BY Alex Gary - May 21st 2024

 

BELOIT

Four Wisconsin developers, including a familiar name from Beloit, presented intriguing housing plans to the Beloit City Council Monday night in hopes of getting a share of $6 million in available funds.

The city, at best, can only fund three of the housing development plans.

“All of them would be really good additions to Beloit,” said Beloit Economic Development Director Drew Pennington. “Although there is a scoring matrix, the city council will have discretion on how to fund their top choices. They can give out the full requests or try to spread it around.”

In March, the city announced a one-time offer of $6 million in Tax Increment Financing (TIF) funds for developers of apartment buildings at price points geared for working families. The money is meant to be “gap” financing for developers using tax credit incentives meant to lower construction costs.

Developers could ask for, at most, $3 million. The city received four proposals with each asking for the full amount. Developers of two of the proposals said they could scale back their plans if they did not get the full $3 million. The other two developers said it’s all or nothing.

The council will discuss the various presentations on June 10.

A shortage of housing is a national problem. The Great Recession of 2007 to 2009 drove thousands of home construction companies out of business. Although single-family and multi-family construction picked back up in high-growth, retirement regions in the south and southwest, it never returned to pre-2007 levels in much of the Midwest.

There have been only 129 new single-family home permits in the City of Beloit since Jan. 1, 2020 and the only new multi-family project since the beginning of 2022 was the 88-unit second Wright & Wagner building.

In the meantime, costs for the existing housing have soared. The average price of a home in Rock County has increased from $223,024 at the end of 2021 to $268,101 at the end of 2023, according to Realtors Association of South Central Wisconsin.

Rents are going up just as quickly. In the 2021 study,

researchers listed the rents of the four newest multi-family projects built in Beloit since 2020. You could get a one-bedroom apartment at The Phoenix for $1,335 per month. Now, that cost is $1,540. A one-bedroom at Wright & Wagner was $1,329 and that’s increased to $1,451. Rents for a one-bedroom at the The Lofts at Hawk Ridge were $1,010. That’s increased to $1,205 at minimum, according to apartments.com. In 2021, rents for a two-bedroom at Elm Grove Estates started at $997. That’s jumped to $1,215, again according to apartments.com.

The four plans being presented Monday include:

  • The Alternative Continuum of Care of Dakota Dunes, based in Madison, wants to build a four-story building at 1865 Riverside Drive. The project, which would be near Armstrong Eddy Park, would have 55 units, 46 of which would be set aside for families that make less than 60% of the County Median Income for Rock County.
  • Northernstar Companies of Milwaukee wants to build four two-story buildings at 1642 Sixth Street. The Rock River Town Homes would be close to Krueger Park and Beloit Memorial High School and would have 88 units with 56 set aside for working-class housing.
  • The Alexander Co., based in Madison, wants to build seven-multi family buildings off Gateway Boulevard east of Interstate 90. That project would add 94 units with 84 set aside for lower rents.
  • The Hendricks Commercial Properties plans to demolish the downtown building at 80 — 100 E. Grand Ave. that partially hangs over the Rock River. The company wants to build a four-story mixed use building in its place. The project would have commercial spaces on the first floor and 45 apartments on the top three floors with 27 set aside for working-class families.

Although Hendricks has done projects using tax credits as part of the financing before, this would be the first that targeted low-income tax credits, according to Daniel Barkes, vice president of development for Hendricks Commercial Properties.

“Given the (conditions of the housing) market, it’s something we’re exploring across the country,” Barkes said.

At the end of March, Hendricks announced that it was going to tear down the East Grand Avenue building by the end of year anyway. In its application, it said that they could go ahead with the project even if it didn’t get the full funding.

“The (Wisconsin Department of Natural Resources) wants that building out. The city wants it out. We’d like to have it out,” Barkes said. “It’s the center of downtown. We want to do it right and it would create an opportunity for school teachers, firemen, police officers to live downtown.”

The Alternative Continuum of Care developers also said they could proceed even if they don’t receive the full $3 million. The project near Krueger by Northernstar and the Alexander Co. project out east of I-90, though, need the full $3 million allotment to go forward.

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