[UPDATE] ‘Game-Changing’ Cannery District Project Gets City Council OK
$50M, 260-unit apartment complex will include affordable options
[UPDATED Nov. 24] The largest single residential project in the history of downtown Eau Claire’s ongoing redevelopment has received the go-ahead from the Eau Claire City Council. The council voted unanimously on Tuesday, Nov. 23, to approve a development and purchase agreement for the Cannery Square Project, a two-building, 260-unit apartment development in what’s known as the Cannery District, a former industrial area on the west side of the Chippewa River near downtown.
“Absent things like the Confluence Project, this is our largest redevelopment project in the last 20 years,” City Attorney Stephen Nick told council members.
The previous week, when speaking to the city’s Redevelopment Authority, which first had to approve the deal, Nick noted that, “We’ve had a couple of great projects already in the (Cannery) District that are up and operational, but this really is a potential game-changing project.”
Like the RDA – the city entity that owned the property – the City Council voted to approve the $1.5 million purchase agreement with P&R Companies of Duluth, Minnesota, for about 5 acres. The company pledged that the development – which would be just north of the Eau Claire Children’s Theatre along Oxford Street – will have a taxable value of at least $50 million, but the actual investment will likely be between $55 million and $58 million, city officials said.
In addition to the apartments, the building will feature first-floor commercial space. Under its deal with the city, P&R will pay $1.5 million for the property and will receive a closing credit of $500,000 to offset site preparation costs, Nick said.
We’ve had a couple of great projects already in the (Cannery) District that are up and operational, but this really is a potential game-changing project.
EAU CLAIRE CITY ATTORNEY
In a Nov. 17 presentation to the RDA, Nick said that the apartments will be available at a wide array of price points. Part of the contract with the city specifies that 20% of the units must have rents that are attainable by people making 80% of the county median income – or what is sometimes termed “workforce housing.” In addition, a smaller number of units will be priced to be affordable for those making 60% of the county median income, he said.
Rents will range from approximately $900 a month for the most affordable units to $3,000 for the higher-end, top-floor apartments, Nick said.
“This is really the first time without a low-income housing tax credit project or something else that a developer has agreed to include housing affordable at 60% of county median income,” added Jay Winzenz, the city’s finance director.
The development will be made possible in part because of Tax Increment Finance District the city created for the neighborhood. In a TIF district, new property taxes generated by new private construction help pay for public infrastructure and sometimes incentives for developers. In this case, the developer will receive $5 million in incentives from the city. Two payments worth $2 million each will be given when each building is completed, with another $1 million following when the workforce housing is available to renters, city officials said.
In return for the TIF funds, the guaranteed $50 million value of the property will generate $1 million in local property taxes a year, which will be used to pay off the incentives and public infrastructure funded through the TIF. (If the development doesn’t reach a taxable value of $50 million, the agreement specifies that the developer must make a payment in lieu of taxes to make up the difference.)
Nick said the city expects to close on the sale by March 1, with a phased construction of the two buildings beginning in 2022 or 2023. The project’s completion is expected in 2024 or 2025, and it must be finished by the end of 2025, he added.
While members of the City Council spoke in favor of city support for the project at their Nov. 23 meeting, some noted that the term “affordable” is relative when it comes to rental costs.
“I just don’t want it to go unsaid that I think a lot of folks in this community will not see $900 a month for an apartment as affordable,” Councilmember Kate Beaton said. “That still prices out a lot of people in our community, and a lot of people particularly living adjacent to this property in the neighborhoods that already exist there.”
Aaron White, the city’s economic development manager, said discussions about additional Cannery District projects are also progressing. A proposal for another residential project, dubbed “The Heights,” is expected to come to the RDA at its December meeting, while a pair of plans for the land that is currently Kessler Park are also anticipated in the near future, White said.