Wauwatosa's newest tax incremental financing district, authorized just last month, is already being activated in support of multiple housing redevelopment projects in the Milwaukee County Research Park, with a second potential development in the district poised to receive city assistance.
The latest project, which is requesting assistance through a financing tool known by the shorthand TIF, is a 204-apartment development that Irgens hopes to build on a vacant 3.7-acre parcel on the northeast corner of Mayfair Road and Wisconsin Avenue. The Common Council's Finance Committee voted Feb. 10 to recommend a term sheet for an agreement with Irgens outlining an unspecified amount of financial support for the project. The measure now advances to the full council for consideration and possible approval at its Feb. 24 meeting.
Before the Finance Committee went into closed session to discuss the term sheet, city officials and representatives from Irgens presented details of the planned development, describing it as a $60 million project that will contribute to the city's goals of increasing its tax base and expanding housing options.
"What we tried to achieve here is balanced density," Rob Oldenburg, Irgens' senior vice president of development, told the committee. The four-story building would offer market-rate apartments ranging from 515-square-foot studios to 1,500-square-foot three-bedroom apartments.
The site design seeks to be respectful of the residents in the neighborhood south of Wisconsin Avenue, Oldenburg said, noting that the building will be set back from the streets at least 50 feet and would be buffered by existing berms and trees and additional landscaping. The primary entrance would be on the north side, reducing the volume of traffic and activity facing the existing homes to the south.
The apartments would be built over a single-story parking structure with 195 stalls that would be partially underground. Another 75 surface parking spaces would be provided for residents, primarily on the north side of the building. Irgens intends to begin construction this July, for an October 2027 opening.
"It's ready to go. It's an executable plan, to add 200 units to the housing stock of Wauwatosa," Oldenburg said. The developer also has agreed to give the city $222,000 for its affordable housing fund, administered by the Community Development Authority.
Video of the Finance Committee meeting can be viewed here, and the Irgens presentation starts at 22 minutes. The slides from the presentation are here.
TIF districts are tools that the state provides to municipalities to spur redevelopment of blighted or underused properties. All new tax revenue generated by new development in the TIF district is used to pay down debt that the city chooses to accrue to pay for eligible development-related expenses, such as road construction, utility work, other infrastructure projects or direct financial support to developers.
Demand for housing in Wauwatosa continues to be a top issue in the city, and municipal leaders have long identified providing more affording housing options as a city government priority.
The Irgens apartment building would be the latest phase of the company's redevelopment of the southwest corner of the Research Park on property it bought in 2021. The developer renovated and is leasing the former UnitedHealthcare office building, and in recent years, it has added a retail building and a medical office building nearby. Irgens did not seek city incentives for those projects.
Wauwatosa Development Director Mark Hammond said city staff had reviewed the apartment development, as well as an outside analysis of the financing, and determined that the project would not be financially feasible for Irgens without city assistance through TIF payments.
"It's a pretty challenging time to get multifamily development," Hammond told the Finance Committee, citing interest rates and the cost of materials and labor. "We still continue to see strong demand for multifamily housing in Wauwatosa."
The Common Council previously voted on Jan. 27 to create what is known as TID 16 to allow the city more flexibility for investing in infrastructure upgrades and redevelopment in the aging 134-acre Research Park, which is mostly bordered by Interstate 41 and Mayfair Road on the east and west, and by Watertown Plank Road and Wisconsin Avenue on the north and south.
The city also has been partnering with Irgens, one of the Research Park’s largest property owners, on developing a new master plan for the area and now is taking comment from the public.
Under the TID 16 plan, the city anticipates spending up to $34.2 million on projects in and near the district, including up to $25.8 million for developer incentives. The benefit to the city, according to the plan, is that those projects are estimated to increase the city’s tax base by more than $100 million, compared to the value if the city did nothing to spur redevelopment.
The first major project in that new district, on the west side of the Research Park, is the conversion of the former Sonesta hotel into an apartment building with 146 units. In November, the council voted in favor of a term sheet for an agreement with the developer to provide $1.85 million in city incentives to make that redevelopment happen.
If the council approves a similar agreement with Irgens to support its apartment development, both TIF investments would be structured as "pay as you go." In other words, the city's developer incentives would be offset by the new tax revenue collected on the higher-value properties.
City costs incurred through TIF districts generally do not result in any burden to taxpayers, as long as the new revenues generated over the life of the TIF are enough to pay down the loan, as has been typical in Wauwatosa’s TIF districts. The city’s most recent summary of all its existing TIF districts can be accessed here.
The TID 16 plan, prepared for the city by the company Ehlers, estimates that the city will recoup its investments within 19 years, after which the increased property value within the district will be added to the citywide assessment roll. The plan drafted by Ehlers can be viewed here.
The dollar value of the city's proposed TIF incentive for the Irgens apartment building was not revealed in open session at the Finance Committee meeting, though the TID 16 plan references a "Phase 1" project that would receive $6.2 million.
- David Paulsen, a Tosa East Towne resident and editor of Tosa Forward News, has more than 25 years of experience as a professional journalist. He can be reached at editor@tosanews.com.
