Royal Capital Celebrates Start of 53206 Housing Development
See inside former school as redevelopment work starts.
Kevin Newell couldn’t stop the tears from flowing.
He kept pausing, trying to get the words out while one of his children called out to him, “Daddy!”
“I get to tell the folks I am back anyway,” he said Thursday morning.
Regrettably, his old principal isn’t there to see him. Milwaukee Public Schools closed the school in 2005.
Newell’s firm, Royal Capital Group, is redeveloping the building into apartments known as The Wheatley.
“Our purpose is not just to build and rebuild a school, but to rejuvenate a community,” said area Alderman Russell W. Stamper, II, one of many speakers to laud Newell’s commitment.
“They know this area, they’re from this area and, most importantly, they have love for this area,” said Stamper of Newell and Royal Capital development manager Terrell J. Walter.
The building is located in the city’s 53206 ZIP code, infamously known for having the highest incarceration rate in the nation. It is one of the city’s most impoverished ZIP codes.
“Strong neighborhoods are important,” said Mayor Tom Barrett. “They are important for families. They are important to the city. They are important to the tax base.”
The 84,000-square-foot complex was constructed in 1902 with additions completed in the 1960s and 1970s.
Royal Capital will redevelop the four-story building into 42 units of affordable housing and construct a new building on the southern portion of the 3.8-acre site that contains an additional 40 units. The units would have a mix of one, two and three-bedroom layouts.
Fifteen of the units would be rented at market rates, with the remainder set aside at reduced rates for those making no more than 60 percent of the area’s median income. The majority of the financing for the $22 million project comes from low-income housing tax credits competitively allocated by the Wisconsin Housing and Economic Development Authority (WHEDA).
WHEDA Executive Director Joaquín Altoro said the credits are about more than building buildings, they’re also creating a pipeline of developers of color.
“This building is amazing, but we have to have an amazing commitment to our developers of color,” said Altoro. “Black excellence is not Kevin Newell, it’s an ecosystem that supports Kevin Newell.”
The redevelopment was first proposed in 2018 and the city approved a $1.05 million tax incremental financing (TIF) district in 2019 to close a financing gap in the project. The TIF district is developer financed, with Royal Capital putting up the initial capital and then being rebated the funds, up to $1.05 million plus interest, via property tax payments. The structure puts the risk for repayment on the developer.
“The past year has been one of the most difficult markets I have to get a deal underwritten and closed,” said Richard Coomber of Hunt Capital, the firm that provided the deal’s equity by selling the credits. Kramer noted that the firm backed Royal Capital’s Good Hope Library project and hopes to do more with the firm.
“I am 100% committed to ensuring this community, our community, benefits from the inside out,” said Newell.
Rents are expected to range from $370 to $1,125 per month, with many classrooms directly converting to an apartment unit.
The additions to the building afford space for a larger than usual slate of amenities.
Walter told Urban Milwaukee the firm is planning a cafe operated by a third party, a shared commercial kitchen, resident fitness center and community room.
The firm paid $465,000 for the property.
Royal Capital celebrated the completion of the long-delayed Good Hope Library project last year. The firm developed an affordable housing complex, Fortitude Apartments, above the new, first-floor library. Its market-rate Five Fifty Ultra Lofts development also opened across from Fiserv Forum.
The firm’s biggest project to date, the $84.5 million ThriveOn King development in the former Schuster’s department store, is ramping up.
Who was Phillis Wheatley?
Phillis Wheatley, who lived from 1753 to 1784, was the first African American woman to publish a book of poetry and the first to make a living from writing. She was emancipated from slavery in 1773 after the publication of her book.
Barrett mentioned researching her on the way over, Stamper added he recently learned about her as well.
“She really, really was a groundbreaker,” said Barrett. “So it is fitting that we are doing a groundbreaking.”