Deal On Affordable Housing Adds Bay View, Edison School Projects

Avoiding political gridlock, the Milwaukee Common Council unanimously approved an amended agreement Tuesday that will allocate all $10.7 million from its Housing Trust Fund to advance 14 affordable housing projects. That includes two newly included proposals, the redevelopment of the Edison Middle School and the proposed redevelopment of the Filer & Stowell factory complex in Bay View.

“Today is a really special day,” said Alderman Michael Murphy, who led the creation of the fund 17 years ago. The fund is intended to plug financing gaps in affordable housing projects and often has only $1 million to award. “These $10.7 million will leverage nearly $140 million in construction work.”

Last week, Murphy’s colleagues on the Zoning, Neighborhoods & Development Committee voted to hold the allocations because of concerns over what wasn’t included, notably southside projects and projects the Department of City Development was recommending funding. A citizen-led technical review committee recommends what projects the trust fund should fund.

Council members Robert Bauman and JoCasta Zamarripa worked to allocate a record $10 million to the fund in 2021 as part of the city’s $394.2 million American Rescue Plan Act grant, only to see a record number of projects need funding because inflation was driving up costs. Bauman, last week, said that the review committee’s recommendations didn’t appear to consider projects that were “shovel ready.” Zamarripa said the South Side was being shortchanged.

A compromise was adopted Tuesday that addresses their concerns by exhausting the unspent money in the fund. In addition to the $8.83 million in review committee recommendations, the council adopted a proposal that funds two additional projects.

The council amendment allocates $965,000 to Gorman & Company’s proposal to redevelop the vacant Edison Middle School, 5372 N. 37th St., into 75 affordable apartments. Developer Ted Matkom told the zoning committee last week that the Old North Milwaukee neighborhood project would break ground within a month if funded, but faced an uncertain future without the funding. DCD had already advanced a tax incremental financing (TIF) district subsidy for the project that was based on receiving the trust fund grant. The council previously granted an extension on the development team’s purchase option so that additional funding could be secured. The project was first introduced in 2020 as a $20 million proposal, but has seen its costs grow to $27.5 million according to a TIF report. To partially close that gap, Gorman secured funding in recent months from the Milwaukee Continuum of Care in exchange for reserving 15 units for homeless individuals as part of the Housing First strategy. Lutheran Social Services will provide supportive services at the complex.

The second project isn’t shovel-ready, but its funding addresses the geographic question. The trust fund will provide $835,000 to Bear Development‘s proposal to redevelop the former Filer & Stowell complex, 147 E. Becher St., into 592 apartments. The mixed-income complex would be the largest private affordable housing development in city history, but Bear has struggled to find financing after first proposing the development in 2020. The developer failed to secure low-income housing tax credits in 2021 for what was then an approximately 300-unit development. Area Alderwoman Marina Dimitrijevic, who helped broker the council compromise, said the new allocation would help fund the project and Bear would be able to secure other funding sources, including historic preservation tax credits and a TIF district. The project landed $1.8 million from the Federal Home Loan Bank of Chicago in late 2021.

Both Bear and Gorman applied for the trust fund grants, but weren’t scored as highly as other proposals. Murphy said the technical review committee would have likely granted money to the Edison project if the supportive housing component was included in the original application. Matkom said last week that the component wasn’t finalized until after the application was submitted this summer. Dimitrijevic said the supportive housing component was a key driver for its inclusion in the compromise proposal. The Bay View proposal, located on the edge of the Harbor District, was the lone southside application to the trust fund.

Murphy said the allocations would help create housing for those living in tents in places such as MacArthur Square as well as provide affordable housing for the “working poor” that are one paycheck away from homelessness. “If it wasn’t for the Housing Trust Fund, we would probably see an increase in homelessness in our city,” said Murphy.

The other 12 projects cover a wide variety of housing strategies.

One of the projects, a seven-unit rehabilitation by Wisconsin Community Services of 5008-5014 W. Center St., is targeted explicitly at individuals experiencing homelessness.

Five of the projects receiving funding are affordable apartment buildings. Two of the projects, the Martin Luther King Library redevelopment (93 units, $1.5 million) and the Riverwest Workforce Apartments and Food Accelerator (91 units, $1 million), are partnerships between General Capital Group and minority-led development firms (Emem Group and KG Development). Another, EIGHTEEN87 on Water (79 units, $783,765), is already under construction from Rule Enterprises, but still has a financing gap. KG’s Jewish Home proposal (40 units, $500,000) is a new proposal. The final apartment building (54 units, $500,000), planned for a city-owned site at N. 6th St. and W. North Ave., was approved earlier this year following a competitive, request-for-proposals process won by FIT Investment Group and Cinnaire Solutions. The latter two projects would still need to secure state-awarded low-income housing tax credits to advance.

Acts Housing will receive $1.25 million for its $10 million acquisition fund, created in partnership with the Community Development Alliance. The new effort is designed to purchase and rehabilitate approximately 100 homes per year, reselling them to lower-income owner-occupants and preventing predatory landlords from acquiring large portfolios.

Milwaukee Habitat for Humanity will receive $1.25 million for scattered site housing development. Revitalize Milwaukee will receive $1.25 million for scattered site housing repair.

Three other allocations are targeted at programs around housing, including homebuyer counseling and small repair projects.

“It’s the first time we’ve had some supportive services included in the recommendations. Generally, it’s been all brick and mortar,” said Community Development Grants Administration associate director Mario Higgins, the fund’s administrator, when the review committee presented its recommendations on Nov. 30.

IndependenceFirst and the United Community Center would each receive $100,000. The Social Development Foundation would receive $350,000.

A total of 27 applications were submitted to the trust fund. Two projects that didn’t get funding now have notable financial gaps to close.

The $16.4 million budget for the Five Points Lofts, proposed for a vacant site on the 3300 block of N. Martin Luther King Jr. Dr. by KG Development and the Martin Luther King Economic Development Corporation, included $1.4 million from the trust fund, but those funds weren’t allocated. The development team did receive council approval Tuesday for a $737,000 TIF grant, but now must find a new funding source to close the remaining gap. The proposal calls for 46 affordable apartments and nine market-rate apartments.

The Concordia 27 development, which is already under construction at N. 27th St. and W. Wells St., failed to secure $2.5 million from the fund. Bauman previously said the development team, a partnership of Near West Side Partners (NWSP) and Rick Wiegand, may need to pause construction without the funding. The mixed-use development includes 30 affordable housing units. NWSP is backed by a number of large institutions, including Advocate Aurora Health, Harley-Davidson, Marquette University, Molson Coors and the Potawatomi Business Development Corporation. The State of Wisconsin previously allocated $5 million from its American Rescue Plan Act allocation to the project.

Filer & Stowell October 2020 Tour Photos

Filer & Stowell September 2020 Photos