A Luxury Tower with Affordable Housing
Housing Authority to build 32-story, $150 million tower whose income would support affordable housing across city.
A new high rise is planned for Milwaukee, but it’s by an unusual developer – the Housing Authority of the City of Milwaukee.
The city-affiliated authority, through its development arm Travaux Inc., intends to build a 32-story, $150 million apartment tower on the parking lot and green space immediately south of its Convent Hill senior housing building at 455 E. Ogden Ave.
The proposal would include high-end market rate housing, as well as affordable units. The 315-unit building could include up to 25 percent affordable units according to sources. The plans are early in the planning phase, and the building could grow to 350 units.
Urban Milwaukee spoke with sources earlier this week that were optimistic about the building’s ability to generate revenue to support other affordable housing projects in the city. Two sources described the project as being designed to compete with Northwestern Mutual‘s high-end 7Seventy7 apartment tower.
Travaux, led by Scott Simon, presented the project to the board of the authority on Wednesday afternoon. He told the board the 1.4-acre site is assessed at $1.8 million.
HACM Executive Director Antonio M. Perez said the site’s value is indicative of the strong opportunity for integrated housing on the site. Of the decision to do the project itself, through its development, Perez said: “if we’re going to hire, why don’t we hire ourselves?” He said a similar arrangement at Westlawn has saved millions of dollars.
The office space could grow in the future. “Travaux is envisioning a future where people have fewer cars,” said project architect Jason Korb. Approximately 20,000 square feet of the parking garage is being designed with the capability to be easily converted to office space.
“We’re looking at financing options such as Fannie Mae and Freddie Mac to be the main financing source,” said Simon. The two entities are federally-owned for-profit enterprises.
The project could receive a large financing boost from the late 2017 federal tax code changes. It sits within a state-designated Opportunity Zone. The zones provide federal tax breaks and deferrals to investors, which the authority hopes will encourage outside investment in the project. The area, one of two adjoining Downtown, is bordered by the Milwaukee River., N. Jackson St. and E. Juneau Ave. Simon says it is a large driver for the project.
“The financial model could include condominiums to alleviate some of the cash flow needs,” said Simon. Units are envisioned to be a mix of one or two bedrooms. The exact financing method for the affordable housing component is still being finalized.
But one thing it won’t have: a poor door. Projects in coastal cities have been derided for separating their affordable units from market-rate units. “There will be no separate entrance and the units will be interspersed throughout the building,” said Simon.
“One of the things I really like about this project is it will really change the narrative on public housing in Milwaukee. What it is and who it is available to,” said judge and HACM board member Joe Donald. The board voted to support Travaux moving forward with the plan.
The project, in a perfect world, could break ground in spring 2020 said Simon. It will require a zoning variance from the Common Council. Korb said the development team hopes to secure that before the council’s August recess.
The proposal would help support Mayor Tom Barrett‘s 10,000 Affordable Homes initiative, as well as introduce more affordable housing into the downtown area as Alderman Robert Bauman has advocated. Both have been briefed on the proposal according to Simon.
The authority has used its Travaux arm, first formed in 2015, increasingly in recent years to solicit federal low-income housing tax credits to redevelop portions of Westlawn Gardens and other HACM properties.
The current building at the site was built in 2010, replacing an earlier building that dated back to 1960. The name of the project is a reference to the site’s former use as a convent. The convent was demolished in 1959.
The bells from the convent still remain on the site. “One idea we’re kicking around right now is to create an exhibit for the bells that are currently on the site,” said Korb.
The proposal is one of many housing high rises planned for the downtown. Korb is leading the design of New Land Enterprises’ Ascent proposal for N. Van Buren St. The Couture is proposed for a site near the lakefront. The Mandel Group has proposed Portfolio for a site at the east end of E. Ogden Ave.
The building, like any other development including market-rate housing, will be required to pay property taxes.
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