Redevelopment Authority - Regular Meeting

I guess it's 06:00.

Yeah. So I see it's 06:00. I'd like to call the Monday, October 20 meeting of the Redevelopment Authority. All members are here except for Mike and Jerry, so we have a quorum. Is there any public comment? I don't see any. Alright. That moves us to approval of the minutes, ID 25Dash23382. Any objection to approval of the minutes? Seeing none.

Do you wanna take a motion

for that?

Oh, yes. I just follow Alderman Piper.

Oh, is that how he does it? Yeah. Oh, okay.

I'll move for approval. Okay.

Second. K. And a second by me. All approved. Aye. Aye. And passed unanimously. That moves us on to our business items. First one is ID number 25Dash2384, update on redevelopment authority loan programs.

So this is the current status of all of our loan programs. Not a lot of change since last meeting. We'll get into the next item, but look at the affordable housing development fund. We had committed $720,000 at the last meeting. I'm gonna see if I can pull that proposal, but now we have a new developer for the site kinda requesting the same amount of money. So I took it out of this one, so this is our current status of of that revolving fund. Storefront activation, last minute, let us we changed that policy for the storefront one to allow for flood, you know, flood proofing projects. So watch out Civic Theater took advantage

of that and took out

a $25,000 loan, but they're the ones who did it so far. So otherwise, the loans are just we're just kind of in getting repayments from the affordable housing rehab program. I don't think since last May, we've been issuing new loans out of there.

And you you said that this would be after if we approve tonight?

No. This is what it is right now. Right now? Because Mike had withdrawn his

Okay.

Application. So I put it back in here. So he's not gonna use it. So and I have the numbers later on in the slide. It'll show where it'll be if that's approved.

Does anyone have any questions on? No, sir. Seeing no questions on the update for the redevelopment authority loan programs, we can move on to ID number 2502385. Reviewing possible action on a request from Charity Faith Properties for an affordable housing development fund loan agreement for proposed 36 unit residential development on a vacant parcels, Meadow Lane between Silverdale and Marshfield Street.

Alright. Also here tonight is Juan Cherry who's from Cherry Faith Development. So he can after I'm done with the presentation, he can make a quick introduction to any specific questions you have at all. Alright. So over this the last month, this was the Duplex construction project location here off on Meadow Lane between Marfew and Silvernail.

It's right next to Good Harvest and the Abbott Hotel. There's just kind of a little site layout there. So what Cherry Faith is proposing is very similar to what Duplex Properties has proposed. In fact, Mike had kinda given himself his information and site plan and some of the background that he had done on it. We got a three story, 36 unit, multifamily buildings, surface parking as was proposed before, running through Connect as a it would be a in an easement, one technically, just easement across the properties that's already existing.

And then, again, similar layout of a mix of two bedroom, one bedroom, then they have the affordable units just like Mike had proposed. And then kind of similar layout on the other stories. Made a little bit tweak to the floor plans in here. So it's it's very similar product, but he has made some changes to it. So here's the layouts of, you know, the one bedroom.

And here, there's some of the two bedrooms and the one bedroom of den. And And then then this was the previous seminal, the architectural inspiration for it. What Tawana has done is changed the kind of direction of it, made it little bit more interesting from a visual perspective by adding some varying roof lines, a mix of different mix of materials, and then kind of a combination of flat roof and pitch roof, which kinda matches some the architecture in the area. A little bit more color in this one as well. So this is just kind of conceptual.

These are early stage renderings, but just to give you an idea of some of the changes that are being made. And then here's a few of the actual, like, three d renderings just to kinda show how that would look. Again, this would be, obviously, revised as it goes forward with the actual material types, and then this type this part will go through plan commission for a design review and site plan review. So just a couple of concepts on there. As we mentioned at the last meeting, we have there's a lot of challenges to this site.

There's that water main loop. You can see where the two blue dots end. We have to connect the developer has to connect that. It's pretty significant cost to bring it from through the Gudhara site all the way across this property and then connecting to the current terminus of the water on the AVID property. There's some unstable soil conditions here that need to be remedied for the new building to go in.

And then with all of these workforce housing developments, we're it's always a challenge to keep that rental income at a level that works to make it affordable to the workforce, but to still make this project cash flow. So similar to the last proposal, requesting 20,000 per unit for a total of $720,000. Up there, I've got the development fund, what's in there now. We've got 800,000 committed. Those are those habitat loans that are cycling back in, and then we have one point plus $1,300,000 in there right now that haven't been committed.

Same terms, thirty year repayment, 1% interest, the first two years being interest only payments, and that helps with the cash flow on this, getting that building up the rental income. And then once you have it fully leased up, then you're doing your full payments of principal and interest. With all of these, we've kinda come up sort of a internal policy of not distributing loan funds until the permits are issued. Couple of reasons for that. One is I really know there's a project.

It's been through all it's been through all of its due diligence. They're pretty much ready to go. They're pulling permits, and then they get the money. This is we've done with Habitat as well, and this is the what we approved last month. Another reason for that is where we would fall on the you know, I mean, you know, we've been a more we're really down towards the bottom. You have your bank loan. You might have funds or other things on there. So number one, we don't wanna end up with this property because it is challenging to develop. And number two, we've, you know, if something happened and we put out money, we might not have a chance to get it back if the project fell through prior to getting building permits. But it seems it's worked for some of these other programs, so I think that's the way we're this.

