Union Corners Development Project Shelved Indefinitely
Condo, Business Project Facing Economic Struggles
Updated: 7:17 am CDT September 18, 2008
MADISON, Wis. -- It's not just the banks ratcheting down financing for building projects.
VIDEO: Watch The ReportIf a city of Madison plan passes, there will be no more tax incremental financing or TIF loans for residential projects like condos.Meantime, one of the last big condo projects that had been slated to get millions in TIF dollars is stalled indefinitely.One city planner who specialized in TIF funding said a "perfect storm" of problems in the national housing market and an overbuilding of local condo units have shelved indefinitely the "Urban Village" planned for the Union Corners project at East Washington Avenue and Milwaukee Street, WISC-TV reported.The huge development is now struggling to survive.Between Winnebago and East Washington and Milwaukee streets, the roads are smooth and brand new.Union Corners was originally proposed as a $100 million mixed-use development, with 450 condos and lots of businesses.But more than two years after the city passed a TIF district for it -- sinking $1.6 million at the site -- the 15-acre lot sits empty.Alderman Larry Palm of nearby District 15 said, "I think our (TIF) investment will ultimately pay off from an infrastructure standpoint because we had to have some roads there. But clearly our TIF policies have been all over the board."New roads and sewer were only part of the original city TIF financing package for the site.A $5 million TIF loan to be paid back by the extra taxes generated by the development evaporated when the original project was shelved about a year ago.Now, the developers hope to jumpstart the project with a CVS pharmacy, just a block away from a Walgreens.Some say, even that plan is iffy."We can certainly expect a lot more push to see if we can develop that building into something larger in scale," said Palm.The Union Corners' TIF district includes a slew of other areas all the way down to Olbrich Gardens, so city planners said it should pay off the road improvements in seven or eight years.In the meantime, they said the push is on to cut off any city TIF loans to any more condo projects.Joe Gromacki, TIF Coordinator of the Community and Economic Development section of the City Planning Department said, " We needed to prove the point that the interior of the central business district, was a viable place to live -- not just to work -- but to live, and I think we've made that point."He said it was "time to try something else" and that planners always wondered internally when the "other shoe was going to drop" on the condo market, and, he said it has.Gromacki said the last 30 years, the city has generated one billion dollars in new growth by putting 100 million into TIF -- roughly half of which went to housing projects.But a city proposal stops that practice, targeting only commercial projects for TIF funds in the future.The proposal is in committee right now, working its way toward the city council.
VIDEO: Watch The ReportIf a city of Madison plan passes, there will be no more tax incremental financing or TIF loans for residential projects like condos.Meantime, one of the last big condo projects that had been slated to get millions in TIF dollars is stalled indefinitely.One city planner who specialized in TIF funding said a "perfect storm" of problems in the national housing market and an overbuilding of local condo units have shelved indefinitely the "Urban Village" planned for the Union Corners project at East Washington Avenue and Milwaukee Street, WISC-TV reported.The huge development is now struggling to survive.Between Winnebago and East Washington and Milwaukee streets, the roads are smooth and brand new.Union Corners was originally proposed as a $100 million mixed-use development, with 450 condos and lots of businesses.But more than two years after the city passed a TIF district for it -- sinking $1.6 million at the site -- the 15-acre lot sits empty.Alderman Larry Palm of nearby District 15 said, "I think our (TIF) investment will ultimately pay off from an infrastructure standpoint because we had to have some roads there. But clearly our TIF policies have been all over the board."New roads and sewer were only part of the original city TIF financing package for the site.A $5 million TIF loan to be paid back by the extra taxes generated by the development evaporated when the original project was shelved about a year ago.Now, the developers hope to jumpstart the project with a CVS pharmacy, just a block away from a Walgreens.Some say, even that plan is iffy."We can certainly expect a lot more push to see if we can develop that building into something larger in scale," said Palm.The Union Corners' TIF district includes a slew of other areas all the way down to Olbrich Gardens, so city planners said it should pay off the road improvements in seven or eight years.In the meantime, they said the push is on to cut off any city TIF loans to any more condo projects.Joe Gromacki, TIF Coordinator of the Community and Economic Development section of the City Planning Department said, " We needed to prove the point that the interior of the central business district, was a viable place to live -- not just to work -- but to live, and I think we've made that point."He said it was "time to try something else" and that planners always wondered internally when the "other shoe was going to drop" on the condo market, and, he said it has.Gromacki said the last 30 years, the city has generated one billion dollars in new growth by putting 100 million into TIF -- roughly half of which went to housing projects.But a city proposal stops that practice, targeting only commercial projects for TIF funds in the future.The proposal is in committee right now, working its way toward the city council.Copyright 2008 by Channel 3000. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
