Jeramey Jannene

City Funds Will Boost Walker’s Point Development

Corner of 1st and National would see new affordable apartment building.

By - May 17th, 2024 09:55 am
Proposed development at 100 E. National Ave. Rendering presented by Bear Development to RACM board.

Proposed development at 100 E. National Ave. Rendering presented by Bear Development to RACM board.

A proposed affordable apartment building planned for a key Walker’s Point intersection would receive a $2 million boost from a new tax incremental financing (TIF) district.

The subsidy package aims to close a financing gap at a site that has long eluded real estate developers.

Kenosha-based Bear Development plans to construct a five-story, 140-unit apartment complex at the northeast corner of S. 1st Street and W. National Avenue.

The Department of City Development is proposing to provide $2.17 million via a developer-financed TIF district to the $54.6 million development. The structure, effectively a property tax rebate, would incrementally provide the funding plus 6% interest, over a period of no more than 19 years. Bear would receive the funding faster if the assessed value of its development yields larger property tax payments.

The 140 apartments would be a mix of one- and two-bedroom units. Subsidized rents would range from $507 to $1,753 per month, with rates varying depending on whether the household makes 30%, 50% or 80% of the area median income.

“We’ve been looking at this site for quite some time,” said Bear CEO S.R. Mills to the board of the Redevelopment Authority of the City of Milwaukee (RACM) on Thursday afternoon.

His firm is the second to consider an affordable housing development at the site publicly. Ohio-based Woda Cooper pursued a 90-unit, affordable apartment building at the site in 2019, but wasn’t successful in securing the low-income housing tax credits from the Wisconsin Housing and Economic Development Authority (WHEDA). The authority granted Bear tax credits in spring 2023 and the credits now form the key financing component of Bear’s proposal.

Mills called it a “challenging” property.

Part of that is because of the environmental contamination.

To address the issue, Bear is proposing to build its structure higher than a standard building. This would allow a vapor barrier mitigation system to be placed above the water table.

“We feel very confident, in conjunction with the [Wisconsin Department of Natural Resources]… that we know what we’re getting into,” said Mills.

A 112-space indoor parking structure at the base of the building would be ventilated. It would also create an additional gap between living space and any ground contamination. It’s a similar strategy Bear is using on its massive Filer & Stowell development to the south on the border of the Bay View and Harbor District neighborhoods.

The nonprofit that leads the latter neighborhood, Harbor District Inc., is expected to lease approximately 800 square feet of space in the new Walker’s Point building. Approximately 3,100 square feet of commercial space are planned.

Mills doesn’t anticipate any challenges leasing the apartments.

“The need far outpaces the supply right now,” said the developer of affordable, workforce housing.

He said the substantial transit access in the area would also be a draw. Three major bus routes, 15, 18 and Green, stop at the intersection.

Bear has developed WHEDA-supported housing across the state. It previously developed the 700 Lofts in Westown and is now constructing Michigan Streets Commons, the first Iron District building, across the street.

The city, as is now standard practice for affordable housing proposals, has provided similar TIF agreements for the Commons and Filer & Stowell developments.

Mills said the company has found success by using the credits at different income levels to ensure a mix of renters. Under the low-income housing tax credit program, up to 20% of the units can also be leased at market rates. The credits, often sold to institutional investors, provide dollar-for-dollar income tax reductions and up-front equity in exchange for leasing specific units at capped rates.

The National Avenue site has been owned by Kelly Construction & Design since 2013. Developer Tim Dixon transferred the land to the firm to settle a debt associated with the construction of The Iron Horse Hotel. Dixon, who developed the adjacent National Avenue Lofts, once envisioned developing the site himself. It formerly held a warehouse.

Because it is receiving more than $1 million in city financial support, Bear’s proposal is subject to city contracting requirements. Forty percent of the project’s work hours must be completed by unemployed or underemployed city residents through the Residents Preference Program. A quarter of the project’s contracts by value must go to qualifying Small Business Enterprises.

Because of the proposal’s location, on the edge of the Walker’s Point and Harbor District neighborhoods, it is also subject to the city’s anti-displacement policy. Twenty percent of units must be first offered to existing residents of the surrounding ZIP code.

The building, 100 E. National Ave., is expected to open to residents in 2026.

The RACM board unanimously endorsed the proposal. It is also subject to Common Council approval.


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