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A vote by the Racine City Council Tuesday will bring another piece of developable land under control of the city. It will also remove that same parcel from the property tax rolls for as long as the city controls it.
The agreement between the city and Johnson Bank will transfer the buildings and land at 441 Lake Ave. The city will pay Johnson Bank $100,000. The assessed fair market value of the property, as of 2017, is $552,600, according to the city. The city will also receive an annual lease payment of $10,000 to allow the bank to keep an ATM on the property.
The property is the site of a multi-lane Johnson Bank drive-up facility and a canopy cover. It also has an automated teller machine and approximately 20 surface parking spaces for bank employees.
Underground parking confusion
According to the Council agenda Tuesday, the city’s acquisition will include “an underground parking structure, surface lot and canopy drive through.”
A bank official was unsure why the city’s description of the property said there was an underground parking lot. There is no current underground parking. A stairway at the southwest corner of the property, capped with an attractive tower structure that matches the bank’s design diagonally across the street, leads to an enclosed storage space below ground.
“Underneath the drive-up facility is storage space, then there is surface parking around the building,” said Johnson Bank Regional President Karla Krehbiel. “But there is no underground parking underneath the building.”
City Administrator Jim Palenick explained: “It was designed as an underground parking structure and it has been turned into storage over time. It can be used again as underground parking. It’s one of the things that’s attractive about the property.”
Racine could green-light development in less than 10 years
Palenick said the city is not necessarily frozen by the 10-year term of the agreement with Johnson Bank. The city could choose to develop the property in less time, he noted, as long as it isn’t developed in a way that would be competitive for a financial institution. “But, for example, if we wanted to expand Festival Hall in two or three years, the agreement provides the opportunity to do that,” he said.
The Johnson Bank official was asked why the bank chose to enter into an agreement with the city instead of selling the property directly to a developer. “The city showed interest in the property, and we are friends with the city,” explained Krehbiel. “We thought it would be the right thing to do to sell it to the city, especially as we continue to look at what improvements they are making in the downtown area.
“We will continue to have a presence across the street, which is part of the agreement.”
Not a unanimous vote
The agreement met with a bit of resistance before it was approved on an 11-2 vote.
Sixth District Ald. Sandy Weidner, questioned the continuing policy of the city buying properties. “We continue to take property off the tax rolls and place it on the backs of the remaining property owners.
“Here we have an example of $552,000 of assessed property, which comes to about $18,000 a year in property taxes, that will no longer be collected by the taxing bodies in the city, the county and (schools).”
She said this, and other similar purchases “gives me great concern.”
Weidner added: “With our record of lack of development of so many properties we own, both as the City of Racine and the Redevelopment Authority of the City of Racine, I don’t think this is a good time for us to take on another property. Especially with the conditions that we have laid out in this agreement.”
Weidner and District 5 Ald. Steve Smetana voted against the agreement.
Palenick explained that the agreement puts the city in control of the eventual use of the land, and suggested the property may offer many different opportunities.
“If we bring it back as parking opportunities, it may generate parking revenues,” he said. “Or, it may allow a development that may not otherwise occur. We have a lot of flexibility and ability to develop it (because the city has control of it). That is more important than whether or not we lose that amount in property taxes.”
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