Massive Madison development plan advances
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A rendering of the Madison Station development. Photo courtesy of Artesia Real Estate Investments
A city board approved the plan Wednesday for an ambitious $631 million mixed-use development project in the Madison area.
- The vote of support from the Industrial Development Board was the first step in the developer's quest for tax incentives to help pay for infrastructure for the project.
Why it matters: Metro Councilmember Nancy VanReece says the 1.7-million-square-foot project, called Madison Station, will be "transformative" for the area.
- In recent years, Madison has added concert venues, breweries, restaurants and an array of multi-family housing projects and seems primed to become a hotspot.
- VanReece compared the impact the Madison Station will have on the neighborhood to the way the Capitol View development changed the stretch of Charlotte Avenue downtown.
Details: The plan from Texas-based firm Artesia Real Estate Investments, in partnership with the Hamilton Group, calls for 1,694 multi-family housing units, commercial space, office space and pocket parks.
Zoom in: The linchpin to the development is a recently completed $12 million road project to extend Madison Station Boulevard.
- The handsome new road has a roundabout, wide sidewalks, protected bike lanes, street lights and park benches. The boulevard, which was first envisioned by city leaders approximately 20 years ago, will function as a service road to Madison Station.
- The developer is promising 10% of the housing units will be affordable.
- The property currently is home to a retail strip anchored by the Garden Fresh Food Market. The existing tenants will remain and have the opportunity to sign leases at the new project once it is finished.
What's next: The Industrial Development Board's unanimous vote Wednesday paves the way for $68.8 million in tax increment financing for Artesia.
- The concept of tax increment financing is that an expensive new private development generates more property tax revenue for the city. With city approval, a developer can tap into a fraction of the future property tax collections their project generates to pay for infrastructure.
- Metro Council must also sign off on the development plan and the loan agreement.
By the numbers: The Madison Station parcel currently generates just under $188,000 annually in property taxes. Over the 30-year term of the financing proposal, Madison Station is expected to generate about $245 million in property taxes.
What she's saying: "The research clearly indicates that [tax increment financing] is an excellent way to be sure that economic impact happens where the investment occurs," VanReece says.
The other side: Such tax increment financing deals have come under increased scrutiny in recent years. Metro Councilmember Bob Mendes believes the city needs a well-defined strategy for when to use tax increment financing, including budgeting a dollar figure for how much future property tax revenue to give away.
- In a blog post earlier this year detailing his concerns, Mendes estimated that by the 2026 budget year the city will either forgive some property tax bills or offer tax increment financing loans to the tune of $90 million annually.