TAX-INCREMENTAL FINANCING EYED TO FACILITATE DEVELOPMENT
RACINE – The city is helping a Madison developer finance what should become one of Downtown’s largest and most important developments.
State & Main, named for the intersection where it will be built, will contain 17,000 square feet of ground-floor retail space. It will have 84 apartments on the first, second and third floors and 30 condominium units on the fourth floor.
The condos will be marketed especially toward active baby boomers ages 55 to 65 who seek an urban setting. That group, sometimes called “zoomers,” has helped fuel urban renewal on the coasts.
State & Main is now on track for a late-February ground-breaking. That goal is being advanced this week as the city moves to create a tax incremental finance district, or TIF, at the northeast corner there. This TIF, however, will be financed by the developer, Gorman & Co. of Madison. Essentially, explained City Development Director Brian O’Connell, the city will create the TIF. It will then turn over the additional property taxes created by the TIF to Gorman to help that company finance the project.
By using that vehicle, the city will add $1.8 million to the total $18.6 million Gorman estimates it will need. “It keeps debt off the city books, and it makes the developer more responsible for the increment,” O’Connell said. “It’s a good way to shift risk from the city to the developer.” He said that, as far as he knew, State and Main will be the first developer-financed TIF in Racine’s history. Gorman representative Chris Laurent said the projected costs were greater than what the company could afford to operate and sell the units for.
Besides that help, State and Main is also being financed partly by $7.5 million in state-allocated tax credits designed to create affordable senior housing.
State and Main would be the first new-construction project in Racine for Gorman but its third Downtown area project. Gorman also did two conversions here, Belle Harbor Loft Apartments, and the Mitchell Wagon Factory Lofts.
The northeast corner of State and Main streets is considered the next critical site in Downtown’s continuing redevelopment.
Johnson Redevelopment Corp., the Johnson family companies’ retail arm, is a partner in the project. Johnson Redevelopment owns the land and will also own and manage the retail portion of State and Main, Laurent explained.
At a public hearing before the Racine Plan Commission Wednesday, Laurent said, “I think Johnson Redevelopment feels they have the potential to attract some national retailers.”
Mayor Gary Becker added, “Their goal is not just to fill (the retail space); it’s to fill it with the right stuff.” The retail plan is to situate a restaurant in the corner space, Laurent said. In the past he has said Gorman also has some hope for a small grocery store.
Construction should take about 12 months, Laurent said, but the first residential spaces could be available by the end of 2006.
The plan commission approved a TIF of $200,000. That includes about $170,000 for possible renovations to the State-Main intersection. Gorman would like to remove the dedicated right-turn lane from Gaslight Drive onto Main Street in order to add street parking on Gaslight. That would help provide parking near the retail spaces of State and Main.