Grafft believes in a future for Janesville's Monterey Hotel

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Friday, October 2, 2009
— Jim Grafft says he’s a patient developer, one with the financial wherewithal to invest in properties for the long haul.

That explains his interest in the historic Monterey Hotel, which he bought at a bankruptcy auction in 1996.

With 13 years of ownership and several demolition projects at the hotel behind him, Grafft believes the hotel could be redeveloped sooner rather than later.

“I don’t see it being any more than five years,” Grafft said of his plans to convert the Art Deco building to upper-end apartments and a restaurant.

Last year, Grafft’s daughter Britten helped revitalize the project. The architecture student worked on interior and exterior surveys of the building. At the time, she believed work could start on the project sometime this year.

Britten’s now graduated, and she’s the project coordinator for Grafft Investments Real Estate Redevelopment. Other company interests have taken her and her father away from the project.

The most notable was Grafft’s purchase of the assets of the TecumsehPower Co. engine division, which he moved to Janesville.

“Moving 270 semi loads of parts to Janesville, hiring 50 people and trying to get that company up and running have kept us more than entertained,” Grafft said.

Much of the work the Graffts want to do at the hotel is awaiting approval from various commissions that must sign off on tax credits and improvements to the historic site.

In the meantime, Grafft is in the middle of a 30-day “order to correct” from the city on four code violations at the hotel and neighboring theater building.

“When you look at the building, you see an architectural jewel, an icon, that we need to preserve,” said Gale Price, the city’s manager of building and development services and the author of the code violation letter to Grafft. “We’ve got Jackson Square on one corner of that block, and we need the other corner to bolster what’s been done and promote additional development.”

Grafft refers to one of the alleged code violations as a “stroke of genius.”

Grafft was told that because the hotel is not zoned as a garage, he can’t park his gas-powered scooters inside.

His solution is to make a curb cut on West Milwaukee that will allow the front of the former theater to become a garage entrance. That will allow access to the rear of the building, which Grafft knocked down last year.

“That lets me accomplish two things,” he said. “I’ve solved the secured parking problem, and I get a place to park my scooter.”

Grafft said parking has been the single biggest challenge facing the project.

Plans call for two apartments on the second floor and five on each of the third, fourth, fifth and sixth floors.

For 22 apartments, Britten Grafft said the site needs a minimum of 22 parking spaces, plus more where they can be squeezed in.

Grafft said the redevelopment will costs millions of dollars.

“The restaurant would be a destination, and it would require significant dollars alone,” he said.

He’d be happy to develop the restaurant and its historic Janesville theme, he said, but not run it.

“It would be along the lines of what Mick (Gilbertson) did at The Armory or Chad and Anita (Karl) did at The Speakeasy.”

Whether downtown Janesville is ready to support high-end apartments remains to be seen.

Price said he thinks the building will need a minimum investment of $3.5 million. He bases that in part on the $4 million Sara Investment Real Estate spent to gut and renovate the former Helgesen Building.

“And that building’s 50 years younger and wasn’t dilapidated like the Monterey,” Price said. “It can be done. Any building can be redeveloped, but the question is what is the expectation of the developer from a standpoint of rate of return.

“I’d be concerned about entering the upper-end apartment or condo market right now.”

The Graffts think the market is there but only if downtown is safe.

“As young professionals, my brother and I would love to live downtown and be where the action is, but safety is a huge issue,” Britten Grafft said.

“For anything to work, we’ve got to protect these downtown areas at all costs,” her father said. “They have to be pedestrian friendly and safe to the point that people don’t even think about it.”

Grafft said the Monterey is a work in progress.

While the project might not be moving as quickly as some in the community would like, Grafft said he has the patience and financing to see it through to completion.

“I could have sold this building several times,” he said. “But what we would have had is a building with 80 single-unit residences, a flop house.

“That would have been the kiss of death for the downtown.”

Grafft said he’d be much farther along with the redevelopment if the fire department and its code inspector weren’t routinely sidetracking him.

And he bristles when city officials suggest the building is nearing the point of falling down.

“I’m offended when they say my leaky roof is any more of a problem than their leaky roof at the Tallman House,” he said. “Anything that’s coming down is heavy plaster that I’d have to remove anyway. It’s much easier to pick up off the floor.

“The structural analysis on this building says it’s solid, but it can’t sit forever.”

Last updated: 11:50 am Thursday, December 13, 2012

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