Gorman Near Construction Start On Vliet Street Project

Marcia P. Coggs Human Services Center, 1220 W. Vliet St. Photo by Jeramey Jannene.

Gorman & Co. is close to finalizing a sale and redevelopment agreement with Milwaukee County for the former human services building at 1220 W. Vliet St.

Gorman plans to redevelop the building, formerly the county’s Marcia P. Coggs Human Services Center, into 66 affordable housing units with commercial space and a county-run Behavioral Health Services clinic on the first floor.

Construction is estimated to take 18 months. If the deal is closed in December, the new building could be open by July 2027, Ted Matkom, Gorman’s Wisconsin market president told Urban Milwaukee Friday.

Gorman has filled out its financing stack for the $32.3 million project with financing from Wisconsin Housing and Economic Development Authority (WHEDA), the Federal Home Loan Bank of Chicago, the City of Milwaukee and funding from the county. The development also relies on low income housing ($13.9 million) and historic preservation ($7.2 million) tax credits. The last piece, Matkom said, is finding a buyer for the low-income housing tax credits.

Tax credits are awarded to developers in exchange for setting aside specific units at federally regulated, below-market rates. The credits are often sold at a slightly lower rate on the market to investors seeking to reduce their tax burden. They are a critical financing tool for developers taking on difficult historic redevelopments or financing the construction of below-market-rate housing. Unfortunately, the current market for tax credits is proving challenging with demand dropping amid rising economic uncertainty, Matkom said.

“I think there is an uncertainty in the market about the direction of the economy,” he said. “Tax credits are very, very hot when people are making a lot of money and they have a lot of tax liability.”

If investors think growth is slowing, and their incomes are slowing with it, they have less need to reduce their tax liability.

Previously released plans for the Coggs building include one and three-bedroom apartments ranging from 740 square feet to 1,740 square feet. The apartments will rent at rates between $823 and $1,576 a month to keep within the definition of affordable housing set by the U.S. Department of Housing and Urban Development.

The building was constructed in the early 20th century and originally used as a Schuster’s department store. The county bought the building in the 1960s, turning it into the county welfare office. In 2003, it was named for Marcia P. Coggs, the first African American woman elected to the Wisconsin State Legislature.

A 2021 assessment of the Coggs building concluded the county should sell the building, as maintenance costs mounted and the building’s largest tenant, the Wisconsin Department of Health Services, planned to leave. The state office, which provided access to services like FoodShare, moved to a new location on the city’s Northwest Side in 2022.

If the Gorman project moves forward, it will add to the county’s housing investments in the surrounding neighborhoods. The county used federal American Rescue Plan Act (ARPA) funding to support the development of 120 new homes for first-time homebuyers by Milwaukee Habitat for Humanity and Emem Group.

Habitat is building 80 single-family homes in the King Park neighborhood near the county’s new Coggs Human Services Building at 1230 W. Cherry St., opened in June and serves as a replacement for the building Gorman plans to redevelop. The Emem Group is developing 20 duplexes in the city’s Midtown Neighborhood.

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