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Recreational Concepts

Recreational Concepts Inc. is seeking tax increment financing to help move from a collection of three buildings to a new 12,000-square-foot showroom, office and warehouse off Highway 14 in Oregon. The business's storefront is currently at 121 N. Main St. in Oregon.

An Oregon installer of pools and spas is asking the village to help finance its relocation and expansion.

Jeff Kjelland, owner of Recreational Concepts Inc., met with the Village Board on Monday to discuss whether the village would be willing to provide tax increment financing (TIF) for a possible relocation of his business.

The company’s current storefront is at 121 N. Main St. in downtown Oregon, but Kjelland rents two other buildings to support all of the business’s functions.

Kjelland could not be reached for comment Thursday, but in a letter to the village said one of the buildings would be sold in the near future and that the company’s warehouse would be demolished next year.

Recreational Concepts has been in Oregon for 14 years and Kjelland plans to keep it in the village. He purchased a lot at 1075 Park St., just off Highway 14 on the village’s east side, where he wants to build a 12,000-square-foot building that would include a showroom, offices and a warehouse.

Village administrator Mike Gracz said Monday’s meeting was preliminary and that no specific dollar amount for the TIF was discussed, but he said Village Board members appeared generally supportive of the proposition.

“They all made strong statements that they wanted to see that the company, Recreational Concepts, remains in the village,” Gracz said.

In a report, village planning consultant Mike Slavney, of Vandewalle & Associates, said the proposal would redevelop an underutilized property and that the business would benefit from highway exposure. The proposal meets basic zoning standards as it stands, but Slavney recommended a handful of changes to improve the project.

Grasz said the company is seeking TIF to offset increased construction costs from poor soil conditions at the site.

A financing gap analysis will be done once a formal TIF request is submitted. Other aspects of the proposal will be considered before the village’s Plan Commission on May 5.

Hotel TIF deal close

Oregon officials also are considering $561,256 in TIF to develop a hotel slightly north of the proposed site for Recreational Concepts.

S&L Hospitality, of Verona, in October submitted a proposal to build a 75-room Sleep Inn at the corner of Janesville and Park streets, and it sought $1 million in TIF to support the project.

In January, S&L owner Eric Lund downsized his proposal to 52 rooms and scaled back the TIF request. After meeting with a national franchise representative for Choice Hotels he decided the likelihood of securing franchise rights for a 52-room hotel would be higher in Oregon’s unproven hotel market.

A 2012 market study identified Oregon as a potentially strong location because its population grew by more than 20 percent between 2000 and 2010. But it noted that the village is a tertiary market in Dane County, neighboring other competitive markets like Fitchburg, Verona and Monona.

The study estimated that a 70-room hotel could reach an average occupancy level of 69 percent by its fifth year in operation and generate $130,000 in room taxes for the village annually.

Gracz said Lund and the Village Board have agreed on the $561,256 amount, but a deal has been delayed by complications related to timing of the grant.

The village would need to borrow to pay the grant, and it would need to pay interest on the borrowing until the project begins generating tax increment. Staff estimate the TIF plus interest would cost the village $640,000.

Gracz believes a development agreement for the hotel could be in place by the May 16 Village Board meeting.

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