The city of Viroqua is in the final stages of consideration of a proposed three-story, $3.5 million downtown residential development.

Rock Avenue, LLC., began working with the city early this year on the 42-unit development that will include three different styles of residences and an underground parking garage. It will be located on the former site of Nuzum’s Lumber in downtown Viroqua adjacent to Parkview Manor.

Viroqua City Administrator John Severson said the city has taken several steps, including creating a new tax increment district (TID) to help pay infrastructure costs. The money will be recouped through taxes over time once the residential housing facility is in operation.

“Everybody says it’s hard to find a place to live or rent in Viroqua,” Severson said. “This development adds a nice apartment situation with market-rate... prices.”

Before the development, which is being headed by Luke Pelton of Reedsburg, came about, the city of Viroqua had a housing study done by the state of Wisconsin. Initial plans for the development came to the Viroqua City Council in April with an initial approval on the concept from the council in June.

Currently, Severson is preparing the development agreement, which was supposed to come before the city council at its meeting on Tuesday, Aug. 9.

Plans for the facility show it will have 21 one-bedroom units, 12 two-bedroom units with two bathrooms and nine two-bedroom units with one bathroom. The residential development will have an elevator. The facility will have 30 underground parking stalls and 30 parking stalls on the surface. The underground parking facility will be the first of its kind in Viroqua.

The TID district, known as TID 6, will provide the developer with $525,000 up-front. Counting infrastructure improvements the total TID contribution will be $692,000. Severson said the TID district hopes to recoup the investment over 13 years.

Severson said the city purchased the former Nuzum’s Lumber yard from Vernon Memorial Healthcare. The city’s plan was to make zoning changes to attract a developer.

“We have created a planned unit development zoning ordinance,” Severson said. “It was hard to do. Often in cities the size of Viroqua, zoning doesn’t allow for developments like this. The ordinance has been a good mechanism.”

The ongoing effort over the summer to get the development agreement in place has been strenuous, Severson said.

“It’s not a simple document,” Severson said. “We’ve finally gotten to the stage where enough people agree on what has been proposed that we can bring it to the council for consideration.”

The former Nuzum’s site has been used in recent years as a construction staging area for other downtown projects, including the new Viroqua library.