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.