Janesville group plans 'new start' for former Kennedy Homes subdivision
“Sun … sunshine? Something positive, anyway,” Kaiser mused. “It’s a new start.”
Kaiser’s Janesville real estate redevelopment group, Kaiser Property Group, bought the defunct 90-acre housing development at auction Friday at Lima Town Hall for $400,000.
The property, which is off Highway 26 between Janesville and Milton, contains 163 improved and unimproved lots.
Also sold Friday at the auction were 160 acres of farmland adjacent to the former Kennedy Homes property. That land went for just more than $1 million, according to Badger State Auction and Real Estate, the group selling the properties.
The company listed the buyer as Brian Gunnink of Darien. A man at the auction who would only identify himself as a partner in the purchase declined comment.
Kaiser said his redevelopment group plans to start building residential properties again at the former Kennedy Homes, which was started in 2006 and once held hopes for 900 homes to be tightly clustered on about 400 acres.
New construction at the property ground to a halt in 2008, and only 11 houses were built before the development folded and Kennedy Homes sued its lenders for causing the company to become insolvent.
A Chicago financial institution in Chicago bought the property and was motivated to sell it, said sources connected to the sale.
Kaiser said his group aims to change covenants in the property’s development agreement. For one, the group would increase lot sizes from the 70-foot-wide, 115-foot-deep lots originally planned, which would mean lower-density development.
“We’re not going to do big boxes on little lots,” Kaiser said.
The group also will push for stricter construction rules on the property, he said, including mandatory brick façades and a possible requirement for basements.
“I do not support vinyl villages,” Kaiser said. “I look at this as it’s one of our main entrances into Janesville. I want it to be nice.”
Kaiser Property Group in 2009 bought a controlling interest in Stoney Ridge, a residential subdivision at Kennedy and Townline roads in Milton. The group also worked on deals to bring commercial tenants to the former Lear property in Janesville and the former Alcoa property in Beloit.
Kaiser indicated a housing boom anytime soon isn’t likely, and his group is in no hurry. New construction at the former Kennedy Homes will be based on demand, he said.
“I don’t believe in making markets. It’s what the market needs. Whatever the market drives is what we want to do,” he said.
He said the group would consider building a blend of rental properties, condos and single-family homes at the property.
Lots at Kennedy Homes went through three separate waves of bidding Friday before Kaiser entered a winning bid of $2,325 per lot for the entire property.
“They got a great buy,” said Bob Johnson of Badger State Auction.
About a year ago, Johnson auctioned off larger, 1½-acre developed lots in Milton for $27,000. And before the housing market soured, developable farmland had been selling for at least $12,000 per acre, he said.
Friday, the farmland linked to Kennedy Homes sold for $7,600 per acre, Johnson said.
“I expected that to bring a little more money,” Johnson said. “I was looking around the $8,000 to $8,500 mark.”
At least 40 people filtered in and out of Lima Town Hall on Friday, although some had come on to bid on lots from another failed Kennedy Homes development on Whitewater’s west side.
Milton realtor Fred Hookham, who was at the auction Friday, said he was excited the entire Kennedy Homes development sold. Hookham said he believes the sale marks a new beginning, even if lots are developed little by little.
“If someone is digging a basement out there, it’s a convincing statement that maybe we’re through the bottom of this thing,” Hookham said. “Every house that’s built is a little step closer to recovery.”