The city council and plan commission could review plans to convert the vacant Monterey Hotel into an apartment complex as soon as next month, Janesville’s economic development director says.
Gale Price said the city is evaluating a prospective development plan from Cardinal Capital Management, a Milwaukee-based developer hired by the building’s owners to move the project forward.
Cardinal has submitted a tax increment finance agreement request, which is also under review, Price said.
Plans could reach the city council and plan commission next month, but the timeline depends on how quickly city staff can work through the review processes and draft a final TIF agreement, Price said.
Tax increment financing is a tool for governments to attract private investment. It allows municipalities to acquire property, eliminate dilapidated buildings and make improvements such as sewer, water and streets and charge the cost to a TIF district.
The municipality then offers sites in the district to businesses for free or at great discounts to draw development. As the district’s property value rises because of the new investment, the increases in property taxes are used to repay only the municipality’s costs. When the costs are paid or the district’s limited life expires, the new property taxes are distributed among all taxing jurisdictions, such as school districts and the county.
The plan commission would need to approve a conditional-use permit for the planned apartment units on the building’s first floor, he said.
In 2019, the council approved an ordinance change allowing first-floor apartments in the city’s central business district as a conditional use. The former hotel is part of the central business district.
The city council would have to approve the TIF agreement.
Price said from what he has seen, the TIF request seems “reasonable.”
Among other things, the developer is asking for help to pay for asbestos abatement and lead removal, which are costs that would be difficult to recoup through rent, Price said.
City staff typically presents TIF agreements and conditional-use permit proposals for a given project to the council and plan commission around the same time. That could change if the city and developer chose to move one forward before the other is ready, Price said.
Price said he has not yet seen plans for parking, which has been a sore subject between building’s owner—the Grafft family—and the city. Family members have long said that parking issues stood in the way of redeveloping the building.
The 90-year-old art deco Monterey Hotel is owned by Certified Parts Corp., which is owned and operated by Riley Grafft, Jim Grafft and Britten Langfoss. Jim Grafft is Riley and Britten’s father.
Cardinal Capital likely would oversee construction and manage the units with the family maintaining majority ownership, Riley Grafft told The Gazette in January.
Price said the project could be “really cool” and something city officials long have anticipated.
A history of the hotel compiled by The Gazette shows the Grafft family has considered turning the hotel into apartments since at least 2009.
Plans in 2009 included building 22 apartments, but the Graffts said parking was an obstacle.
City officials, including Price, have advocated for more downtown residential units to bring more foot traffic to the area and meet the expectations of a younger generation that wants to live in urban, walkable areas.
In 2018, the hotel was at risk of demolition after city officials 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 that year.