Sprinkler Tragedy Changes Affordable Housing Subsidy
One RACM commissioner is to thank. But no easy solution for adding sprinklers to buildings.
Northwood Apartments. Photo by Jeramey Jannene.
With a tragic fire on her mind, Kathryn West started asking questions in May.
She’s now potentially prevented another tragedy.
However, the cost of doing so suggests that there is no quick fix to the issue of installing sprinklers in old buildings.
In May, the Redevelopment Authority of the City of Milwaukee commissioner wanted to know if an affordable housing subsidy she was being asked to approve was for a building that didn’t have sprinklers.
“Obviously, that’s an issue that’s particularly concerning given what’s happened in Milwaukee in the past couple of weeks,” she said. Five individuals died in an apartment fire, with officials stating that a sprinkler system would have saved lives.
KCG Development acquired the 72-unit Northwood Apartments, a 1970s complex, at 2520 N. Martin Luther King Jr. Dr., and was poised to receive a $1.27 million subsidy, effectively a property tax rebate, to aid a $14.5 million renovation effort.
KCG development analysis Brodie Wiener said he didn’t know if the building had sprinklers. Nor did the Department of City Development and RACM officials who presented the agreement.
West voted against the agreement, the lone no vote.
It turns out the building didn’t have sprinklers.
A Common Council review was paused, and DCD and RACM officials returned Thursday with a revised agreement.
“The deal looks very much the same,” said DCD project manager Lori Lutzka. But there is one key addition: an additional $400,000 subsidy to install sprinklers.
KCG will now receive $1.67 million, plus 5.75% interest, from a developer-financed tax incremental financing (TIF) agreement. The TIF agreement explicitly requires sprinklers to be installed.
The extra $400,000 will take an additional eight years to recover. The initial agreement allowed for up to 17 years for the $1.27 million to be recouped, but the new agreement allocates 25 years.
The complex was built in 1972. The city requires buildings constructed after 1973 and more than 60 feet tall to have sprinklers. Substantial alterations to structures also trigger a retroactive sprinkler requirement.
Rents in the redeveloped complex are to be capped at a level targeted at 30% of a household’s income and expected to range from $622 to $1,445 depending on unit size and household income.
The Northwood property is currently assessed for $233,900, but according to KCG, has little vacancy. The city routinely provides TIF subsidies to close financing gaps in creating or rehabiliating income-restricted affordable housing.
“Really appreciate you going back to this, looking at it, figuring out a way to get that sprinkler system,” said West. “It pained me frankly not to vote for approval to begin with because it really is an important improvement.”
“I think this is a wonderful resolution from where we started,” said RACM assistant executive director Dave Misky.
West motioned for adoption. Her fellow commissioners unanimously endorsed the motion.
If you think stories like this are important, become a member of Urban Milwaukee and help support real, independent journalism. Plus you get some cool added benefits.
