Downtown Edgerton development faces uncertain future
Fulton Square update
Developer Tom Keller said he hopes Fulton Square will be ready for residents by early April.
Real estate agents Paula Carrier and Chris Sweeney plan to start holding open houses every weekend starting in late March or early April, they said.
They also plan to resume monthly weeknight forums about the same time, they said.
The mixed-use project features 26 condominiums, ranging in price from $116,000 to $190,000, and 16,000 square feet of retail space. Petry Chiropractic & Wellness recently bought 3,200 square feet of space and hopes to move in within 90 days, Carrier said.
Keller hopes to sell one or two condos a month, he said. At that rate, the project will fill in about a year and a half.
EDGERTON Paula Carrier gets excited when she walks into the nearly complete Fulton Square project in downtown Edgerton.
"Look at that long hallway," the real estate agent said on a recent tour. "I can still hardly believe it."
After two years of planning and building, the retail and residential project should wrap up major construction in the next four to six weeks.
But the project, like many mixed-use developments, faces an uncertain future.
No one expected today's sour economy more than two years ago when Keller Development announced the $6.1 million project, assisted by nearly $1.2 million in tax incremental financing from the city.
Experts say mixed-use projects such as Fulton Square have seen mixed results during the recession, but those involved with the Edgerton project say they're confident it will succeed.
"My expectations have not changed on that project because of the economy," Mayor Erik Thompson said. "I know that it will be a success for the city."
Carrier is one of two real estate agents hired to market the development's 26 condominiums. Though no one has bought a condo yet, she estimates interest has tripled in the last few weeks as workers finish the exterior.
The recession carries some benefits to homebuyers, she said. Rates and prices are low, and the new federal stimulus package offers an $8,000 tax credit for first-time homebuyers in 2009.
"People are still going to need housing, and if the price is good and the rates are good, there's still going to be a demand," she said.
The development recently closed on a sale of 3,200 square feet of retail space, nearly a quarter of the total, to Petry Chiropractic & Wellness. It has seen interest from several other businesses, including a sporting goods store and coffee shop, Carrier said.
But interest is one thing; closing the deal is another, said Jeff Farnsworth, part owner of the newly renovated Eager Economy Building in downtown Evansville.
Farnsworth and his partners completed construction on the mixed-use downtown building more than a year ago. They've leased six of eight apartments, but they're having trouble filling retail space.
"It seems that nobody can pull the trigger right now," he said.
Many, though not all, mixed-use projects are struggling, said Steve Malpezzi, professor of real estate and urban land economics at the Wisconsin School of Business.
"Some mixed-use projects have not done as well as hoped, and that was even before the economy turned down, but that doesn't mean every mixed-use project can't work out," he said.
Mixed-use developments have become more popular in the last two decades because they're more environmentally friendly than the urban sprawl popular in the 1960s and '70s, he said.
But the projects face special challenges because they depend on the retail and residential markets, both of which are weak right now, he said.
Anita Kramer, director of retail and mixed-use development for the Washington, D.C.-based Urban Land Institute, said the problem isn't mixed-use developments but the real estate market as a whole.
She believes mixed-use developments will remain popular after the recession, she said.
"For many reasons, the mixed-use (project) in the right location will remain strong, as strong as it can be at this time, and will come out of this strong," she said.
Carrier believes Fulton Square is in the right location. It offers a vibrant downtown setting in the middle of an attractive bedroom community, she said.
"I just feel bad for those who are going to wait two years, and the prices are going to go up, and the rates are going to go up," she said. "They're going to be unhappy."