A Sherman Park Success Story

Standing in front of a home just two-and-a-half blocks from where a 2016 civil disturbance occurred following a Milwaukee Police Department shooting, Mayor Tom Barrett celebrated the successful completion of a program targeted at creating jobs and rehabbing city-owned homes.

“I have always had confidence Sherman Park would rebound from the challenge,” said Barrett. “And I can say today is Sherman Park is stronger than it was three years ago.”

The program, known as the Milwaukee Employment/Renovation Initiative (MERI), resulted in six developers completing 104 home renovations in the area while leveraging 33,000 hours of labor from underemployed or unemployed city residents as part of the Residents Preference Program (RPP) or other job-training programs.

MERI resulted in a net investment of $7.9 million in the neighborhood according to a city report. That includes $1 million provided to the city by the Wisconsin Department of Financial Institutions (DFI). The state allocated the funds from its settlement proceeds from the Volkswagen emissions scandal.

“As a Milwaukee native, my grandparents lived three blocks from here; it means so much to see this project come to completion and exceed the goals by renovating more than 100 houses and generate jobs for Milwaukee residents right here in Sherman Park,” said DFI secretary designee Kathy Blumenfeld.

The city used the state’s $1 million to provide up to $10,000 per home as a grant to developers that used 500 hours of qualified RPP labor on the rehabilitation. RPP participants are required to be paid a city-set Living Wage of just under $11 per hour. Developers paid just $1 per home for the homes they then renovated.

Barrett’s press conference was held in front of a four-bedroom home at 3011 N. Sherman Blvd. renovated by Carl Quindel‘s rent-to-own company Strong Blocks. “We’re not on every block in the city, we’re on very specific ones and it happens to align really well with the city’s portfolio over the past five years and this program in particular,” said Quindel. The city, a property owner of last resort, has had a revolving portfolio of approximately 1,000 properties, often heavily damaged ones, which it has acquired via property-tax foreclosure since the 2008 Great Recession. MERI, created in early 2017, targeted city-owned properties in the “Greater Sherman Park” area bounded by W. Capitol Dr., W. Lloyd St., N. 20th St. and N. 60th St.

Contracting on the featured home was led by Dynamic Contractors. Firm president Marcus Weddle told Urban Milwaukee it was the biggest project his firm had undertaken. StrongBlocks, which Quindel estimated had invested approximately $90,000 in the home touted by Barrett at the press conference, will list the home for sale to an owner-occupant later this week.

Quindel, who previously led non-profit ACTS Housing, led the renovation of 33 homes as part of the project. Twenty-four of those homes now have residents participating in StrongBlocks’ 21-month rent-to-own program. Quindel said one home has been sold directly to an owner-occupant and another was sold last week to a family that completed the rent-to-own program.

The city, through a bidding process, selected Strong Blocks, Advance Construction, Revive MKE, Jason Scott Realty, Gorman & Co. and Ezekiel Community Development Corp. to participate in the program. Gorman was able to secure low-income housing tax credits from the state to support its renovations and will lease its 38 homes at below-market rates to residents earning less than the area’s median income. The remaining developers are selling their homes to owner occupants.

A report on the program, scheduled to be presented to the Common Council’s Community and Economic Development Committee on Wednesday, notes that 81 of the renovations were completed within the city-defined “Greater Sherman Park” area while 23 were outside of the boundary, with a note that states most were “between Capitol and Silver Spring Dr.”

The state allocated an additional $1 million from the Volkswagen settlement towards demolition in Sherman Park.

What’s Next?

Barrett said the city is going to explore ways to continue the program in other areas.

“We are going to continue to seek out more partnerships,” said Barrett. “This has been successful because we have had help from the state and it provides opportunities for workers from these neighborhoods to benefit.”

A Department of City Development (DCD) report outlines the ways in which the city will seek to improve the program as part of what it is calling “MERI 2.0.” A major change will be the separation of the $10,000 grant into differing subsidies for workforce development and development costs, with the latter reflecting the scope of work needed to repair the home and the property market.

The city will seek to assign developers to clusters, given the developer a 24-month right of first refusal on city-owned homes that potential homeowners have declined to buy directly. The program will also include a “set aside” for emerging developers with a goal of capacity building and wealth creation for graduates of the Associates of Commercial Real Estate program designed to train minorities in real estate.

The DCD reports said the city anticipates issuing a request for proposals on MERI 2.0 in August. It would leverage approximately $700,000 from the city’s STRONG Neighborhood program with the intent to return to the Common Council in 2020 for more funding.

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Related Legislation: File 190521