RACINE – Mayor Cory Mason and Milwaukee-based Royal Capital Group LLC announced a $50 million commercial-residential project on the shores of Lake Michigan.
The proposed project is being dubbed: @North Beach and will be built on the former Walker Muffler Manufacturing site.
Mason and Kevin Newell, president of Royal Capital Group, made the announcement Wednesday morning in the Mayor’s office. The firm served as the developer and owner for the mixed-use housing and commercial real estate for the Milwaukee Bucks $1 Billion entertainment district in downtown Milwaukee.
“This is a great time to be in the City of Racine,” Newell said. “This is momentum that is well deserved. We’ve got great folks that live here. Now we’ve got to have great quality products that match their needs.”
City officials laud project
The project, which will be located at 1129 Michigan Boulevard, includes two phases: 500 residential market-rate apartments and commercial use. Royal will pay the City $3.2 million for the 9.5-acre parcel.
Mason believes their partnership with Royal will benefit the community because it falls under the Racine Works project.
“There are 350 construction jobs that come with this project, the building will be LEED certified (a green building certification program) – they are excited, we are excited about some of the smart city components,” Mason said.
Racine Works is a new workforce training program to help prepare City of Racine residents for public and private sector construction job opportunities tied to the influx of development throughout Racine County due directly or indirectly to the arrival of the Foxconn Technology Group facilities. It was also announced that Racine Works will receive $1.5 million in support through the City, the Gateway Foundation and other sources.
Read more about Racine Works.
“I am excited to see such a large investment develop in my district,” said Alder Tracey Larrin who represents the neighborhood where the development will be located. “The 4th district offers a lot of great amenities like our amazing beach, great restaurants, and local shops, and is just a stone’s throw away from our historic downtown. I know this will be a draw to the district and I am excited for what that means for the neighborhood.”
Details on the project
Royal Capital’s project is part of a tax incremental finance (TIF) district, which has 14 years of life left.
A TIF district is a development tool municipalities can use to attract business. The way it works is that a financing district is created and a base value of that district is established by the taxing jurisdictions. The increased value of the property is still charged at the base rate, but the district uses the increased tax revenue to pay for the infrastructure projects and in this case development costs.
Shannon Powell, the communications consultant for the City of Racine, said the proposed project includes a split of 90 percent of the tax increment generated on the project being diverted to Royal Capital and 10 percent being paid to the City of Racine. A total of $9.6 million in tax increment is expected to be created by the project.
Plans include having the city pay $1 million to build infrastructure projects. However, those infrastructure projects will be paid back by the developer to the city through the tax increment created on the project.
“So the city is not losing anything and they aren’t giving anything away,” he said. “The developer is funding the cost of this over the course of 14 years.”
The first phase of the project includes building 242 apartments.
The one, two, and three-bedroom, market-rate apartments will be built with internal parking and commercial spaces for potential restaurants, coffee shop, fitness gym, and other retail and commercial uses, according to a press release by the City.
Phase 2 is anticipated to include a similar unit count, additional commercial space and structured parking.
The Common Council would need to approve the sale and the terms of the developer’s agreement. The site is considered ready for industrial development, but more work will be needed for a residential project.
The first phase of the construction project is expected to begin this spring and be open in 2020.
“This is a very exciting announcement. Upon completion, @North Beach will be the largest residential housing development in the City for more than a generation. With developments like this, Racine will be the community of choice for people to work, live, and play in Southeastern Wisconsin,” Mason said.