03 TIF Agreement Res 2007-403
Economic Development Memorandum ~
Oate:May23,2007
TO: Steven E. SheITfer, City Manager
FROM:
Doug Venable, Director of Economic Development
rz/
SUBJECT: Action on a Resolution Approving a TIF Development Agreement with the
Forward Foundation, Inc. for the Redevelopment of 14 and 18 S. Jackson St
in TIF District No. 24 and Authorizing the City Manager to Purchase the Rear
One Half of the Properties at 14 and 18 S. Jackson St. (File Resolution
No. 2007-403)
I. Summary
The Forward Foundation has requested TIF assistance to redevelop its properties at
14 and 185, Jackson 51 in TIF No. 24. The City Administration has negotiated a TIF
Development Agreement with the Forward Foundation. If approved, the Forward
Foundation would renovate the two existing buildings to increase the property value to
$300,000 and guarantee an annual property tax payment ranging from $5,196 to $5,477
overthe life of the TiF agreement. The City would reimburse the Forward Foundation for
$37,500 in development costs, purchase the rear one-half of the Forward Foundation
propertiesfor$18,000, and construct a public parking lot estimated at $55.000. The
property tax guarantees will allow the City to fully recover its TIF costs within 12 years.
On this Agenda, the Council will also consider a TIF Development Agreement with
MGD FUND III, LLC for the development of a new 8,000 SF, 2-story office building on the
City-owned property located at the corner of Dodge and S. Jackson 51. This $900,000
project will be joined to the Forward Foundation buiidings so that both projects will be able
to share the elevator and new stairs for access to the second floors.
The Plan Commission reviewed the proposed purchase of the rear one-half of the
Forward Foundation properties at its May 21, 2007 meeting and found such purchase to
be consistent with City plans, but did not review theflnanciai aspects of the transaction,
The City Administration recommends that the Council adopt Resolution No. 2007-
403, approving the TIF Development Agreement with the Forward Foundation and
authorizing the City Managerto purchase the rear one-half of the properties at 14 and 18
5. Jackson St.for$18,000.
II. Background
In 2005, the Forward Foundation. Inc. purchased the former Dermagraphics building
at 14 S. Jackson SI. and the former Red Wing Shoe store at 18 S, Jackson SI. The
buildings were either vacant or poorly maintained, and the Foundation wanted to stabilize
the neighborhood and undertake a redevelopment project in the downtown.
Economic IJevelopmBnt D~p.rtment .18 N Jackson 81. . Janesville. WI .53547-5005 .608-755-3181
Forward Foundation Project
May 23. 2007
Page 2
The Red Wing Shoes building at 18 S. Jackson SI. is a 2-story structure with
approximately 1,450 SF per floor. This structure is not considered historic and has a 2006
equalized property value of $ 85,300. The Dermagraphics building at 14 S. Jackson SI. is
a 2-story structure with approximately 2,030 SF per floor. The building also has a 1,575
SF one-story addition on the rear of the property which isin poor condition. The building is
listed as a contributing structure to the W. Milwaukee SI. Historic District. The property
has a 2006 equalized value of $83,600.
These buildings are adjacent to a vacant City-owned lot al the corner of Dodge and
S. Jackson St The Forward Foundation has joined efforts with MGD FUND III, LLC
("MGD") to undertake a redevelopment project involving both the vacant City-owned corner
lot and the two existing buildings owned by the Forward Foundation .
III. TIF Development Agreement
The City Administration has negotiated a TiF Development Agreement with the
Forward Foundation for the renovation of its two existing buildings. Under the terms of the
proposed Agreement, Forward Foundation will demolish the rear one-half of the
Dermagraphics Building, complete a $300,000 renovation of both existing buildings, and
guarantee to annually pay to the City properly taxes ranging from $5,1 96 to $5,477 over
the life of the TIF agreement. The City will purchase the rear one-half of the Forward
Foundation properties for $18,000 and reimburse the Forward Foundation for up to
$37,500 in development costs. The Agreement also provides that the City will construct a
new 28-stall parking lot at an estimated cost of 555,000. The funding for the parking lot
construction will come from the positive fund balance in TiF No.9.
Under the terms of the Agreement. the planned demolition of the rear portion of the
Dermagraphics Building and the planned renovation of the historic facades must be
approved by the Janesville Historic Commission. In addition, the Forward Foundation
agrees that it will remain liable for and will pay real estate property taxes to the City. The
guaranteed property tax payments will allow the City to recover ils TIF costs within 12
years.
