Bay View Affordable Housing Proposal Faces Uncertain Future

Austin Commons. Rendering by Eppstien Uhen Architects.

A proposal to develop 100 affordable apartments in Bay View faces an uncertain future and a critical timeline over the next two months.

Austin Commons would be a five-story, 100-unit development. Located just south of E. Lincoln Avenue on S. Austin Street, the complex would have a mix of one-, two- and three-bedroom units and be reserved for households making between 30% and 80% of the area median income.

It is being developed by a partnership of Northernstar Companies, a Milwaukee firm led by Brandon Methu, and Madison-based The Commonwealth Companies.

The $33.4 million project is to be primarily funded by a previously approved award of low-income housing tax credits, which, according to Northernstar, have a July 31 deadline to start construction.

But a proposed $2.1 million city subsidy has been delayed by area Alderwoman Marina Dimitrijevic, potentially imperiling the development.

Dimitrijevic, in an interview with Urban Milwaukee, said she is being “open-minded” and “trying to get to yes,” but she still does not support the project at this time.

“I cannot ignore what really has been some pretty strong, consistent neighborhood questions and concerns,” said the alderwoman.

Dimitrijevic has held two community meetings, with a third planned; the Redevelopment Authority of the City of Milwaukee (RACM) has held a hearing on the financing plan, and the Board of Zoning Appeals has held a hearing on a two-foot setback variance.

She said she was “surprised” by the July 31 deadline and wished there had been more community input earlier in the process. Dimitrijevic noted she has been an advocate for affordable housing, including supporting the nearly complete, 576-unit The Corliss development. “We’re literally home to the largest affordable development in the state of Wisconsin, which I’m very proud of,” she said.

But the alderwoman adds that a balance needs to be reached to address neighbors’ concerns about Austin Commons.  According to testimony at meetings and written comments submitted to the city, neighbors are primarily concerned with alleged parking and traffic issues.

The issue is slated to come to a head, although it’s not clear exactly when. The proposal is expected to be reviewed by the Common Council before the July 31 deadline. But its passage is far from certain. The funding resolution was introduced to the full council this week without Dimitrijevic’s name as the sponsor.

The development also faces a $750,000 financing gap, according to Dimitrijevic, which will need to be overcome by other sources, including a second possible city subsidy.

Parking at issue

Austin Commons would include 100 interior parking spaces, but several nearby neighbors don’t believe it’s enough.

The development team plans to lease spaces for $100 per month and lower prices if the spaces aren’t used.

“We believe we have more than enough adequate parking,” said Methu on April 16 to the RACM board.

But at least one neighboring business owner isn’t sold.

“Odds are these low-income residents will not buy a parking spot,” said Anders Meyer, co-owner of J.B. Meyer & Sons, 2339 S. Austin St., to the RACM board on April 16. “Parking on the street is always an issue.”

After a community meeting, Dimitrijevic worked with the Department of Public Works to create an additional 100 parking spaces by changing the policy on nearby streets from alternate-side parking to all-day parking on both sides of the street.

Austin Street would also be repaved as part of the development. “It’s one of the worst in my district,” said Dimitrijevic of the street’s condition.

But Dimitrijevic said neighbors are also concerned about the traffic patterns from the new Corliss development, which is not yet complete and is three blocks west, and the Austin Commons development. A third-party traffic study determined there would not be congestion issues, but Dimitrijevic expressed concern that it did not include Corliss traffic.

“This is a tough one that I don’t think I’m going to be able to personally solve,” she said of the congestion concerns.

The street used to have more traffic. The development would replace three homes formerly owned by Klement’s Sausage and is across from the now-vacant sausage factory. But Dimitrijevic said the sausage plant brought a different type of traffic pattern.

A Department of Public Works evaluation did not raise concerns about congestion.

Developer seeks more funding

Methu, according to Dimitrijevic, is pursuing an additional $750,000 to close a remaining funding gap on the proposal.

A resolution is expected to be introduced soon, said the alderwoman, from the city’s Community Development Grants Administration to reallocate a portion of the city’s allocation of federal HOME funds to support the Austin Commons development and three others.

But the alderwoman said she wasn’t sure how much would be proposed.

“Our project is progressing well, and we now have full design documents and construction bids in hand. As you know, costs often remain somewhat fluid as projects move toward closing. We will remain on track to close on July 31, provided the resources we have requested from the city are allocated,” said Methu via email.

Zoning not an issue

The development itself does not need design approval. The site is already zoned RM6, which given the lot size, allows for a building with approximately 120 units and requires only 67 parking spaces.

“The site is zoned for multifamily. That is what drew me to identify this site for development,” said Methu to the RACM board.

Dimitrijevic said a bigger discussion is needed about how the city communicates its zoning and what is possible to residents.

Meyer, the neighboring business owner, opposes the building’s design, even though that component is not up for review. “What we don’t need is more cardboard-type apartment buildings,” he said.

A handful of comments have been submitted in support of the development. “I think this is necessary for Milwaukee,” said one commenter, identified as Velly M, at the April 16 RACM meeting.

“This is one of the hardest neighborhoods to do new housing in,” said RACM Commissioner Montavius Jones. “To see an affordable housing development here is very encouraging.”

“I’m trying to get a compromise and a balance,” said the alderwoman in her interview with Urban Milwaukee.

Proposal could move forward

The Common Council is expected to eventually review the proposed tax incremental financing (TIF) subsidy.

The proposal has been formally introduced, said Dimitrijevic, but it will not be heard at the next Zoning, Neighborhoods & Development Committee meeting on June 16. She said that is because it would not give enough time for a third community meeting, which is planned, but has yet to be announced.

Two more meetings remain before the council’s August recess, and the July 31 deadline.

The TIF subsidy, effectively a property tax rebate, would provide the development team with $2.1 million plus interest over a period of no more than 19 years. The structure, commonly used by the city to support affordable housing developments, repays the developer with increased property tax revenue generated by the development.

Because the project would receive more than $1 million in city funding, the development team would be required to have 40% of the project’s construction work hours completed by unemployed or underemployed city residents and 25% of its contracting, by value, performed by disadvantaged small businesses.

In addition to the city subsidy and possible HOME funding allocation, the development is receiving $200,000 in Section 48 tax credits that are being used to fund green infrastructure improvements and $330,000 in Focus on Energy funding. The state housing trust fund is also putting $2 million into the development. There is a $2.9 million deferred developer fee.

Of the 100 units, 37 would be set aside for those making up to 80% of the area median income, 40 units would be reserved for those making up to 50% and 23 at the 30% level. The tax credits require specific units be set aside at specific income levels with rental rates targeted at 30% of a household’s income.

The building would have 40 one-bedroom, 36 two-bedroom and 24 three-bedroom units.

Eppstein Uhen Architects is leading the complex’s design.

Renderings

Photos

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