RACINE — The City Council voted unanimously on April 19 to extend a developer’s incentive package to J. Jeffers & Company that will aid with the construction of new market rate apartments on the grounds of the Historic Horlick District.
J. Jeffers & Company have proposed a $37 million project that will construct two new apartment complexes with 160 market rate apartments.
RACINE — A new training program is expected to help City of Racine residents obtain jobs.
In addition to increasing the value of what was abandoned property, J. Jeffers & Company will abide by the Racine Works Program required of developers with incentive agreements with the city.
RWP aims to increase employment for Racine residents who are either underemployed or unemployed.
The city is offering J. Jeffers & Company three development incentives: a utility grant, a loan and a developer-funded TID (tax increment district).
The $500,000 utility grant for infrastructure improvements on the site will come from the storm water utility and the sanitary sewer surcharge.
Secondly, the city will borrow $4 million from the Wisconsin Board of Commissioners of Public Lands, which the developer will pay back within four years at an interest rate of 3.2% per year.
This is similar to the development deal with The Main Attraction LLC, which is converting the abandoned Zahn’s Department Store into a chic, boutique hotel on Monument Square.
Lastly, the city will create a developer-funded TID with a maximum total incentive up to $12 million.
How does this work?
The city is not giving the developer $12 million.
The TID earns money in the following way: the city sets a base value when the TID is created. As the property value increases due to the development, the difference between the base value and increased value will be set aside.
Every TID is different. In this case, up to $12 million from the TID will be returned to the developer to help fund the project.
The rest of the development costs will be financed by the developer.
Shannon Powell, the city’s director of communications and chief of staff for the mayor’ office, explained because J. Jeffers is creating something of value; that is, increasing the value of the property. As such, the city will permit him to keep up to $12 million of that increased value.