility. SHINE officials weren't immediately available for comment, but the company has been in the latter stages of raising capital to move the Janesville project into the construction phase.
Earlier this year, SHINE officials said they intend to break ground on the Janesville project late this year or early next year. They said the facility was slated to be up and running in late 2018, pending federal approval of an operating permit.
SHINE's project plans at some point will include a 10,000-square-foot corporate office building on the campus of its south-side production facility. But the construction of corporate offices is not tied to SHINE's original incentive deal with the city, and the deal doesn't necessarily require it, Price said.
“Corporate offices aren't their paramount project. If they build an office building down there, it's icing on the cake, but you really don't have to have that to make the TIF work,” Price said.