December Groundbreaking Planned For Long-Awaited Apartment Development
City loaning $700,000 to Five Points Lofts project for environmental cleanup.
Construction on a now long-awaited apartment building is expected to begin next month.
Five Points Lofts, a 55-unit building proposed for a site at the northern end of N. Martin Luther King Jr. Drive, could be under construction by the end of the year. Forty-six of the units would be rented at below-market rates to qualifying households.
On Thursday, developer Anthony Kazee told the Redevelopment Authority of the City of Milwaukee that his company, KG Development, hopes to close on the five-story development’s financing just after Thanksgiving.
“We are looking at a December 1 closing,” said Kazee of the $16.4 million financing package.
The project was first proposed in 2020 for a city-owned site, but was delayed alongside several other affordable housing proposals because of rising construction costs and interest rates.
Kazee, who is partnering on the project with the Martin Luther King Economic Development Corporation, said development costs spiked from $13 million to $19 million. But the partners have since reduced the cost of the proejct.
“A lot of value engineering. A lot of reduced development fees,” said Kazee in detailing the strategy.
The proposal has also picked up some additional public support. The core of the project’s financing is $7.2 million in competitively-awarded low-income housing tax credits from the Wisconsin Housing and Economic Development Authority. The credits are sold to institutional investors and the development team must lease specific units at rates targeted at 30% of a household’s income to qualifying individuals.
To account for rising costs, Governor Tony Evers allocated $2 million from the state’s American Rescue Plan Act grant in 2022 as part of a larger allocation to back affordable housing. Later last year, the Common Council approved a $737,000 tax incremental financing district that effectively serves as a property tax rebate.
On Thursday, the RACM board agreed to issue a $700,000 brownfield cleanup loan. The development team will have 19 years to pay back the loan at 3% interest, with a balloon payment for the principal at the end of the term. The loan is to be secured by a mortgage on the property.
“I want to say thank you to the Redevelopment Authority for allowing this project to move forward,” said Kazee.
The 1.13-acre site includes five parcels: 3317-3329, 3333-3335, 3341 3345-3349 N. Martin Luther King Jr. Dr. and 456 W. Concordia Ave. The Concordia Avenue property would be used as a driveway. All of the parcels are vacant today.
A paint store, with a known spill, and a repair shop for pianos and refrigerators once occupied the site. Kerosene was stored on portions of the site in drums.
The environmental cleanup is expected to be less complicated than other high-profile projects that have recently encountered issues with improper or incomplete implementation of mitigation measures.
“No [volatile organic compound]’s at this site,” said RACM senior environmental project engineer Tory Kress. “Not the volatile issues we have seen at other sites recently.”
The Wisconsin Department of Natural Resources has already approved a reconciliation action plan to mitigate the known contamination.
“This site is pretty far along in the environmental process and pretty much read to go,” said Kress of the abatement project.
Rendering and Site Map
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