This redevelopment project is also dependent upon the constructi onofanew,2-story
office building by MDG FUND III, lLC on land at 22 S, Jackson SI. The new office building
will be constructed to allow the Forward Foundation properties to share an elevator and
new stairway so that the Forward Foundation properlieswill be handicapped accessible,
IV. Recommendation
Downtown revitalization projects are difficult to complete due to the need to deal with
existing buildings without adequate access to second floors and todealwilhmultiple
property owners to assembie a development site. Development is further complicated by
the need for off-street parking to serve new development.
EconomicDevelopmenIDepartment.18N.JacksonSt..Janesville,WI.53547_5005.608.755_3181
Forward Foundation Project
May 23, 2007
Page 3
The proposed TIF Agreement with Forward Foundation provides a reasonable
amount of public investment to allow the proposed redevelopment project to proceed.
The TIF Agreement helps pay for the extraordinary costs associated with historic building
renovationandsecondflooraccessandprovidesforthecreationofanew28-stallpublic
parking 101 that will sel"lle multiple businesses in the northwest quadrant of the downtown.
The Administration recommends that the City Council adopt Resolution 2007 - 403,
approving the TIF Development Agreement with the Forward Foundation and authorizing
the City Manager to purchase the rear (western) one-half of the Forward Foundation
properties at 14 and 18 S. Jackson SI. for $18,000 in TIFfunds.
1h~
Douglas V n ble
Attachments: Map of Development Site
Resolution 2007-403
Summary of TIF Development Agreement
Sketch of Planned Buiiding
EwoomicDevelapmentDepartment.18N.JacksonSt.Janesville,WI'53547-5005.606-755-3151
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Jackson Square Project Location
L._,.--J City-ONned Property
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Forward Foundation Property
FOl\Nard Larld Purchase by City
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May,20D7
Resolution No. 2001- 403
A Resolution Approving a TIF Development Agreement with the Forward
Foundation for the Redevelopment of Properties at 14 and 18 S. Jackson St. and
Authorizing the City Manager to Purchase a Parcel of Land from Forward
Foundation for a Purchase price of $18,000
WHEREAS, the Common Council have authorized the use of Tax Increment Financing ("TIF")
Districts and TIF Development agreements when the Council adopted amended Council Policy
Statement No. 61 (Economic Development Policy) on the 13th day of November, 2006; and,
WHEREAS, the Common Council of the City of Janesville lawfully created Tax Increment
Finance [TIF) District No. 24 on the 24th day of July 2002, which TIF District was duly reviewed
and approved by all necessary boards and commissions; and,
WHEREAS. Forward Foundation, Inc., is a Wisconsin non-stock, non-profit corporation in goad
standing, conducting its principal business at 51 South Jackson Street, Janesville, Wisconsin
53545, with John Beckford Registered Agent, desires to renovate certain reai properties that it
oWllslocated at 14 and 18 South Jackson Street in the City of Janesville, County of Rock, Slate
of Wisconsin 53545,thereby revitalizing and redeveloping the Ci ty'sdowntoWll,helping
eliminate blight, increasing the value of said real and personal pro perty,addingtotlleCity'stax
base, and otherwise benefiting thehealth,welfare, peace and good ord er of the CITY, its
downtown and the overall community; and,
WHEREAS, in order to facilitate the planned renovation project, Forward Foundation, Inc. and
the CITY have negotiated a TIF Development Agreement ("Agreement") that is consistent with
the goalsofTIF No. 24; and,
WHEREAS, said Agreement, whicl1 is attached hereto and incorporated herein by reference as
iffuliysetforthverbatim, sets forth the lerms and conditions of the p lanned renovation project
and provides for Forward Foundation's full repayment of the City's TIF developmentcoslsina
manner and within a time allowed by Wisconsin law; and
WHEREAS, under the terms of the Agreement, the CITY shall acquire in fee simple the western
one-halfoftheproperueslocatedat14and 18 South Jackson Street from Forward Foundation,
Inc. for a purchase price of Eighteen Thousand and 00/100($18,000 .00); and
WHEREAS, the Janesville Plan Commission reviewed the proposed purcl1ase, acquisition and
sale ofproperues related to the planned renovation project and foun d such purchase by the
CITY and sale to be consistent with CITY plans, but did not comment on tile financial aspects of
any specific transaction; and
WHEREAS, the Common Council of the City of Janesville find that both the approval of said
Agreement and the City's purchase acquisition of the western one-half of 1I1e two properties
located at 14 and 18 South Jackson Street are both in the best interest of and benefit to the
City,itsgoodorder, its citizens, and the overall community; and
WHEREAS, various Wisconsin's laws including, but not limited to, Wis, Stals. !Is 62.11 (5),
62.22(1),66,0101. and 66.1105 jointly and severally empower the Common Council and the
City to enter into this purchase and related Agreement.
