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One of the Machinery Row buildings has suffered “significant deterioration” and as a result, Gorman and Company has decided not to move forward with buying the properties.
Now the city wants to demolish the buildings at 820 and 900 Water Street that Gorman & Company once sought to redevelop so that they can sell the land to another developer and get it back on the tax roll. But neither Gorman nor the City own the properties. Rodney Blackwell, the owner of Iowa-based development firm Financial District Properties, has three of the four parcels and he has been in default of the developer agreement he had with the city. Still, the city holds the deed to those three properties but it hasn’t recorded them.
At a meeting held Wednesday night, Development Director Amy Connolly recommended that the city terminate the relationship with FDR MR LLC and acquire the remaining lots, including 820 Water St., 900 Water Street, a lot on the corner of Water and Marquette St. and the former Sam Azarian Wrecking building.
But the recommendation wasn’t an easy call to make.
“These buildings are part of Racine’s history… it’s the only remaining part of the Case Plow Works… look at what this used to be, this was amazing,” she said.
New Vision Needed For Machinery Row
The city owns about six acres along the riverfront and a section of land leading from Water Street to the river front. So if they can acquire the property, the buildings can be demolished, staff can come up with a different plan for the property and the 14-acre can be sold to another developer, Connolly said.
The city will lose $9 million in Historic Preservation Tax credits because the buildings won’t be preserved, but Connolly told the group that it is still a tax incremental finance district. Given the potential for major developments coming to southeast Wisconsin, an opportunity to attract national developments is possible.
But it plans to work with the Wisconsin Economic Development Corporation to modify its agreement to receive a $1 million grant for idle and industrial sites for demolition and abatement and grants from the DNR for the Riverwalk. Given the potential for major developments coming to southeast Wisconsin, an opportunity to attract national developments is possible.
“We’re just in a way different place than we were three years ago,” she said.
Acquiring the property
In December, Blackwell received a notice of default from the city on the development agreement and a right to cure that default. In 2014, the city gave Blackwell a bridge loan of $4.5 million to buy the property. Gorman & Company Inc. looked at developing 820 and 900 Water St., which are two buildings in the Machinery Row project.
After the Common Council and RDA met in closed session Wednesday, they voted unanimously to direct staff to bring back a report within 60 days outlining the obligations and costs of taking over the property. The report will outlining the city’s environmental liability, tax implications, relocation expenses for the existing tenants in the buildings and the cost of demolishing the buildings.
“So how do we end our relationship with him? How are we going to break up? That’s what we need to decide,” Connolly said.