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City now eyeing residential redevelopment for long-vacant former Trane Plant 6 site
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City now eyeing residential redevelopment for long-vacant former Trane Plant 6 site

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Residential development proposal for Trane Plant 6

A rendering of a possible residential-focused redevelopment at the former Trane Plant 6 site, which has sat vacant for nearly a decade. Three Sixty Real Estate Solutions is partnering with Stizo Development, LLC on the plans.

For nearly a decade, the city of La Crosse has been looking for the right redevelopment at a former industrial site on the North Side, and the newest idea on the drawing board is a proposal for a residential-focused project.

Still in very early stages, the redevelopment known in its preliminary plans as the “Red Cloud Development” would likely be mixed-use, and include a combination of apartment complexes and owner-occupied homes, as well as some office space and community space.

If approved, the project is expected to bring the value of the lot — now just over $1 million — to nearly $19 million, and increase tax revenue more than 10-fold.

The overall project is expected to cost $23,199,526 and produce 160 residences.

City staff are currently evaluating an application from the developers to access tax incremental funding, or TIF, which is a mechanism cities can use to direct property taxes toward developments.

The most recent other project proposal for this site was the STAR Center, a $20 million all-abilities workout and therapy facility. After jumping through several hoops, that project finally received rezoning approval from the city last spring, but city officials said it is no longer in the works.

Marvin Wanders

Wanders

Leaders of the STAR Center project told the Tribune Thursday that they have been quietly working on the project, but that the group was not ready for a public update. They did not specify if a new site has been found.

The Red Cloud Development, proposed by current owner Stitzo Development, LLC, a partnership between Three Sixty Real Estate Solutions and Borton Construction, would be completed in two phases, according to officials.

In phase one, a total of five buildings resulting in 146 apartments, 14 owner-occupied condos and an activity center with office space, fitness studio, gathering spaces and more, would be built on the the northern four acres of the property. The apartments would be catered to work-force residents, the outline states.

Rent for apartments would range from $799-$1,250 a month, and a condo would start at $229,000. The concept for the project mirrors that of the Great River Residence Apartments recently completed in downtown Onalaska.

A goal of the project is also to connect its namesake Red Cloud Park, just east of the developable site, to the marsh trails, making foot and bike traffic more accessible from the new project to downtown and campuses.

The Red Cloud team is looking at including senior living and a memory care facility in phase two of the project.

“We’ve heard from council members on the North Side that senior housing is desperately needed,” Marvin Wanders of Three Sixty told the Economic Development Committee on Thursday.

Currently the group is waiting on a study to evaluate the success of senior living on the project, though, and developers should know in the coming months if it could be included.

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The Red Cloud Development group is requesting $3.75 million in TIF assistance, which would cover 16% of the total project cost, or what’s been estimated to be the gap between construction costs and the projected real estate value.

Officials said that because there is not currently cash on-hand in the TIF district, it would likely be paid as needs arise, and not all at once. The group is requesting a payback date through 2036.

The gap between construction costs and the overall value of the end project is a bit skewed at the moment, officials emphasized, because of the increased costs of construction materials caused by the pandemic.

“We did analysis of what we thought we could realistically achieve in the marketplace, on the revenue side,” Wanders said. “The expense side, the construction cost side, is really is what it is, right. At the end of the day, there’s no secret sauce for construction.

“We have all-time record highs right now with lumbar costs,” Wanders said. “Projects we looked at two years ago, three years ago, and comparing those projects that are already in the round to what we’re seeing today, I don’t think is a realistic approach.”

The developers are proposing that the 16% covered by TIF dollars be supplemented by a state development grant to cover the remaining gap in cost to value, but they also expect costs of construction to be back to normal by the time they break ground.

In 2014, the same developers requested $2.9 million in TIF dollars to fund a mixed-use development on this same site, which sits just west of the LaCrosse Footwear building, that would have included grocery, housing and health care facilities.

But that funding was denied by the Economic Development Committee, with officials saying it did not generate enough additional tax revenue to justify the extra funding.

Commissioners Thursday did not signal during open session whether they thought this larger request, now seven years later, would instead be more beneficial for the city, though some showed early concern about the high construction costs.

The new Red Cloud project also calls for an extension of nearby Hager Street, which could connect St. Cloud and St. Andrew streets, estimated to cost $685,000, as well as decorative lighting, and any pedestrian and bike facilities needed, when funds become available.

The Red Cloud team is also evaluating that the environmental clean-up of the Trane Plant 6 site is up to standards for a residential redevelopment.

“Our team is doing our due diligence to pin that down with an environmental consulting firm,” Wanders said.

The remaining few acres of the southern end of the project site could be used by an outside user for development, officials said, but there were no concrete plans as of yet.

If approved, project leaders expect it to generate 50 to 60 full-time construction jobs and anywhere from three to six property management jobs.

This project is still in preliminary stages and has not yet been given the greenlight by the city. Officials are expected to take action on approving its funding next month, which would open the door wider for the development.

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