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Government
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City council approves TIF deal for Monterey Hotel development

JANESVILLE

The Monterey Hotel, after decades of citywide anticipation, will once again become a fully functional member of Janesville’s downtown landscape as soon as March 2022.

The 90-year-old, seven-story art deco building will transform from its longstanding identity as the Monterey Hotel to the Monterey Apartments, with help from a $1.7 million deal from the city.

The city council Monday unanimously approved a tax-increment finance deal to aid developers Cardinal Capital Management of West Allis and longtime owner Jim Grafft to redevelop the decrepit building into 51 apartment units with first-floor commercial space.

Gale Price, economic development director, said the TIF agreement allows developers to afford hefty costs unique to redeveloping such a dilapidated property while presenting little to no risk financially to the city.

The agreement uses a pay-as-you-go method, meaning the developers will receive incentives gradually over 19 years. There are no upfront costs to the city, and the city will not need to take out new debt for the deal, Price said.

Incentives paid over time come from increased property tax value created by the project, funds the city does not currently depend on to operate.

Pay-as-you-go deals are attractive because there is no risk or debt for the city and it encourages developers to finish and maintain the project. City incentives cannot be paid out until the project is completed, Price said.

Price pointed out the redevelopment is pricier than many other construction projects, with $650,000 of the $9.4 million project budgeted for environmental costs such as asbestos abatement.

Environmental costs are difficult to recoup, Price said.

Parking had been a long-discussed barrier across which Grafft and city officials have not always seen eye to eye.

Monterey Apartments will have 39 on-site parking spaces, less than one space per apartment.

Council members asked if limited parking would hinder potential renters from signing leases.

Current trends show people are less dependent on vehicles than they were in generations prior, and on-site parking is not as important to current apartment seekers.

Lots surrounding the area will be available to those who do not have a spot on the property, Price said, and developers have been talking to surrounding property owners about parking options.

The deal dictates the project be completed by March 2022, which a representative from Cardinal Capital said is a realistic time frame.

The apartment complex will include studio, one-bedroom and two-bedroom apartments with rents ranging from $750 to $1,500 per month, a representative from Cardinal Capital said.

Commercial space will be included on the first floor and visible along Milwaukee Street. The basement will include a fitness facility.

The city’s plan commission will have to approve a conditional-use permit to allow for first-floor apartments in the space not dedicated for commercial use, Price said.

Council members lauded the project, saying it is a welcome improvement to the downtown that hopefully will catalyze other development along the West Milwaukee Street corridor.

Council member Doug Marklein said the project has a three-fold effect on the community: It helps the downtown, offers more housing for the community and saves a historic building.

A history of the hotel compiled by The Gazette shows the Grafft family has considered turning the hotel into apartments since at least 2009.

The hotel in 2018 was at risk of being demolished after the city issued a raze-or-repair order because of building code violations.

The order has since been lifted, and the hotel is in compliance with an agreement made with the city in 2018.

The building opened as a hotel in 1930. Grafft bought the property in 1996 after the building already had been deteriorating for some years.


Education
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Milton School Board approves Apple devices swap

JANESVILLE

Students and staff in the Milton School District will receive new Apple devices two years into the district’s four-year contract with the company.

The Milton School Board voted 4-3 on Monday to allow the district to sell its current fleet of Apple products and enter a new four-year lease-to-own agreement with Apple.

Board members Mike Hoffman, Brian Kvapil and Rick Mullen opposed the sale. This will be the third time since 2016 that the district is reselling its devices before the end of a contract.

The district will replace 24 iMac computers in the high school’s digital media classroom, 2,700 iPads for 4K through middle school students and staff, as well as 1,847 MacBooks for high school students and staff.

Superintendent Rich Dahman called the opportunity a “win-win” and said the district doesn’t intend to replace devices every two years.

“There’s educational advantages for us to move forward, there are financial advantages for us to move forward in having brand-new devices for all of our students and staff, 130 additional devices and being able to lower our annual lease cost,” Dahman said.

Some educational reasons for the switch include the ability to add more capable devices before the lease ends, Apple’s new M1 chip and larger screen size for the iPads, better battery life and graphics in MacBooks, and increased processing power in the iMacs.

Monday’s decision also adds 100 iPads and 30 MacBooks to the district’s collection, “needed to support virtual learners, provide for replacements, and growth in needs,” according to board documents.

Current devices will be sold to Diamond Assets, a company co-owned by former board member Diamond McKenna, who resigned in August.

The company will store the devices before implementation and set them up for district use to ensure they are ready when the transition takes place. Diamond Assets also will help with early training and troubleshooting.

A final price has not been decided for the sale, but Diamond Assets’ minimum guaranteed value for the district devices was about $1.22 million, said Ryan Curless, district director of technology and innovation. The maximum value is about $1.5 million if every device is in “A” condition.

That number is close to what the district currently owes Apple. Proceeds from the sale will be used to pay off the district’s current lease with Apple, which will cost about $1.22 million, as well as to buy new cases and peripheral equipment.

The 2018 lease calls for an annual payment of $612,294.63, including interest, and would have cost the district $2.45 million over the life of the contract. As a condition of the buyout, the district will not have to pay the $30,358.31 owed in interest for the final two years.

The new lease with Apple will cost the district $590,511.50 each year for four years, a total of $2.36 million. The lease comes with 0% interest, which was a big reason the district decided to explore the device swap, Dahman said.

