City funding of $2.55 million proposed to help three affordable apartment developments

A proposed affordable apartment building with a new King Library branch is one of three such developments that could get city funding.

A proposed affordable apartment building with a new King Library branch is one of three such developments that could get city funding.

City funds totaling $2.55 million are being proposed to help finance three Milwaukee affordable apartment developments, including one that would house a new library branch.

The three developments are among several such Wisconsin projects that have been delayed as inflated construction costs have affected their financing packages.

The new proposals, from Mayor Cavalier Johnson’s administration, would create tax incremental financing districts for each development. The property tax revenue generated by each development would provide the city funds to help finance them.

Those financing districts will need Common Council approval. Their first public hearings will be at the Nov. 17 board meetings of the Redevelopment Authority.

All three projects have received federal affordable housing tax credits.

Developers that receive tax credits must generally provide at least 85% of a building’s apartments at below-market rents to people earning no higher than 60% of the local median income.

Developers sell the tax credits to banks and other investors to raise capital for their projects. Most of the additional funds are usually provided through commercial loans.

But the developments still have financing gaps due mainly to inflated construction costs.

The three projects are:

The proposal from General Capital Group LLP and Emem Group LLC calls for a four-story building at the northwest corner of North King Drive and West Locust Street.

It would replace the current King Library with a new library branch and retail space on the first floor, and 41 apartments on the upper floors.

The plans also call for a four-story, 43-unit apartment building at the block’s northern end, at West Chambers Street.

Meanwhile, the former Garfield Theater’s lobby, in the block’s middle at 2933-2957 N. King Drive, would be converted into nine live-work units. The rest of the dilapidated former theater would be razed for surface parking.

The developers also are seeking cash from the city’s Housing Trust Fund. The firms hope to complete the financing package in January, begin demolition work shortly thereafter and start construction by early spring, said Michael Emem, Emem Group president and chief executive officer.

The former middle school will be converted into 63 apartments, with another 12 townhouse-style units to be constructed at the development site.

Construction work is scheduled to begin in January, with completion by July 2024, said Ted Matkom, Wisconsin market president for Gorman & Co., a development firm based in the Madison area.

  • The 55-unit Five Point Lofts, west of King Drive and north of West Concordia Avenue. The $16.4 million development is to get $737,000 in city funds.

The five-story building would include 10,800 square feet of ground floor commercial space. It would be built at a vacant site in the Harambee neighborhood.

KG Development Group LLC has also been seeking American Rescue Plan Act funds to help close the financing gap, said Anthony Kazee, KG Development principal.

The firm is seeking to complete its financing by January and to begin construction in March, Kazee said. The apartments would be open by April 2024.

Tom Daykin can be emailed at [email protected] and followed on Instagram, Twitter and Facebook.

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This article originally appeared on Milwaukee Journal Sentinel: Three Milwaukee affordable apartment developments to get city funds

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