The Bookends Project Held Pending Comptroller Input

New Land Enterprises and Wiechman Enterprises were seeking a change in zoning and a loan guarantee by the City of Milwaukee for the Bookends North project.  The project would be located at 700 E. Kilbourn Ave., the former Edwardo’s Pizza location, and includes 224 luxury apartments, 294 parking spots, and 3,000 square feet of retail space.  Tim Gohkman, of New Land Enterprises, explained that this would be the highest quality new apartment building in Milwaukee.

Rocky Marcoux, the Commissioner of the Department of City Development, explained that the benefits of getting involved in the project, included adding new units to the neighborhood, an increase to the tax base, and job creation.  He stated that the “department finds itself recommending something, that we wouldn’t normally be recommending,” again indicating that the City of Milwaukee wouldn’t normally become involved in financing of residential deals, but that the current economic condition suggests some limiting financing might be necessary, and that market research indicates that 600 additional high-end rental units can be absorbed by the market.

Tim Gokhman spoke regarding the occupancy rates of a variety of different apartment quality levels.  Specifically he cited the Jefferson Block Apartments in the Third Ward stating that those are over 90% occupied and another of their comparable projects, City Green, is over 90% occupied as well.  He added that “rarely do you see a high-rise apartment complex built in the city,” and because of the reduced construction costs due to the downturn in the economy this is a rare opportunity to get a project like this built.

The total project cost of $60.2 million would be financed with a HUD guaranteed AFL-CIO pension fund backed loan of $51.7 million that would be serviced by Love Funding, equity investment, and a secondary loan that would require the City of Milwaukee loan guarantee of $3.45 million to be viable.  If the loan guarantee was to be approved New Land Enterprises intends to break ground in January or February, and would expect construction to take 17 to 18 months.

The Zoning, Neighborhoods & Development Committee moved to hold the file to allow for the comptroller to conduct a proper analysis of the potential risk before making a decision.