A proposed $64 million apartment complex on La Crosse's long-vacant Kmart site is a step closer to construction, as developers have formally requested financial assistance from the city. Three Sixty Real Estate is seeking $8 million in Tax Increment Financing (TIF) to close a funding gap for its Copper Rocks development project.
The property, a prominent commercial site in the city, has remained undeveloped for approximately seven years, causing frustration among local residents and officials. The proposed financing mechanism is designed to use future tax revenue from the project itself to fund the assistance, preventing a direct impact on current taxpayers.
Key Takeaways
- Project: A $64 million apartment complex named Copper Rocks is planned for the former Kmart site in La Crosse, Wisconsin.
- Developer: Three Sixty Real Estate is leading the development effort.
- Funding Gap: The project faces an $8 million financial shortfall.
- City Assistance: The developer has requested $8 million in Tax Increment Financing (TIF) from the City of La Crosse.
- Timeline: Negotiations are underway, with both parties hoping to finalize an agreement by early 2026.
Details of the Copper Rocks Proposal
Three Sixty Real Estate has outlined an ambitious plan to transform the derelict Kmart property into a modern residential hub. The Copper Rocks project, valued at $64 million, aims to introduce a significant number of new housing units to the area. However, the project's financial viability currently hinges on bridging an $8 million gap between development costs and available private funding.
To overcome this hurdle, the developers have approached the city with a formal request for public assistance. Marvin Wanders, a co-owner of Three Sixty Real Estate, stated that the project is closer than ever to breaking ground. He emphasized that the final step involves aligning the financial components to create a workable plan for all stakeholders.
"What it really boils down to now is can we get all the economics in a box that actually work for everyone," said Marvin Wanders.
The successful development of the site would represent a major step forward in revitalizing a key commercial corridor that has been underutilized for years. The proposal is currently under review by city administrators, who are evaluating the economic benefits and long-term implications of the TIF request.
What is Tax Increment Financing (TIF)?
Tax Increment Financing, or TIF, is a public financing tool used by municipalities to stimulate economic development in specific areas, often those that are blighted or underdeveloped. When a TIF district is created, the property tax base is frozen at its current level. As new development occurs and property values rise, the additional tax revenue generated (the "increment") is captured and used to pay for public improvements or to provide incentives for the development itself. This method allows projects to self-finance over time without drawing from the city's general fund or raising taxes on other properties.
The Role of Public Financing
City officials have explained the mechanics of the proposed TIF assistance to reassure the public that it will not burden existing taxpayers. The funds for the developer would be generated exclusively by the new value created by the Copper Rocks project itself.
Julie Emslie, La Crosse's economic development administrator, clarified the financial structure of the deal. According to Emslie, the assistance would be provided in the form of rebates on future property taxes generated by the developed site.
"It would not have an impact on the taxes of other residents or property owners within the city because the assistance that would be provided would come directly from the increase in taxes that that property would bring itself," Emslie explained.
This structure ensures that the city's financial support is directly tied to the project's success. If the development increases the property's value as projected, the resulting new tax revenue will cover the $8 million incentive over a set period. If the project does not generate the expected revenue, the city's financial exposure is limited.
Site History at a Glance
- Previous Use: Kmart retail store
- Period of Vacancy: Approximately 7 years
- Current Status: Undeveloped commercial lot
- Proposed Use: $64 million multi-family apartment complex
Community and Council Perspectives
The prolonged vacancy of the Kmart site has been a point of concern for both residents and city leaders. The empty lot is seen by many as a missed opportunity for economic growth and community enhancement. Members of the La Crosse City Council have expressed strong support for redeveloping the property, though they remain focused on ensuring the final project is beneficial for the community.
Gary Padesky, the City Council Member representing District 7 where the site is located, spoke about the community's desire for action. He noted that residents in his district are eager to see a productive use for the land.
"I think what would be best for both the city and the district is something going in there," Padesky stated. "I know the neighbors over there, they want to see something. They don't like what's there. They understand we have to get that site developed. It's been going on six or seven years now."
This sentiment reflects a broader consensus that while the right project is important, the continued stagnation of the site is undesirable. The council's role will be to balance the developer's needs with the long-term interests of the city, including factors like housing density, traffic impact, and overall economic return.
Negotiations and Path Forward
With the formal TIF request submitted, the city and Three Sixty Real Estate have entered a critical negotiation phase. Both parties are working to structure a development agreement that meets their respective goals. The process involves detailed financial analysis, legal review, and public input before a final proposal can be presented to the La Crosse City Council for a vote.
The developer and city officials are optimistic that they can reach a mutually beneficial agreement. The target for finalizing these negotiations is early 2026. If the City Council approves the development agreement and the TIF package, the project can move forward swiftly.
The subsequent steps would include the demolition of any remaining structures on the site, followed by the commencement of construction for the Copper Rocks apartment complex. A successful agreement would mark the end of a long period of inactivity at a key La Crosse location and signal a new phase of residential and economic growth.
