City officials and Merge LLC reach development agreement for Third Street properties
By Joe Bachman
STEVENS POINT — City officials have hashed out the details in a developer’s agreement for the coming North Side Yard project at 1017 Third St.
According to the agreement, the developer, Merge, LLC, would begin construction on the mixed-use development by Dec. 31 of this year, and complete the first phase, (two 4-story buildings) by Sept. 30, 2021. Phase two would then be completed by Dec. 31, 2022.
The city will provide up to $3 million in support to partially cover project costs. This is assuming that the value of the project is the full and expected amount of $25 million. If valued at $15 million or less, the city will only pay $2,250,000 to the developer. (75 percent)
These incentives will be paid through excess city TIF (Tax Incremental Finance) revenues, in which final payments will cease following the 2041 tax year. These will not be charged against the city’s credit, taxing power, or revenue generated from other properties within TID District 10, according to the city documents.
District 6 Alder Jeremy Slowisnki questioned the $3 million figure, and what makes up “value” for a property such as the future Third Street developments if vacant. City Attorney Logan Beveridge answered his question.
“So when you’re talking property assessment, there’s a few different approaches to value. If you had a long standing building, then you can look at what’s called an income approach — and you can see what the trend has been in terms of the rent that the building is generating,” said Beveridge. “With brand new commercial construction, typically, you’re looking at the cost that went into building it.”
Comptroller/Treasurer Corey Ladick touched up on the level of the risk the city would take with such an incentive.
“This protects the city better because if the value drops, we would give them less of a pay-as-you-go incentive.” said Ladick.
“This property has been sitting empty for a long time, and I think it’s an awesome development,” said Slowinski as he motioned to approve the development agreement. “I really think that this will continue to move the downtown area in a positive direction.”
This will see final approval through council.