Janesville City Council supports apartments, forgives loans
JANESVILLE--Janesville City Councilman Douglas Marklein remembered the pride in the community when the Marshall School Apartments opened in the late 1990s in the former Janesville High School
“It's a messy situation right now,” he acknowledged at Tuesday's city council meeting.
The owners of Stone House Development, who own and manage the apartments, must buy out their partners. But the depressed economy has hampered financial projections, and that means the group does not have the money it needs.
The city council agreed to forgive two loans and restructure a third to help the group maintain its ownership of the apartments.
A TIF loan of $175,000 will be forgiven, and Stone House will not have to repay $225,000 in affordable housing money.
Marklein made the motion to forgive the loans, but asked for three guarantees:
--That the owners continue to provide 32 affordable housing units for another 14 years.
--That the owners work with Janesville Performing Arts Center officials to approve another 30-year lease on top of the existing 30-year lease. JPAC pays $1 a year to use the auditorium in the apartment building.
"It is a treasure the residents of Janesville have grown to love,” Marklein said.
--That the owners release a deed so as not to impede potential redevelopment in the space between the apartments and the neighboring Hedberg Public Library.
Helen Bradbury of Stone House Development agreed to the three requests.
“Our project did not perform financially as we expected it would in 1998,” Bradbury said before the vote.
The development was affected by the economic downturn that began in 2009 and continues today, she added.
The value of the building is $1.9—$1 million below projections—and rent has stagnated.
Stone House has covered about $250,000 in losses, Bradbury said.
If Stone House cannot buy out its partner it would be removed as managers and the building would be sold to a third party, she said.
Jennifer Petruzzello, the city's neighborhood services director, said the development from 1998 to the present has paid $660,000 in property taxes—an amount greater than the three outstanding loans.
The company has maintained a historic building and anchor to the downtown, Petruzzello added. Stone House's partnership with JPAC has increased the city's quality of life and brings people to the central city.
“The TIF district, overall, was successful,” Petruzzello said.
Councilman Matt Kealy said the council action supports affordable housing and contributes to downtown revitalization efforts.