The JT has an article, read it here, about the city's plans for the Walker Manufacturing site just north of downtown Racine.
From the article; the city plans to spend up to $5.5 million in TIF funding and an additional $10 million in developer incentives to create $74 million in new housing. "Now we're putting the City in the role of general contractor" said City Development Director Brian O'Connell who added "We really believe this is what we have to do to bring this site to market in these economic times."
Is there a housing shortage in Racine? Isn't our population declining? Why isn't the private sector interested in building on prime lakefront property? Could it be that taxes are too high? How has the city performed on other real estate dealings? Why should big real estate developers get 21% of their projects cost paid for by others? Could "these economic times" be trying to tell us something? Would anyone other than the city hire the city to be their general contractor?
These are just a few of the questions that should but won't be asked or answered by city officials. So I will answer them. There isn't a housing shortage in Racine. In fact, there is a housing surplus. This is what happens when people move away and don't take their houses with them. Yes, Racine's population has been declining. The private sector will not foot the entire bill for a huge housing project in Racine for any number of reasons, chief among them that they can't make money because of a housing glut and high taxes in Racine. On taxes, Racine has the highest property taxes in the county, or to put it another way, the greatest building disincentive in the county. The city's dangling of $15 million should be acknowledged as evidence that they are aware that taxes are now so high that nobody will build in Racine without a handout. Regarding past performance on development ventures, the city has failed repeatedly and most of the city's TIF's are losing money. There is no reason to think this project would fair any better. Big developers are no more deserving of tax breaks than is the person that fixes his roof or remodels his kitchen, the difference is developers schmooze with politicians and give them campaign contributions and the regular Joe doesn't. "These economic times" are trying to tell us not to build additional housing and not to build a typewriter repair center either. And lastly, nobody in their right mind would hire the city as a general contractor. But then, I rarely accuse city officials of being in their right minds.
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3 comments:
Spot on.
I would love to see how Brian O would make it in the real world, working for a real world real estate developer.
OK - there are about 40 condos in the Gaslight building, I think there are about a dozen still unsold. From what I've seen, there's only one resident in the condos on Main and State. There are condos unsold in just about every other lakefront development. Yet the city wants to add (did I read this correctly) 300 units at this site and act as financing agent/developer? Whiskey Tango Foxtrot!
Caledonia created a small TID a couple years ago to assist a developer with blight remediation at a site about a block from the lake. Not sure if this condo development is on hold indefinitely, or just completely defunct because they couldn't pre-sell enough unit to even get it off the ground - fortunately before the Village had committed any TIF money.
The market just doesn't exist for this right now. Do they have some sort of crystal ball over at City Hall that's predicting some huge housing boom in a city with 15% unemployment? Again, Whiskey Tango Foxtrot!
They have a crystal ball that says the development folks better develop something or they might have to downsize. Taxpayer money - not an issue.
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