Former board member Bob Cullen and two other residents wrote to the board in support of the product swap. They said the move can save the district money and will help keep Milton students competitive in the education and job markets.

Board members’ opinions differed on the topic. Most focused on whether the move was a necessity and how much the devices’ value would depreciate if the board didn’t accept the current offer.

Mullen said he didn’t support the motion because he thinks the current devices are fine and the district can still sell them after the contract ends.

Kvapil agreed. He said exploring the idea when COVID-19 is causing such a financial strain would make the district “bad stewards” for the community.

“This is probably the most fiscally irresponsible thing I’ve seen if we move forward,” Kvapil said, adding that he wished the district had taken a higher bid.

Kvapil spoke at length before board President Joe Martin stopped him and told Kvapil his turn to speak was over because he was off topic. Martin later apologized for his sharp tone, saying he wants to ensure conversations remain respectful and relevant.

The two had a heated exchange before Business Director Carey Bradley said the district is making the decision based on the information it has right now.

Board member Dave Holterman supported the new devices, saying it makes sense to begin a new contract that saves the district money each year over the current contract. Board member Jennifer Johns agreed.

Hoffman said staff and students have endured a “tremendous” amount of stress this year, and he did not think it was the right time for new devices.

Martin voted in favor of the new devices.

"To me, it’s about lowering our cost, increasing the value to our students and staff and not do it at their expense,” Martin said.

Diamond Assets

The district chose to sell the devices to Diamond Assets after considering bids from five companies.

The bids ranged from $993,994 to $1.51 million. Diamond Assets’ was the second-lowest offer at $1.22 million.

Curless said while Diamond Assets’ dollar amount was lower than others, the company provided the best overall bid.

In a device buyback, companies often grade devices using a letter system. The process gets complicated, Curless said, because what one company considers to be an “A” device might be a “C” device to another.

The percentage of value that is docked by each lower letter grade also varies among companies, which is often why offers can be so different from company to company, Curless said.

”There’s a very wide variance in that grading piece that ultimately affects the payout,” he said.

Bids were weighted on six criteria on a scale of 1-10, 10 being a perfect score. Scores were decided after deliberation among district officials.

  • Price and payment: 30%.
  • Prior experience: 20%.
  • Management capability: 20%.
  • Proximity: 15%.
  • Data sanitation: 10%.
  • Environmental objectives: 5%.

Diamond Assets scored a perfect 10 on four of the six criteria—prior experience, management capability, proximity and environmental objectives.

“From my point of view, Diamond Assets had a very strong proposal, both in the way they chose to represent themselves in the proposal and also in their response to all of the RFP criteria,” Curless said.

“They responded to every facet of the RFP and went above and beyond to provide additional information or resources that were not requested.”

Diamond Assets was the only company to get a top score in multiple categories and had the highest overall score with a 9. The next-highest company with an overall score of 8.4—Second Life Mac of Skokie, Illinois—scored one 10 in the weighted categories.

Timeline for sale

Logistics will be worked out in coming weeks, Curless said.

A tentative timeline for the district to trade current devices for the new counterparts is late January, but that could change based on shipping of the new devices.

“There are a lot of pieces that need to be worked out yet,” Curless said. “There’s more to do to make sure it’s done well, done right and done in a manner befitting to the staff, the students and the community.”


Crime
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UPDATE: New complaint says Janesville double homicide suspect beat woman with bat

JANESVILLE

The man charged with murdering two women in Janesville in February also faces new charges accusing him of beating another woman with a baseball bat over a dispute about money last year.

About 10 months after the two women were found shot and barely alive along Midvale Drive, Marcus T. Randle El made his initial Rock County Court appearance Monday, but the matter had to be postponed until Thursday.

Randle El, a former Wisconsin Badgers football player, briefly appeared over video on the two first-degree intentional homicide charges he faces in the Feb. 10 slayings of Seairaha J. Winchester and Brittany N. McAdory.

Because he had not had a chance to meet with his attorney, the initial appearance was postponed until 3 p.m. Thursday.

Randle El, 34, of Homewood, Illinois, also was charged last week in Rock County Court with aggravated battery intending great bodily harm and loan sharking, both with use of a dangerous weapon.

Janesville police on Sept. 28, 2019, spoke with a Janesville woman who had been beaten with a baseball bat, according to the new criminal complaint filed Dec. 8.

She said someone she knew as “L” had loaned her $185 for rent and now wanted $250 after adding interest, the complaint states.

After the two talked, “L” grabbed a black metal Louisville Slugger bat and struck her, according to the complaint. Injuries listed in the complaint include a “break in her forearm,” a cut on her shin that required stitches and bruises and swelling to her feet and knee.

People familiar with the beating were watching news about the killings on TV when one of them said, “That’s the guy that beat the girl with a baseball bat,” according to the complaint. They passed the information on to Janesville police, who confirmed the identity with the woman.

On Monday, inmates had to take turns sharing a device to make their virtual appearances from the jail, and at times they had their masks off or down under their noses. This comes as the jail is dealing with a COVID-19 outbreak that has infected dozens of inmates, according to numbers last updated Friday.

Randle El had been serving a prison sentence in Illinois, but he was recently brought to Rock County to face charges here. Other charges include operating a vehicle without consent and possessing a firearm after being convicted of a felony.

This story was updated at 4:20 p.m. Monday with details from new charges against Marcus Randle El.


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