RACINE — It took him a year to do it, but Micah Waters finally learned Monday he will get the bank financing that will allow a $6 million Porters of Racine redevelopment to begin.
One year and three days ago, Waters and city officials announced the project to convert Porters, 301 Sixth St., into 37 apartments and seven ground-floor retail spaces. The city’s part was approving a tax increment district to help facilitate the project.
Waters and his uncle, Bob Waters, who co-own the historic structure, will redevelop it as the Porters of Racine Building, a reference to the high-end furniture store that lasted 152 years before closing about three years ago.
During its final months, Micah Waters, an architect, and his firm, Signature Architecture — also at 301 Sixth St. — began working on a reuse plan for the 80,000-square-foot structure that started as nine different buildings. It was tied together in 1939 in the art deco style which the new design maintains and modernizes.
However, what Micah Waters never expected when he announced the project was how difficult obtaining $2.3 million in bank financing would be. Three times he was working with a bank but saw collateral requirements grow unacceptable. “We couldn’t come to terms ... we all could agree to,” Micah Waters said.
The months slipped by.
Nor, he said, could the Waters replace bank financing with personal investor money — some pieces of the financing required a commercial bank’s involvement.
Eventually, in December they started talking with Southport Bank of Kenosha. On Monday, they learned Southport had approved their loan on terms they agreed to.
Micah Waters said he expects to close on the loan in about mid-March.
Initially, construction was to begin last spring and take about 18 months.
Now, with the bank borrowing arranged, he said they can start the remaining architectural work, approximately 30 percent of the project. Interior demolition could begin during that process or right when it ends. Exterior work could begin this summer.
With the apartments occupied, the project would be viable even without retail tenants, Micah Waters said previously. But the developers expect the apartments to help attract tenants to the seven storefronts that will face Sixth Street.
Waters said retail targets would include a specialty restaurant, convenience store, law offices and perhaps a hair salon or FedEx store.
Retail rents will range from about $510 to $1,830 monthly, he said. The shops will be served by common facilities behind them such as bathrooms, so all of each store will be usable shop space.
“We’ve been having some strong inquiries” into the future retail spaces, he said.
The apartments — all market rate, not subsidized — will range in rent from $500 to $995 monthly and in size from 480-1,550 square feet, Waters said.
The market will dictate in what sequence the structure will be built out, as the developers can be flexible. Early demand for retail spaces, for example, would dictate doing those early on.
In redeveloping the Porters building, the Waters had several advantages that slashed the outside financing needed: They own the property; they’re doing all of their own architectural work; and they will be their own general contractor.
The tax increment district will freeze taxes on the property at the current level, which the owners will continue paying. New taxes created by the future improvements will be plowed directly back into the project as added financing, for an estimated 20 years and total of about $1.1 million. Financing also includes a $160,000 city façade grant.
By the numbers
• $6 million — project cost estimate
• 80,000 — square feet of building to be renovated
• 37 — new market-rate apartments
• Seven — new ground-floor retail spaces
• 18 — expected months to complete project, from loan closing
• Nine — original buildings tied together to create Porters
• 16 — apartment floor plans to fit building’s quirks
• 152 — years Porters of Racine lasted as a furniture store