Janesville City Council Considers How Much to Borrow for Woodman's Center

The council expects to take a final vote on Dec. 12.

The project is proposed to include a main sheet of ice that would be the new home of the Janesville Jet hockey team. That sheet of ice and a second ice sheet, that could be converted to a hard court and/or turf sports area, would also accommodate area youth hockey teams and other sports teams, and potentially bring in tournaments that would support the local economy, supporters say.

And the facility would include an attached 20,000-square-foot convention space.

If funding can be secured, construction is envisioned to begin in the summer of 2023 and be completed by late 2024.

The city council also saw a figure for the first time on Monday night, on what it might cost to significantly pare the project down to just a single ice sheet on the former Sears site, eliminating from the plans the second ice sheet and convention center space. That would cost an estimated $29.5 million, the council was told. 

Taxpayer impact

If the city borrowed $15 million, the annual property tax impact for the owner of a $150,000 home in Janesville would be $33, or a total of $663 over 20 years.

If the city borrowed $20 million, that same homeowner would see $44 added to their annual property tax bill, or $884 over 20 years.

And if the city borrowed $25 million, the property tax impact on the owner of that $150,000 home would be $55 a year, or $1,105 total over 20 years.

That’s all based on the city borrowing over 20 years at an 5.35% interest rate.

The city has the borrowing capacity to take on the additional debt, Finance Director David Godek said. Godek also said he wouldn’t expect the additional borrowing to negatively affect the city’s credit rating. “This is an appropriate capital project to borrow money for,” he said.

There was no discussion Monday night of putting the proposed borrowing to a referendum.

Private pledges

So far, the project has secured $5.6 million in private pledges and the city has contributed $2 million from its budget for design work and another $5 million in federal COVID-19 relief funds.

The city hopes to secure another $4 million in federal dollars and $15 million from the state of Wisconsin.

City Council President Paul Benson said before city can ask for that state and federal funding, it needs to make a financial commitment that involves some level of borrowing.

Economic impact and expected operating loss

A UW-Whitewater study released Monday showed that were the Woodman's Center built, its annual local economic impact could be significant – up to $23 million a year. And, the study said, it could create 228 new jobs.

But it would also operate at a loss through at least 2028, according to figures presented Monday night.

With annual operating expenses ranging from $1.16 in 2024 to $1.36 million in 2028, and annual anticipated operating revenue ranging from $1.12 in 2024 to $1.29 million in 2028 -- and some ebb and flow in both expenses and revenue in the years in-between -- the  annual operating loss in the first five years would range from about $36,000 in 2025 to about $66,000 in 2028, the council was told.

Council member Paul Williams said he would have liked to see a projection farther out than 2028, “to see where that line is going.”

“I want to know what I’m voting on,” Williams said.

Taxpayer tipping point

Council member Heather Miller expressed concern about the impact to the city’s most financially vulnerable taxpayers.

“When people say I cannot afford another increase in my taxes, that may mean their cupboards are bare or their heat gets a partial payment. At the end of the day, we need to be mindful of that fact that not everyone can absorb a $30 increase,” Miller said.

“People on fixed incomes are telling me they cannot afford what they are already paying,” council member Michael Jackson concurred.

“I want this to happen,” Jackson said, but said it has the potential to “really tip them over the edge, as to what they can truly afford.”

In the end, however, Jackson said he could probably support borrowing $15-$17 million.

“The bottom line is I am going to do my best to make this thing happen,” Jackson said.

Council member Doug Marklein said he could support borrowing $15 million but added that “the perception is that a very small group of citizens support this,” whose children are involved in local youth sports. “How do we get the community to buy into this?” he questioned.

“I am disappointed that the private sector hasn’t ponied up for more,” Marklein added.

"I have a hard time going past $10 million," and could not support borrowing more than $15 million, Williams said.

Council member Aaron Burdick said, however, it might take at least $17 million in city borrowing to get the project over the finish line.

The proposed project “is a catalyst for growth,” Burdick said. “Everything makes sense to me on this, it’s just a matter of the numbers.”

Benson said if the majority of the council couldn’t support borrowing at least $15 million there may be “no point in going forward.”

“I think we are sitting at a fork in the road,” Benson said, adding that continued decline of the Uptown Janesville mall and Milton Avenue retail corridor in general are a worry if the Woodman’s Center doesn’t materialize.

“If we don’t do this, that is what troubles me the most,” Benson said.

“I think everyone knows I’m supportive of this deal,” Council member Dave Marshick said. “We need to have a community that attracts people, that attracts workers, that gets people to come and stay and plant their roots here. This is a project that would get us there.”

Friends group

Christine Rebout, executive director of the Janesville Area Convention & Visitors Center and member of Friends of the Indoor Sports Complex, a private group that’s backed the project, said the friends group expects in coming weeks to launch a public engagement campaign that will include listening sessions and a new website with a portal to make online pledges.

Rebout also said the Convention & Visitors Center woud commit to sharing up to $100,000 of its annual room tax revenue for the center, and would help market it.

Friends group member Larry Squire called the Woodman’s Center “a very, very complex project that has a lot of moving parts,” that he said would revitalize the mall and surrounding area.

Squire said the Woodman’s Center could have a similar impact on the Milton Avenue corridor, to what the ARISE Town Square has done for downtown Janesville.

And Angela Pakes, President and CEO of Forward Janesville, said the Woodman’s Center would be a job creator and vital community gathering space.

“It’s an investment in our community,” Pakes said.

Janesville Jets

“This is much bigger than the Janesville Jets,” said Bill McCoshen, founder and president of the Janesville Jets hockey team that’s in its 14th season playing in Janesville.

McCoshen said the organization would commit to bringing Junior Jets youth teams that now play in Madison to Janesville if the Woodman’s Center were built. McCoshen said the Jets would also contribute to the capital cost, in an amount to be determined.

“We want this to be a public discussion about what’s best for the community going forward,” McCoshen said.

McCoshen stopped short, when directly questioned by the council, of saying that the Jets would leave if the Woodman’s Center doesn’t materialize.

“I’m not going to come here tonight and make threats that if this doesn’t happen we’re leaving,” McCoshen said. However, “we are going to need to know sooner rather than later,” what direction the city intends to go, he said.

Mall future

And Tim Lindau, an attorney representing Uptown Janesville mall owner RockStep Capital, said the future viability of the mall will be positively affected by the addition of the Woodman’s Center.

Lindau said the mall is currently at just 59% occupancy.

“This property will be transformed,” Lindau said. “This is a major project for Janesville and for RockStep."

Citizen input 

The council also heard from about two dozen citizens on Monday night, some who spoke in-person and some who sent comments in writing.

Citizen comments ranged from urging the council to put the borrowing to a referendum, to concerns about the city having to shoulder operating costs in perpetuity, to saying it should be privately funded and privately operated. And some citizens expressed support for what they said would be a positive economic, community and local wellness impact.

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