JAILHOUSE CONVERSION: Administration Center Redevelopment to Target Downtown Workforce

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CHRIS HUBBUCH [email protected] Jan 14, 2017 4

Marvin Wanders examines a cell block in the former La Crosse County courthouse and administration building Friday. Wanders and his business partner plan to gut the 107,000-square-foot building and convert it to apartments for middle-income professionals who want to live downtown.

Marvin Wanders of Three Sixty Real Estate Solutions has planned a $15 million renovation project to transform the former La Crosse County Administration Center into a 112-unit apartment complex.

The developer of the former La Crosse County administration center says he will target middle-income workers looking to live downtown in an effort to fill a new and growing niche in the housing market.

Stizo Development, a partnership of Three Sixty Real Estate Solutions and Borton Construction, purchased the 51-year-old building for $250,000 with plans to convert it to housing for students at nearby Western Technical College.

But Three Sixty owner Marvin Wanders said there’s a growing demand for “workforce housing,” which lender FreddieMac defines as unsubsidized multi-family housing with rents that are affordable for households with incomes between 80 and 120 percent of the area median — or about $32,500 to $48,900 a year in La Crosse.

With the change in concept — including plans to add another floor — Wanders said construction costs have jumped to about $15 million. The end result is expected to add about $10 million to the tax base, about $3 million more than originally projected.

Called “The Hub on Sixth,” the development will be platted as condominiums, though Wanders said for now he plans to lease the apartments.

Wanders said he’s responding to changes in the community since he made his offer on the building in 2013.

“Over the past four years we recognized this shift in the demand and the intensity of people living downtown,” he said. “Because this process took so long, it’s actually been a benefit.”

Last year, Three Sixty completed the Aguilera, a 57-unit apartment complex just off the University of Wisconsin-La Crosse campus. To his surprise, Wanders had applications from young professionals — and even some families — wanting to live in a building designed with college students in mind. (By law, landlords can’t limit tenants based on occupation or enrollment status, but they can build in a way they think will suit a particular demographic.)

La Crosse City Planner Jason Gilman said a combination of factors has led to a surge in demand for downtown housing: with their kids grown, baby boomers are looking to downsize and live closer to services and amenities; meanwhile, millennials with heavy student debt want to live close to work and cut down on transportation and energy costs.

And with companies like Logistics Health Inc. planning to add hundreds of new jobs, demand for downtown housing continues to grow.

“The housing becomes sort of a key component to attraction and retention of workforce,” Gilman said.

Belle Square, a mixed-use development by Logistics founder Don Weber, will add 93 more units, but with studio apartments starting at $1,312 a month, that housing is out of reach for many workers.

Wanders said there’s a shortage of units in the $700 to $1,200 a month range, which would be considered affordable housing for that income bracket. He said there is a waiting list for the approximately 40 such units he owns in upper-level residential spaces.

“If you have workers coming to town and they don’t have a place to live … it can stifle development,” Wanders said.

Of course there is also demand for student housing.

UW-L has dorms built to hold just 3,177 of the 10,624 enrolled students, and an occupancy rate this year of 109 percent. Western Technical College typically has 420 to 440 students apply for the 200 available beds in its dormitory.

Constructed in 1965 as a courthouse and jail, the building at 400 N. Fourth St. has housed county administrative offices since the completion of a new law enforcement center in 1997. In a move that angered some conservatives, the county board voted to sell the building rather than spend an estimated $18 million to remove asbestos and renovate it.

The county instead purchased and remodeled the former Associated Bank building as part of a complex $23 million campus reorganization connected to the sale of a parking lot for the $68 million Belle Square development.

Stizo’s renovation will involve gutting the 107,000-square-foot building. The cell blocks will go, but Wanders said he’s looking for ways to reuse some of the steel bars and other materials in the reconstruction. He also hopes to preserve decorative features such as the lobby lighting.

Plans call for tenant parking in the basement, but Wanders said he is still finalizing plans to provide enough for the entire building.

Construction is expected to begin this spring with the building ready for occupancy by the summer of 2018. The county has relocated its offices but is still clearing out desks, chairs, file cabinets and other fixtures.

Wanders said most of the 112 units will rent for $700 to $1,200 a month, though 18 fourth-floor luxury lofts will go for more than $2,000. Plans call for a fitness center, lounge and rooftop basketball court — “a pretty amenity-rich, cool place to live.”

“If you have workers coming to town and they don’t have a place to live … it can stifle development.” Marvin Wanders, owner of Three Sixty Real Estate Solutions

La Crosse County will hold a sale next week to unload surplus office furniture left behind after the relocation of its administration center to the former Associated Bank building at 212 N. Sixth St. Dozens of desks, tables, chairs, filing cabinets, clocks and other items will be available for purchase Wednesday and free on Thursday and Friday. Sales are cash only and buyers are responsible for removing the items. County workers will not assist with lifting, loading or moving. “If you have workers coming to town and they don’t have a place to live … it can stifle development.” Marvin Wanders, owner of Three Sixty Real Estate Solutions.

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