Resolution No, 2007-403
Page 2
NOW, THEREFORE, BE IT RESOLVED, by the Common Council of the City of Janesville that:
1.
Each of the above recilals and findings is reiterated and incorpora ted herein by
reference as if fully setforlh verbalim; and
The attached Agreement by and between the City and Forward Foundation, Inc
hereby approved; the City Administration may enter into said Agreement on
of the City; and
The City's purchase of the western one-half of the two parcels of real pr operty
locatedat14and 18 South Jackson Street from Forward Foundation, Inc, is
authorized and approved in accord with the tennsand conditions setforlh said
Agreement; the City Administration may effectuate said acquisition purchase(s)
behalf of the City
2
;,
behalf
3.
00
BE IT FURTHER RESOLVED, that the City Manager, on behalf of the City of Janesville,
is hereby authorizedtonegotiate,drafl,modify,review, enter into andamendlhe
Agreement and all other related documents, papers and agreements; to take whatever
other actions: and to make whatever other changes, modifications and amendments to
the purchase{s) authorized herein that the City Manager may, from time to time, deem
necessal)' andlor desirable to effectuate the intent of this Resoluti on,
ADOPTED:
I Motion by:
iSecondby:
, Councjlmember
Brunner
DeGarmo
Loasching
Stoober
Truman
Wellnit:
Williams
I Aye Nay Pass JAbsent
APPROVED:
Steven E. Sheiffer, City Manager
ATTEST:
--
Jean Ann Wulf, City Clerk-Treasurer
APPROVED AS TO FORM:
&/#:/' ~//
CityArtorney , ,
Proposed by: City Manager
Prepared by: Economic Development Director and
CilyAttomey
Summary of TIF Development Agreement
Byand Between
City of Janesville and the Forward Foundation
I. Parties
A CityofJanesville
B. ForwardFoundation
II. DescrlptronofProperty
Ill. Purpose of Agreement
IV. The Agreement
A The City shall:
1) Prepare a survey of the properly after land purchase and sale. Cost to be shared
50150
2) Upon financial review, purchase western Yz of 14 and 18 S. Jackson SI. for $18,000.
3) Construct new public parking lot on western Yzof14and 18 S. Jackson St.
4) Reimburse Forward Foundation for $37,500 in development costs.
B. Forward Foundation shall:
1) Reimburse City of 50% of cost of survey.
2) Provide financial information about project for City to review and a pprove.
3) Obtain State Historic Society approval to demolish, and demolish the rear Yz of the
building at 145. Jackson SI.
4) Sell the rear y, of 14 and 18 S. Jackson SL to the City for 518,000.
5) Obtain approval of site plan and building elevations from City Site Plan Review
Coordinator and Janesville Historic Commission.
6) Complete renovation of 14 and 18 S. Jackson SI. with an estimated value of 5300,000
by December31. 2007
7) Guarantee to annually pay to the City a property tax payment ranging from $5,350 in
2008 (payable in 2009) to $5,935 in 2018 (payable in 2019),
C. As long as City's TIF costs have not been repaid:
1) Forward Foundation cannot allow property to become tax exempt.
2) Forward Foundation cannot sell the property without the City's approval a ndwithout
the buyer accepting the TIFguarantees,
D. Forward Foundation contingenGiesto be satisfied or waived by June 30,2007
1) Receipt of plan approvals and permits.
2) Project financing with acceptable terms,
3) Binding leases for the renovated building.
E, City no! obligated to TIF Agreement until all Forward Foundation contingencies are meL
F Forward Foundation can repay CityTtF investment at any time. If this is done, then
restrictions on sale and tax exempt uses in Section IV.C. are removed.
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