Janesville City Council to spend more on business incubator

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Tuesday, July 26, 2011
— It’s still a good deal, just not as good a deal as it was before.

That was the feeling most Janesville City Council members had when they approved an additional $562,000 to help build a business incubator on the city’s south side.

The council agreed in September to contribute 25 percent to the project, which included 4.17 acres at Beloit Avenue and Venture Drive valued at $125,000. Another $275,000 would have come from TIF 22 and a federal grant would fund the remainder for a total of $1.6 million.

But then construction costs increased. The city eliminated 2,000 square feet from the project for a savings of about $100,000, leaving the total still around $2.3 million. The soil at the site contains more topsoil and silt than originally expected, and that also will add to expenses.

In addition, the federal Economic Development Administration will not increase its contribution.

So on Monday the council voted unanimously to increase its match from $400,000 to $962,000, which is about 44 percent of the project.

Councilman Russ Steeber was absent.

Most funding programs require a 50-percent match, and this program is unusual because it comes from stimulus money. If the city were to reapply for a loan, the local share would be at 50 percent and would cost about $1.1 million.

Also, the grant could only be used for new-site development rather than to outfit existing facilities.

Additional money for the project will come from the city’s TIF 22. While the TIF has a negative balance, it should be positive by 2017—the 19th year of its 23-year life. The district also should have a positive cash balance of $3.6 million in 2021, the year it must be closed, said Vic Grassman, the city’s economic development director.

The federal government requires the incubator create 45 jobs in its first nine years, but officials told the city it typically does not penalize if a city makes a good-faith effort, Grassman said.

Grassman recently discovered that other Wisconsin incubators are leasing space to excising companies to test new products, and those jobs would count toward the 45, he said.

For example, a Portage incubator filled quickly.

“It’s really unfortunate that this project isn’t as good as it first looked because of the additional funding required, but it is still an excellent deal for the city, still great for economic development,” Councilman Tom McDonald said. “I’m glad to see it still go forward.”

George Brunner was the only councilmember to express hesitation.

“It’s not that I still don’t believe in it but, in a sense, this is kind of like the ‘Field of Dreams,’” he said. “‘Build it and they shall come.’”

“I still support the concept,” he said. “It’s just that there’s a certain amount of speculation here. I’m hoping, I’m trying to be positive and think we’re going to be successful. But sometimes the dynamics of a project change and you start wondering, ‘Is it really worthwhile?’

“But we have to do something ... to promote Janesville, jobs and job development,” he said.

Construction will begin in spring 2012.

Other business

The Janesville City Council on Monday:

-- Voted not to remove stoplights at Academy and Milwaukee Streets. The majority of council members agreed with three residents who said the intersection would be too dangerous for pedestrians. Traffic comes up the hill too fast and vehicles are obscured by a crest and parked cars, they said. Some parking would have been removed to increase visibility, and one businessman said parking is already too hard to come by.

The move would have saved $2,500. The equipment is aging, though, and staff said it could cost more to maintain in the future.

Yuri Rashkin and Sam Liebert voted to remove the stoplight.

Russ Steeber was absent.

-- Approved a code of conduct for council members after two previous meetings filled with debate.

The code establishes a reprimand and censure procedure and allows council members to remove offenders from commissions and committees. It regulates the use of electronic devices during meetings. It says council members must be clear when they are speaking in public about opinions being their own rather than those of the council.

Rashkin and Liebert voted against the code.

Rashkin said the code is “a good thing,” but could be accomplished in one page rather than six. He was especially worried about the sanctions.

“There is no doubt in my mind that a council member (in the future) is going to use this document to have an argument with another council member, and it will provide problems,” he said.

Said Liebert: “Just for the record, I don’t have anything against ethics.” But he said it was “pretty ridiculous” that the council spent so much time on a document explaining how to be a decent person when the city has so many other pressing needs. “This has been a waste of our time,” he said.

“I’m sure it’s going to pass, and I look forward to always (saying that I am) speaking on my behalf and not the council’s every time I say something.”

-- Delayed discussion and a vote on an ordinance that would allow people to bring concealed weapons into city-owned buildings.

Last updated: 5:49 pm Thursday, December 13, 2012

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