Deals such as the one approved this week by the Janesville City Council to buy 47 acres for industrial development don’t happen often.
The last time the city orchestrated a similar deal was in 2012 to acquire a site on the city’s south side, later to become the home of SHINE Medical Technologies. That acquisition is looking smarter by the month, with SHINE announcing this week a New York firm is investing $150 million toward the construction of a molybdenum-99 manufacturing plant.
Patience is turning out to be a key element of Janesville’s recovery from the depths of the 2008 financial crisis. The city has steadily diversified its economy, and we have high hopes for the 47 acre site next to Grainger at Enterprise and Wuthering Hills drives.
The city has good reasons for buying the 47 acre site instead of waiting for Grainger to sell it to a private party.
For one, the site has been contributing next to nothing in taxes. The purchase price is $1.3 million, but because the land is considered farmland, it’s assessed at only $12,000. The city receives a measly $311 each year in tax payments on this property, according to Economic Development Director Gale Price. In other words, the property is an ant hill on the taxation mountain.
The city acquires properties like this one to accelerate development. The biggest benefit to a prospective developer will be financial. Assuming this deal finishes like previous ones, a developer will get the land for $1 and then use equity in the property to help finance site development.
While these purchases can be controversial, the deals negotiated by the city in recent years, including the 1 million-square-foot Dollar General distribution center on Innovation Drive, have proven fruitful.
But these economic successes come with side effects. Notably, just as Price has been putting together the 47 acre site deal, he’s been working to solve a different though related dilemma: a housing shortage. With Rock County unemployment near all-time lows, the city needs more rental and single-family housing for workers.
To the extent manufacturers encounter the same problem in other places, perhaps a lack of housing won’t deter them from coming to Janesville. But the city’s economic recovery could stall if prospective employers begin to conclude Janesville’s housing shortage is worse than other cities’ and would impede workers from moving to the area.
Expanding the city’s industrial site inventory is wise, but a lack of jobs is no longer the city’s biggest challenge. Our concern is the city might struggle to fill these industrial parks without enough homes for workers. In some ways, it’s a good problem to have but one likely to worsen without the city working aggressively to spur new housing developments.