Iron District Apartments Subsidy Gets First Approval

A subsidy for the proposed Michigan Street Commons apartment complex received its first endorsement Thursday.

The board of the Redevelopment Authority of the City of Milwaukee unanimously endorsed creating a tax incremental financing (TIF) district to support the building’s development. The five-story, 99-unit building would be located on a largely vacant site at W. Michigan St. and N. 9th St., in the southwest corner of Downtown.

The Department of City Development is recommending a $1.8 million subsidy, effectively a property tax rebate, to close a financing gap in Bear Development‘s proposed affordable housing development.

Bear, using a variety of financing sources, would develop the building and then the city would rebate the increased property tax revenue generated by the development for a period of up to 19 years or until $1.8 million, and up to 5.75% interest, is returned. The strategy, increasingly used by the city to advance affordable housing efforts, places the risk on the developer.

The project would be immediately west of the proposed Iron District development, which would include a hotel, concert venue and soccer stadium, but could move forward without it.

“The project is independent of the other uses on the site,” said Bear project manager Nick Orthmann. “Stand-alone project on its own, separate from the other uses.” The firm hopes to begin construction this fall.

The primary funding source would be $11 million in low-income housing tax credits. Bear secured the credits in spring 2021. For a period of 30 years, all of the apartments in the $27.5 million development would be set aside at below-market rates for households making no more than 60% of Milwaukee County’s median income. Twenty-nine of the units will have a max income of 50% of the area median income.

“I think it’s a really exciting project for the city of Milwaukee,” said RACM commissioner Bill Schwartz. He said the developer could have pursued student or market-rate housing, but instead was providing housing for what would likely be service industry workers.

Orthmann said Kenosha-based Bear has developed approximately 3,000 units of workforce housing. The primary funding source for those projects is federal low-income housing tax credits, which are competitively awarded locally by the Wisconsin Housing and Economic Development Authority.

Bear completed the 49-unit 700 Lofts development in 2015 at 700 W. Michigan St., just across the street from the Iron District site.

Firm CEO S.R. Mills said there are slightly more parking spaces than apartments in the 700 Lofts building and there are vacancies. Future residents of Michigan Street Commons could elect to lease space in that building if the new building’s garage fills up. Other parking in the new building would be provided underground.

Mills said there won’t be an issue leasing apartments in the building. “We run 95 to 100% occupancy,” he said of what the firm calls workforce housing. “The need far exceeds the supply.”

Orthmann said the firm continues to refine the design in response to feedback from the city.

Mills told the RACM board that the artificial turf soccer field in the stadium would be open to residents.

Commissioners asked why the building was to be situated against the Marquette Interchange and how the complex came to be laid out that way.

“When we had it all laid out, it just worked at the end of the day,” said Mills. “We think the way the offramp is there it is not too obtrusive to the residents living there in the building.”

Milwaukee Area Service and Hospitality Workers Organization (MASH) leader Peter Rickman spoke in favor of the affordable housing component, but questioned the larger Iron District plan.

“What’s good for the Deer District ought to be good for the Iron District,” said Rickman of a labor agreement for service workers.

The rest of the Iron District, however, is not part of the TIF district. Urban Milwaukee previously reported that it may require a separate subsidy.

The TIF district requires the apartment building to start construction by September and be substantially completed by March 2024.

The apartment complex would be built on a two-parcel, 33,832-square-foot site. It’s part of a swath of land assembled in the past decade by Marquette University for a largely-canceled athletic research facility.

The TIF district requires Common Council approval.

Site Photos

Rendering and Site Plan

Iron District Renderings