Condos filling at Edgerton's Fulton Square development
Even so, a local Realtor and the property's developer say real estate action at the mixed-use development is starting to gain steam.
Eight of 26 condominium units have sold at the development at the corner of Fulton and Main streets in downtown Edgerton—all within the last eight months—as some buyers rode first-time homebuyer tax credits and others took advantage of sharp price cuts.
Stakeholders at Fulton Square this week said a deal is being finalized that could bring another local business into about 1,500 square feet of the ground-level portion of the development, which is geared for commercial use.
The only business in Fulton Square is Petry Chiropractic & Wellness, which relocated there after it bought 3,200 square feet of space.
Prior to April 2010, all residential units at the development stood empty.
In the last year, Keller Development has changed Realtors and slashed condominium prices as much as 30 percent in an attempt to spur sales, developer Tom Keller said.
Prices for base residential units at Fulton Square have been reduced from $100,000 to $69,000, Keller said. The price lowering has been a bitter pill for stakeholders, but it's helped move units at a time when sales for condos regionally have been tepid at best, Keller said.
"It's market reality," he said. "As a developer, we're not thrilled about it, but the market is what it is."
Kim Schuetz of Bunbury and Associates, the Realtor in charge of marketing properties at Fulton Square, said condo sales there in the last six months have been "far above" trends in the local housing market.
She said the company has sold an average of one condo per month at Fulton Square since April 2010, although sales slowed last fall after a first-time homebuyer tax credit program ended.
Schuetz said price reductions helped, but she believes weekly open houses at the development and expanded financing options also aided sales.
By the end of 2011, Schuetz said, she hopes to have sold 20 of the 26 condos at Fulton Square. She said that would increase occupancy enough to allow a homeowner's association at the development.
"We've got some ground to cover," she acknowledged.
There's also much ground to cover when it comes to filling more than 11,000 square feet of available commercial space at Fulton Square.
Officials haven't released details, but Keller said stakeholders recently accepted an offer on 1,500 square feet of commercial space. He said a deal could be finalized within three weeks that would add an "office-type" business at Fulton Square.
Schuetz said work to section off the space at Fulton Square is under way and that a local company is interested in locating there, but she declined to comment further.
It's potentially good news for a property that has underperformed in terms of tax revenue since its completion in 2009.
City records show that Fulton Square generated a lackluster $75,953 in taxes payable in 2010. That improved to $90,286 in taxes generated last year, but that's still less than the $108,453 in annual taxes the city and developers originally thought the property would bring in.
"We expected the taxes to be higher, although given market conditions, we are not surprised that it has not yet met the expectations," City Administrator Ramona Flanigan said in an e-mail.
The city promised nearly $1.2 million for the development through tax incremental financing. As the project generates taxes, the city returns the taxes to the developer to pay back investors.
The investors, not the city, bear the risk if the project fails to generate enough tax revenue, Flanigan has said.
Keller said he'd like to lure a commercial buyer who wouldd use at least 4,000 square feet of space at Fulton Square. He indicated that would boost the tax value of the development while making it easier for smaller businesses to fill in remaining space.