East side apartments get chilly reception at City Hall

Mar 10, 2010 — Milwaukee Journal Sentinel

Tom Daykin

Mar. 10, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- A proposal to develop a nine-story east side apartment building, aimed at employees from the nearby Columbia St. Mary's Hospital, received a chilly reception at its initial City Hall appearance Tuesday.

The Common Council's Public Works Committee was reviewing a resolution to provide a purchase option to Mercy Housing Lakefront Inc. for a city-owned lot between N. Farwell and N. Murray avenues, about a half-block north of E. North Ave. Mercy Housing is a Chicago-based nonprofit developer that would pay property taxes on the development, said Martha Brown, deputy city development commissioner.

Mercy wants to buy the 46-space city parking lot for $425,000, or about $30 a square foot, and combine it with part of a neighboring parking lot owned by U.S. Bank. (NYSE:USB) The bank operates a branch office at 2303 N. Farwell Ave.

Under Mercy's proposal, the building would have 83 apartments and a 115-space parking structure, including 30 spaces for public parking. It is among two new apartment developments proposed for the neighborhood.

To finance the $12.7 million project, Mercy would seek federal affordable housing tax credits. Those credits require developers to lease apartments at below-market rents to people earning no more than 60% of the area median income, or $28,440 for a one-person household.

The development would be marketed to employees of the nearby hospital, which is expanding, said David Lyon, Mercy's regional real estate development director.

Lyon told committee members that Mercy has a business relationship with U.S. Bank, which would probably be the project's lender. The bank has purchased tax credits on other Mercy developments, which provides equity financing.

He also said Mercy would "soften" the impact of the building's height on nearby houses on E. Thomas Ave. by having seven to eight two-story townhomes on the north end of the development site. The remaining apartments would be in the taller building set farther back from Thomas Ave.

Lyon said the building's 96-foot height is necessary to have enough units to make the project feasible.

Ald. Bob Bauman, chairman of the Public Works Committee and sits on the Zoning, Neighborhoods and Development Committee, where the project would eventually seek zoning approval, didn't seem impressed.

"I think you've got a steep hill to climb" to obtain council approval, he told Lyon. The committee voted unanimously to hold the matter for further consideration.

Meanwhile, there was discussion about whether the Public Works Committee should even hear the option request.

Ald. Nik Kovac, whose district includes the site, told committee members that Mercy needs to obtain a purchase option before the March 26 tax credits application deadline. That option would not amount to final approval on the land sale, nor would it involve zoning approval. But it would give Mercy a chance to obtain tax credits by showing it controls the project site.

Kovac said the committee could hear the presentation from Lyon, and then schedule a special meeting to take action before the full Common Council meeting on March 24. He said Mercy is meeting with neighborhood residents and business operators at 6:30 p.m. Wednesday at Paddy's Pub, 2339 N. Murray Ave.

Also appearing before the committee was Mike Maierle, facilitator for a neighborhood group, the Greenwich Village Association. Maierle said no one from the association was notified about the committee meeting.

Another neighborhood group, the Water Tower Neighborhood, has contacted Kovac about "our concerns regarding the speed and lack of public disclosure and input related to the proposed sale of public land and rezoning for the Mercy Housing project." That's according to a letter that Jeff Bentoff, group president, filed with the committee.

Newstex ID: KRTB-0130-42735608