Marshall apartments could see ownership change
JANESVILLE--The company that manages the Marshall School Apartments at 408 S. Main St. is asking the Janesville City Council to forgive several loans so the company can buy out its partner.
The council at Monday's meeting could forgive a $175,000 repayment to a TIF district and $225,000 repayment in housing funds.
Stone House Development, a Madison-based development company, and Housing Horizons renovated the former Marshall Middle School for about $5 million in the late 1990s. The deal included a 30-year lease with the Janesville Performing Arts Center, which operates in the former school auditorium. Rent is $1 a year.
The entities also donated to the city the property between the school and Hedberg Public Library.
The agreement gave Housing Horizons the option to force Stone House to buy out Housing Horizons' interest, which it is now doing.
“When financing of the project was initially evaluated, it was believed that the loans would fill the project's funding gap, that sufficient cash flow would exist to service the debt and that the value of the property would grow to sufficient value to provide for the repayment of all city loans,” said Jennifer Petruzzello, neighborhood and community services director.
The decline in the housing market was not anticipated, she added.
The state of Wisconsin Investment Board, which holds the property's primary mortgage, approved the buyout but is asking for personal guarantees from Stone House owners.
Three different loans in 1997 supported the redevelopment of the property, which includes 55 apartments.
TIF No. 17 was created and contributed a $175,000 loan.
Stone House guaranteed a minimum property value of $1.9 million and minimum annual property tax payments of $42,400.
Another $225,000 loan came from federal HOME money to create affordable housing.
Thirty-three Marshall School Apartments are for low-income residents and are occupied. The owner must maintain the affordable housing units for another 14 years.
Another $150,000 came from the Wisconsin Rental Rehabilitation Program.
Stone House is asking the city to forgive the TIF loan and the HOME loan. It also hopes to restructure the rental rehabilitation program loan.
The TIF district has been successful, Petruzzello said.
Even with the TIF loan forgiven, the TIF would have a positive balance of $30,000 in 2017, she said.
Petruzzello acknowledged the HOME money not paid back would have been available for other affordable-housing projects.
But Stone House would continue to maintain the 33 affordable housing units for another 14 years, she said.
If it does not get the help it needs, it could choose to put the property up for sale, she said.
“The historic renovation of this building for apartments contributed to the redevelopment of the east bank of the Rock River and has prevented the building from falling into disrepair,” Petruzzello said.
“Stone House has shared that they feel this has been a mutually beneficial relationship and that they are interested in protecting that for the future,” Petruzzello said.
Members of the city's community development authority, which makes affordable-housing recommendations to the council, gave the plan a positive recommendation on a 6-1 vote.
Groups ask city for money for pavilion
JANESVILLE--Two private organizations that are putting a roof over the stage in Janesville's Lower Courthouse Park will ask the city council Monday to chip in $75,000 for the project.
The city money would come from the parkland acquisition fund.
Total cost of the project is estimated at $225,000.
The project, spearheaded by the South Central Wisconsin Builders Association and Forward Janesville, will be completed using a combination of donated money, materials and labor.
The builders association unveiled plans in 2007 for a similar project that included landscaping and electrical work. Plans stalled during the recession.
Now, the family of Marvin W. Roth, a deceased city booster, is donating $50,000 to the project. The pavilion will be named after Roth.
Another $50,000 comes from an anonymous donor.
Construction is scheduled for late summer.
The concrete stage was built in 1982. The city has maintained the park since 1863.
The stage is used mostly for summer musical performances.