RDA announces Fox Point decision; green lights loan for Club Modern demolition
Tuesday morning, the city’s Redevelopment Authority (RDA) unanimously approved a proposal from Madison-based Horizon Development Group, for residential development at the former Fox Point Sportswear Property (1905 14th St./CTH G).
The committee heard re-development proposals from Horizon and S.C Swiderski LLC of Mosinee during its Sept. 21 meeting.
During that meeting, Horizon proposed a 60-unit development in partnership with the Merrill Area Housing Authority.
The development would consist of “mixed income” based rent with 51 units rented on an “affordable housing” basis and nine units would be rented at market rate. The development would feature townhome-style units with attached garages constructed beneath the living units. Units would also consist of 1, 2 and 3 bedroom options, featuring forced-air heating and cooling, and ground floor private entry.
Horizon representative Scott Kwiecinski indicated the Horizon proposal would come with a price tag of $9.8 million, $6.8 million of which being contingent upon approval of Wisconsin Housing and Economic Development Authority (WHEDA) tax credits. An $850,000 affordable housing grant would also be included in the financing of the project.
Swiderski’s proposal called for a four-building, 56-unit apartment complex.
Two buildings would house 12 units while the remaining two buildings would house 16 units. Both buildings would feature 1, 2 and 3 bedroom apartments measuring 958 square feet to 1,350 square feet. Units would be accompanied by unattached garages and hot-water boiler heat with a market value rent range of $720-995/monthly. Swiderski the cost of the development proposal to be in the range of $4 million.
As City Administrator Dave Johnson explains, Tuesday’s selection of the Horizon proposal came on the heels of various deciding factors.
“It was felt quality of construction in the Horizon proposal was higher than that of the Swiderski proposal,” he explained. “The Horizon proposal was not asking for any TIF incentive aside from the property and the project also includes Section 42 Affordable Housing, which has been identified as a specific need in the city’s comprehensive plan.”
The difference between Section 8 and Section 42 housing as Johnson explains, is a matter of how funding is allocated in terms of renting.
While Section 8 housing allocates rent subsidies to renters, Section 42 housing is based on tax credits.
Section 42 housing requires rent to be kept at a lower rate based on income, however no payments are made directly to renters.
Rent rates of the Horizon proposal will be based on 30%, 50% and 60% of median household income of Lincoln County, based on family size. Additional requirements for renters will include a credit check, background check and verifiable, viable income; as well an annual re-certification based on the same criteria.
Construction of the Horizon proposal would be contingent on the acquisition of tax credits, with the application process to begin in January.
If all goes as planned, construction could possibly begin as early as Spring of 2017.
If acquisition of tax credits is unsuccessful, the city would have the option to stay on board with a re-application process by Horizon for the WHEDA tax credits, or consider other options such as re-bidding the development.
Based on Horizon Development’s track record, Johnson appeared confident in the process moving forward.
“Historically, Horizon has been very successful with obtaining tax credits. The upcoming Park Place expansion is a fine example of their success as well as other projects around the state.
“The City looks forward to this project moving forward and providing affordable housing to both current and future residents of our community,” he added.
In other matters Tuesday morning, the RDA also unanimously approved a $37,500 Environmental and Demolition Loan for 1003 and 1005 S. Center Ave. (former Club Modern property) secured by mortgage from owners Stephen and Linda Blake.
According to Johnson, the property no longer meets city building code and has remained vacant since 2013. Attempts at sale, rent or leasing of the property have been unsuccessful.
“We hope this property doesn’t remain undeveloped, it’s ripe for development,” he adds optimistically. “It is always easier to envision a project on a clean site than on a developed site.”
Tuesday’s recommendations by the RDA will be forwarded for common council approval next Tuesday.