By B.C. Kowalski
City leaders could decide later this month on a proposal that would give $10.8 million in tax incentives to a developer for the first of two projects that would bring more than 300 additional housing units downtown, located on the site that once housed the Wausau Center mall.
The city’s Economic Development and Finance committees on Tuesday approved a development agreement with T. Wall Enterprises that would include $10.8 million in reverse tax incentives (including fees, costs and interest) to build a 154-unit apartment building with retail space on block four of the former mall site. A second project that would bring a similar number of apartments is planned for block five.
The two buildings would contain apartments renting from $800 to $2,879 and range from studio to 3-bedroom suites, according to data from meeting packet materials.
The first project to be completed by T. Wall on block four would begin construction next March and be completed and occupied by April 2024. The block five project would begin construction in February 2025 and be completed and occupied by March 2026.
According to Ehlers Public Finance Advisors, T. Wall needs the $10.8 million in tax incentives to make the project financially feasible. The incentives put the cash-on-cash return of the project at around 9.7%; Ehlers says the typical range for commercial projects is around 9-11%. T. Wall cites a 90% increase in construction costs since the pandemic as contributing to the need for public financing.
That $10.8 million is on top of the $3.09 million the city has paid so far. And that total doesn’t include street construction that will come with the project.
Numerous employers and other downtown stakeholders spoke in favor of the project Tuesday. Employers said more housing is necessary as they attract a shrinking workforce. And officials from the school district and Northcentral Technical College, who would be affected by money being locked up in the TIF district, said they approve of the plan.
The city council will take up the proposal for final approval on Sept. 27.
Corrections: This post has been updated to explain that the $10.8 million is only for the first of two projects, and to clarify that the figure includes interest and fees.)