A 92-unit affordable housing project has cleared all its hurdles with the city, and construction could begin as soon as next week.
The city council unanimously approved a tax increment financing agreement Monday for the proposed River Flats apartment complex, giving it the final OK for construction to move forward.
The five-story complex will sit on the downtown block bordered by Jackson Street, Franklin Street, Laurel Avenue and Centerway.
The developer, Commonwealth Company, wants to start moving ground in March, possibly as soon as Monday, said Daniel Kroetz, senior vice president of development.
Construction will cost $19.3 million, which will come from 10 funding sources, according to a city memo.
The city will provide the following incentives for the project:
- A $40,000 no-interest loan from Wisconsin Rental Rehabilitation Program funds to be repaid at the sale of the property or 40 years after the loan is made, whichever comes first.
- Forgivable loans in the amounts of $201,000 from TIF District 21, $160,000 from TIF District 33 and $185,000 from federal HOME funds.
- $1.9 million to be paid through pay-as-you-go incentive over 20 years beginning in 2022.
The city will also give Commonwealth three parcels of land.
Other funding will come from equity, a mortgage, a housing trust fund, a deferred development fee, and the Wisconsin Housing and Economic Development Authority, according to a city memo.
A relatively new state law allows municipalities to keep TIF districts open for one year past their intended closing dates if the municipality uses the increment from that year to fund affordable housing projects. The city is taking advantage of that change to give the TIF district loans included in the River Flats deal, Price said.
The project will be valued at $4.8 million once complete, a number arrived at after discussions between the city assessor’s office, Economic Development Director Gale Price and the developer, Price said.
The value is largely dependent on the project’s cash flow, which is low for affordable housing projects. Through an agreement with the state housing authority, the apartments must be affordable housing units for 30 years, Price said.
It was important for the city to assist the River Flats project, he said, because there is a dire need for affordable housing for its workforce.
Tenants will likely include young professionals out of college and retail workers, Price said.
Council members had questions Monday night but were largely supportive of the TIF agreement.
“This is a culmination of an incredible amount of work by a huge group of people,” council President Richard Gruber said.
The city dedicated itself to adding to its housing stock after a housing summit two years ago. In the last year, the council has approved three projects that are supposed to add nearly 500 units to the city’s stock, council member Tom Wolfe said.
Those who participated in that summit should feel good about the progress the city has made, Wolfe said.
This story has been updated to clarify TIF assistance amounts.