Graham Kilmer

Delayed Avenir Project Planned for April

64-unit apartment development on Lower East Side was delayed a year by COVID-19.

By - Mar 15th, 2021 05:30 pm
Avenir phase two and three rendering. Rendering by AG Architecture.

Avenir phase two and three rendering. Rendering by AG Architecture.

Construction on the second phase of the Avenir apartment complex at 418 E. Ogden Ave., originally scheduled to begin in Spring 2020, is planned for April, but it could also be delayed another year.

The project is a 64-unit apartment building constituting the second phase of a larger three-building apartment complex surrounding a central parking garage. It’s being developed by Weidner Apartment Homes after changing hands several times during the past two decades. The parcel is bounded by E. Lyon St., N. Jefferson St., E. Ogden Ave. and N. Milwaukee St.

Weidner is a national apartment building operator and developer based in Kirkland, Washington. It already owns eight properties totaling 1,300 units in Milwaukee. AG Architecture, which designed the first phase, is also serving as the project architect for this second building.

Once completed, it will mostly be one-bedroom apartments, with 11 studios and 11 two-bedroom units. The 91,660-square-foot-building also has 4,897 square feet of retail space planned.

The project is on land called Block 26 in the Park East Corridor. It was freed up in 2003 following the demolition of the Park East Freeway spur. The land beneath the freeway was owned by Milwaukee County, which then set out to find a developer for it.

Weidner recently went before the County Board’s Economic and Community Development Committee requesting an extension in the timeline set in the 2018 development agreement it has with the county. Now it will have until April 2022 to start construction. If it doesn’t, the company could forfeit up to $450,000.

The first phase of the Avenir was a 104-unit building completed in 2014. This development had an assessed value of $18.5 million in 2018, according to the report from the Milwaukee County Economic Development Division. The estimated development cost for the subsequent phases is $26 million.

The first phase was developed by Wangard Partners, which had plans to develop the subsequent phases. But development stalled and Wangard had to pay the county $100,000 for failing to finish the subsequent phases, per their development agreement.

In 2018, Weidner Apartment Homes, through their investment arm, stepped in to finish development, acquiring the site for $22.7 million. When the county initially sold the land by itself to Chicago based RSC & Associates in 2007 it went for $2.7 million, according to the economic development division.

Weidner originally planned to start construction in April 2020, applying for a building permit in February, but exercised a one-time delay allowed for in the development agreement and pushed commencement of construction back to October. Then in fall 2020, the company filed a notice of Force Majeure — or unforeseen consequences — due to the COVID-19 pandemic that prevented it from starting construction.

The company had provided the county with a $250,000 letter of credit when it entered into the development agreement more than two years ago. As part of this extension the company is providing an additional $200,000 letter of credit the county can draw from if it fails to meet the development timeline.

Under the new agreement, Weidner plans to start construction in April. If it doesn’t it has pledged a $100,000 credit for a six month extension to October, along with another $100,000 for a potential second extension to April 2022.

If the developer fails to meet the timeline the county can claim the balance of credit laid out by Weidner in the event of defaults. It can also draw $1,400 a day for as long as Weidner is in default of the contract up to the balance of credit extended.

Kevin Colard, chief investment officer for Weidner told the committee, “We believe that the timeline that we’ve laid out is something we’re fully committed to.”

While the past year has been tough, Colard said “things are strengthening,” and he pointed to the company nearly doubling the credit it has extended to the county as proof of a commitment to developing the project.

Avenir

Categories: Real Estate, Weekly

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