It’s how multiple downtown stakeholders and city of Janesville officials described the prospect of the city paying $7.1 million up front to buy, clean and prepare several parcels on the riverfront in downtown Janesville that could become home to Blackhawk Community Credit Union’s proposed Reflections Plaza.
The city council in lockstep gave city staff its blessing to work up a proposal for an incentive package that could help Blackhawk’s plan for a $30 million, multi-use office project come to pass.
The Reflections Plaza could include a new headquarters, a GM employee legacy center, UW-Whitewater satellite offices and retail and restaurant space in a facility along South Water Street.
Staff could draw up a baseline package for the council to take to a closed session as early as April 22.
The question would be what kind of protections the council would ultimately want in an upfront cash proposal some council members say is uncharted territory for the city.
Some council members voiced concern whether site contamination along the riverfront could be a hidden tiger.
But none on the council thought the risks should dissuade the city from drawing up an offer.
“I’m not hearing any reason not to move forward,” council member Tom Wolfe said. “I’m hearing 23 million to 30 million reasons to move forward.”
Wolfe was talking about estimates from the city that the project would be a $30 million investment by Blackhawk, and, according to preliminary city estimates, could boost the assessed value of property that includes the former Bee Line Wheel Alignment and jail site to about $23 million.
Blackhawk originally intended to buy a chain of several privately owned parcels for the development, but last month the credit union asked the city if it would buy the former Rock County Jail site, the vacant Bee Line property and the adjacent Nowlan and Mouat law firm building, the city said.
Acquisitions of those properties would cost the city $4.25 million, the city estimates—a major portion of the $7.1 million upfront deal Blackhawk seems to favor. Under the proposal, the city would pay to clear the properties and clean up any contamination. The city would then sell Blackhawk the sites, along with the city-owned former Mercy Options site and a few other adjacent city parcels, for $1.
That’s different than the city’s initial offer—a 15-year, $6.1 million, pay-as-you-go TIF deal that would include $1.9 million in upfront costs, including an agreement the city would pay an estimated $258,000 to clean up contamination and reimburse part of the development’s property taxes for a set number of years.
The upfront property acquisition proposal would cost the city about $890,000 more in interest on city borrowing, according to city estimates. But the property would go back on the tax rolls the first full year Blackhawk owned it, City Clerk-Treasurer Dave Godek said.
Blackhawk Community Credit Union President and CEO Sherri Stumpf said it has become clear to her credit union and project planners that there are major complexities readying a historically industrial stretch of riverfront for commercial development.
“We are not developers, and this we know, now, is beyond our scope,” Stumpf told the council Monday.
She pointed out the riverfront area where the Reflections Plaza is proposed is designated as a “catalyst” site the city is focused on improving through its ARISE riverfront redevelopment strategy.
Stumpf said Blackhawk prefers the city buy and ready the parcels rather than offer a TIF deal because the city would be more “in a position” than her credit union to obtain state grants and other funding to pay for cleanup. She said site contamination is something the credit union is leery to ask its members to pay for.
Council member Jim Farrell said he wanted to see what kind of proposal the city could bring to negotiations, but he and council member Sue Conley said they’re concerned over “unknown” possible costs for site cleanup.
It could be weeks or months before the city completes a full environmental assessment of the parcels, officials said.
Much of the privately-owned property that would be part of Reflection Plaza deal are owned by Jeff Hazekamp, a former principal with Janesville architectural firm Angus-Young Associates.
Farrell said he thinks the property seller should be responsible for cleanup costs.
All council members Monday night said they wanted to be careful a development deal doesn’t expose taxpayers to risk.
Council member Rich Gruber said if city staff built in protections that were “equivalent” to those under typical TIF deals, “then I’m going be all in favor of it.”
Council President Doug Marklein said he believes an upfront incentive package isn’t all that unusual. He said it’s similar to development incentives municipalities including Janesville once offered in the past, during “pre-TIF” years.
“Before TIF (tax-increment financing), this is the way we did it. It’s the way the cities helped development pre-TIF. It’s probably the most traditional way to do this,” Marklein said.