The city of Janesville is laying the groundwork for a potential $4.5 million industrial land expansion along its south-side business corridor.
If a deal comes to full fruition, the city would secure 129 acres of farmland off County G that the city’s top economic development official said is ready to develop for future industrial use. The site is just south of the Dollar General distribution facility.
The possibility for the acquisition came after the Janesville City Council’s Monday meeting, where the council gave its blessing to City Manager Mark Freitag hammering out an option to buy the land for the purpose of beefing up the city’s holdings of developmental property.
Under the structure of the deal, the city would pay the owner, the Art T. Donaldson family trust, $50,000 in annual fees over a three-year period on an option to buy the land.
That arrangement would guarantee that the city would, for three years, retain the option to buy portions of the 129 acres at a rate of $35,000 an acre.
“It allows us to manage risk because we can delay when we take title until it’s closer to when we may have a project ready to go,” City Economic Development Manager Gale Price said of the arrangement.
A deal with the Donaldson trust has been in the works for several months, and the city council debated it in a closed session earlier this month, Price said.
The council’s decision comes as the city’s inventory of industrial land has dwindled to nearly none, yet the city continues to see a high volume of interest in industrial development.
“As we’ve consumed land for our projects, we’re in a position where we’re in need for additional land,” Price said this week. “When we think about our relationships with developer and site selectors, we have to have (shovel-ready) property ready to go in order to get real looks for these development entities. If we don’t have available land, those site selectors will fly right over us.”
As the city deals with this land shortage, the private owner of the 250-acre former General Motors property continues to work with the state of Wisconsin on a cleanup of the vacant, post-industrial land. Local brokers for the property earlier this year said they have fielded serious inquiries for some portions of the GM site, but so far no prospects for that parcel’s redevelopment have come to the public forefront.
Price said the city turned to land near the Dollar General warehouse because it is adjacent to other chunks of farmland the city has purchased from the Donaldson trust since the 1990s. Those parcels have made for readily available “shovel-ready” development parcels in the past.
In addition to being next to the 1-million-square-foot Dollar General warehouse, the parcel is also adjacent to the SHINE Technologies campus. Both of those properties have city utility infrastructure running to them that the 129 acres might link into.
If the city doesn’t buy the full 129 acres within three years, Price said, it would not recover the $150,000 in option fees. If the city does buy all the land, the option fees would be applied to the purchase.
One regional developer, Zilber Property Group, recently went on a buying spree in Janesville, buying up hundreds of thousands of square feet of warehousing space along the city’s south and east sides near the Highway 11 and Interstate 90/39 corridor.
That was one sign that real estate action could be poised to pick up in Janesville as the yearslong Interstate 90/39 lane expansion through Rock County finally wraps up this fall.
Price didn’t give any hints about new potential development interest, but he said he sees little risk that the city would not ultimately buy the 129 acres on the south side.
“We continue to have a lot of interest in the community,” Price said. “I’m not worried about this land being absorbed. There is still a lot of demand as we’re getting a lot of interest still from site selectors.”