City Fights Blight
Two vacant commercial buildings on Grand Avenue were demolished last month as the city of Merrill continues to fight blight.
On the west side, the city's Redevelopment Authority (RDA) removed the condemned building at 416 Grand Ave. The lot is still privately owned, so the city has no plans for any further work on the site.
At 318 Grand Ave., the tax delinquent building was torn down last week. The RDA received a $20,000 redevelopment grant through WHEDA to cover the costs of demolition. That site will likely be purchased by a neighboring property owner and converted to a parking lot.
It costs about $35,000 each to demolish these old buildings. But City Administrator David Johnson sees that as a worthwhile investment. The derelict buildings are an eyesore and detract from the value of the neighboring buildings, Johnson said. Tearing them down enhances values and may even stimulate new development.
"A lot of these buildings are not paying taxes to begin with. What are we losing? Sometimes it's not a bad thing to lose a building," he said. "It will cost us money, but if we don't do anything it will have a definite detrimental impact. It will cost us more in the long run not to do it."
The RDA was created by the city in 2004 specifically to carry out blight elimination and urban renewal programs and projects. The RDA acts as the agent of the city in planning and carrying out such activities approved by the mayor and city council.
The city's blight elimination and redevelopment efforts began in earnest in April 2010, starting with the East side business district. For the past two years, the city has had a contract with Redevelopment Resources of Wausau to work on a wide range of redevelopment projects in the city.
The first buildings to be targeted were the Courtview Apartments on East Main Street, the former J & J Bakery on First Street and the Lincoln House on Mill Street.
The Lincoln House was owned by a bank when the city acquired it for $150,000. The bank had put a new roof on to preserve the building. The city has made additional updates to stabilize the building.
"If the city hadn't taken over the Lincoln House, we'd have a big building sitting there with boards on the windows," Johnson said.
A would-be developer unsuccessfully applied for loans through WHEDA last year and did not re-apply this year. The city put out a request for proposals this fall, but did not receive any interest from potential developers. For the time being, the city has enough rental income from the property to break even, but the goal is to get the building in to the hands of a developer who will invest in a renovation.
"The city does not want to be a landlord," Johnson said.
"The Lincoln House could be a showpiece downtown," Mayor Bill Bialecki added.
"We need one viable developer," City Finance Director Kathy Unertl said. "We're going to go back and try to market it a little bit differently."
The city is investigating potential grants available through the Wisconsin Economic Development Corporation.
"There are different options depending on how the building is going to be used," Unertl said.
The Courtview Apartment building had deteriorated to the point where demolition was the only feasible option, Bialecki said. The lot where the building stood will be converted into an access way to reach the parking area south of Main Street and the river. A number of parking spaces also will be created as that project gets underway next summer. The total cost of that project is estimated at $100,000.
The former bakery was torn down last year and will remain an empty lot until and unless a developer comes along with plans to build on the lot.
The building at 811-813 E. First St. was acquired by the city after going tax delinquent. That building, which is structurally sound, is currently undergoing exterior renovation. When the work is done, the building will be in compliance with the city's exterior maintenance code and will be offered for sale. Unertl said there are potential buyers interested in the building.
"It wasn't a marketable building in the condition it was in," she said.
Also in the downtown area, the city assisted the owner of 820 E. First St. with making needed structural repairs to that building.
Another building seeing some attention on the west side is 406 W. Main Street (Center for Creative Wellness). The city's Redevelopment Authority is working with the property owner by providing a low-interest loan for a façade improvement.
The city's next target on the west side is the former Wire Products building, near the Franklin School Apartments. The city is working with the property owner to conduct environmental assessments on the long-vacant factory building.
Current city officials acknowledge that blight elimination efforts should have gotten underway many years ago. The buildings that are in poor condition took a long time to get that way, and fixing the problem also takes time.
"Everything is a long, drawn-out process," Unertl said.
In the TID budgets for next year, the Redevelopment Authority will turn its attention to the Sixth Ward, with $250,000 in the 2013 budget for acquisition and demolition in the West side TID.
The city has also gotten more aggressive with exterior maintenance enforcement in residential areas.
In the past year, the city has updated its maintenance codes to made enforcement easier and has gotten more aggressive with non-complying property owners, who now find themselves facing fines in municipal court.
"Non-compliance could get extremely expensive," said city attorney Tom Hayden.
While the city has stepped in to fight blight where property owners are unable or unwilling, city officials are proud of the efforts of property owners who have taken the initiative to make improvements on their own.
Unertl pointed to the project presently progressing on the island between the Sixth Ward bridges, where three new storage structures are being built. Zastrow the Beer Man is planning a 20,000 square foot expansion of its facility on Thielman Street. Agra Industries has purchased the former Sixth Ward fire station for expansion and is also planning to expand their production facility. Northcentral Technical College is making a major investment in the Public Safety Training Center on Champagne Street.
Smaller projects also make a big difference, such as the renovation of the Fresh Boutique building on First Street, and façade improvements to Hargrave Appliances and the Yours and Mine consignment shop downtown.
In the big picture, the city hopes to gain by eliminating blight, encouraging redevelopment and assisting property owners in making improvements. Ultimately, a community that shows pride is more attractive to potential developers and businesses.
"If you don't have a prosperous looking downtown, who wants to locate there?" Johnson said.
"Our overall goal is to have an attractive community so we can attract businesses and additional tax base," Unertl added.
There has been very little new housing built within the city in the past 20 years, Johnson noted. New construction all but died in the city in the past year. The increase in the city's overall value last year due to new construction was .019%. In terms of the city's tax levy limit, that tiny increase allows the city to levy a mere $860 more in local property taxes for 2013.
"We have the space in the city for building these houses, we just need to attract the people to build them," Johnson said.
Tax Incremental Financing Districts (TIDs) have been used by Merrill for years to help pay for infrastructure improvements for new development. The taxes paid on new development in TIDs is available to be spent on TID projects. Of Merrill's eight TIDs, three are designated as blighted TIDs: covering parts of the West side, North Center Avenue and downtown.
Tax increment generated by new development in more prosperous TIDs can be transferred to benefit the blighted TIDs. For example, the Walmart Supercenter development would be located within a TID, along with any associated development likely to be attracted by the super center. Tax revenue generated by those new developments could be used to pay for improvements in the blighted TIDs.