A small, last-minute change to the city’s revised tax increment financing policy will likely give Janesville more flexibility to recruit multifamily housing developments.
One real estate developer is optimistic his multifamily housing development plans—which could bring 250 units to a bustling transportation corridor—will now qualify for city incentives after the council approved a modified policy Monday night.
The new policy allows the city to provide TIF incentives to multifamily housing proposals outside of downtown. The policy will expire in five years unless a future council extends it.
Hovde Properties President Mike Slavish said his company is considering a market-rate apartment complex near the southwest corner of Racine Street and Interstate 90/39. The project would sit on an 11.5-acre site nestled between Oak Park Place and Ryan Incorporated Central.
The property is in the town of La Prairie and would need to be annexed into the city for access to city water, sewer and other utility connections, he said.
The site would not have been eligible for financial incentives under the policy’s original draft. That’s because the draft included a requirement that any property receiving financial assistance would have needed to be within city limits for at least 20 years.
The council removed that rule before approving the policy change Monday.
Slavish’s proposal does not have a name and has not been officially proposed to the city. He hopes to submit an application within the next 30 days, he said.
The 20-year requirement also would have excluded a site near Highway 26 and Wright Road. That property has been within city limits for 16 or 17 years, Economic Development Director Gale Price said.
The property owner there has asked the city to modify the land use agreement. If that change is approved, the developer could then submit a development proposal. Preliminary plans call for a combination of multifamily and single-family housing and commercial development.
Price said the original rationale for the 20-year requirement was to prioritize sites in which the city already had invested. Such places would have utility connections and likely be surrounded by developed sites.
But having no such requirement gives the city more wiggle room.
Slavish said Hovde could “absolutely not” build the project off Racine Street without city assistance. Janesville’s rents aren’t high enough to cover a developer’s material and labor expenses, he said.
The company manages many properties in Dane County, where rents are higher and municipalities routinely provide incentives. That creates some financial security for developers that Janesville’s market currently does not provide.
Hovde does have experience in Janesville. The company manages the Woodsview Apartments—just across the street from where it wants to build its second property.
Slavish commended the council for dropping the 20-year requirement. Price said the new policy already was paying dividends less than a day after it was approved.
“I fielded several phone calls today (Tuesday) over potential projects. I think it’s going to help promote multifamily development,” Price said.
“It’s going to close the gap, and in the end our ultimate hope is this is only a short-term situation where rents eventually catch up with the cost of construction.”