Also, they're looking at our financial assistance, Waukesha County Center for Growth Grow Fund. They'll also do loans, targeting workforce housing, and then home funds. Those those are a little more flexible. Those can also be used for property acquisition. So that's another financial assistant that they're pursuing. And then this construction would start next spring assuming everything's in place, and then project will open in 2027.

Jeff, could you just show the pictures one more time for Jerry? Know he's not laid on purpose.

So these are the ones we saw yeah. These are ones we saw last month of what the building It's considered grade. Yeah. So now the current developer is proposing, changing the architectural, but the building footprint's kinda remaining the same, but just changing the architectural design, adding a little more visual interest. How many units, Jeff? 36. So this is 36. It was the same as the one last time as well. Three stories. This one's got a little bit of varying rough lines and different materials in there.

If you look at the surrounding buildings, I think it it fits in pretty nice. Good harvest has different and then Abbott's kinda got that modern look with some different color in it. So it's pretty compatible with the surrounding buildings. Then there's a few runners just to kinda give you an idea how that would look. This looks we've vetted out by the planning commission too, but this is really give the idea a concept of what will look like.

I don't if the challenges I'll catch back up here. So there's been a couple of modification developer, obviously, has changed the materials and design. But in looking at their pro form a on how to make this cash flow, because Dufin Properties was having a hard time making this cash flow. I've got some other ways to cut costs or so in this case, instead of hiring out management to be self management of the property, which is a cost reduction. So it's kind of focusing on their operating costs.

Instead of doing lease commission, they do the lease up themselves. They do the leasing themselves. They kinda review different monthly tenant fees, and then also looking at the building design and interior and stuff how to cut cut costs there just in an effort to make this thing cash flow. I mentioned earlier, all these affordable housing developments are very challenging

to make work. But I

think these, along with some of the other funding sources they can access, might make this available to work. And with it being tied to the billing ports, if if they can't make it work, and then we're kinda you know, the money doesn't get out till their point building permits, so we'll have the money there. If the project falls through, we sell the funds. So it's pretty low risk to the city on this end. So looking at the recommendation, we're recommending very similar terms. The 1% annual interest rate over thirty years, interest only payments for the first two years, and then tying it to the building permits that I've mentioned. And then the way this development fund works,

as well as some

of the other programs he's looking to access, including, like, the home funds. Those units are gonna be restricted to households at or below the Waukesha County median income level. Some of his will be coming out at the lower end, and the other ones will be up to the median income level. And then we're trying to tie it get it having in there give them a year to get the the billing permits. Their goal is to get it done, like, to start prior to that. But so we put a one year time limit on these funds if there's a reason. If we see the project moving forward and they come back, they can come back there and say, hey. We need another month. But at least this kinda only holds up those funds for a year. We're not sitting there kinda looking at vacant site for several years. So these issuance, billing parts and disbursement would occur no longer than a year

from today.

So that's that's a good all I have on here. And then the developer, do want Jerry's here? And if you wanna introduce yourself and talk a little bit of the project. Oh, you can come up to one of these chairs. Absolutely. Just feel free to sit there.

A little bit more personal. Yeah. Alright.

How's everyone doing today?

Good. Very

good. Well, thank you very much on this Monday tiring day for meeting with me. So to start, I am the principal developer for this project, Dewan Cherry. My objective whenever I do housing, of this caliber is to provide a couple of things. One, affordability for great communities that need it.

Two, provide ADA accessible or excuse me, Type A units. With that, that's really my mission with everything that I do. So kind of quick background, I went to Concordia University of Wisconsin where I was an RA for the Bethesda College Program, a very well respected program throughout the state of Wisconsin. So what they do is do a couple things, actually. Of course, they provide education for families or excuse me, for individuals that have disabilities.

And of course, they have a vetting out process with that. But of course, they take classes or they integrate their classes with Concordia Later down the line in their life, this is post graduation, they provide housing in that community, so of course, the Mequon community. What I did throughout that time was I was an RA. So I taught independent living skills. So that passion for, you know, working with families and and, you know, providing whether if it's, you know, connect them with know, to great organizations or allowing them to connect with employers and things like that to get great jobs, if it's mom and pop coffee shop, that's something I've always been a part of even in my Concordia days.

So I never thought that that was gonna take me to, you know, the real estate development industry, but I think there is definitely pieces in my life that was going to lead me, you know, within this industry. And so, yeah, so Mike is actually working with me on a couple projects or actually, he's doing one other project in the city of Waukesha. Jeff and I, we talked about that as well. It's eight units, 339 Arlington Street right across from I want to get the Les Les Paul, yeah. Middle School, which is an eight unit.

Specifically, I had a great conversation with Darren Clark as well, too. So when Mike introduced this project to me, I instantly was on the I was happy about it mainly because it's in a great area, surrounding by great businesses and things like that, so ultimately getting affordable units around a vast majority of jobs and things like that, that's something that I immediately was gravitated towards. Of course, Mike said, this is a great opportunity for us. Obviously, I'll still be the general contractor for the project. So any sort of if it's financial or just kind of being the guarantor of the project, I'm willing to help out.

And I think just having that relationship helps. Beyond that, yes, the architectural side is very, very important to me. So for me, I see a lot of development going on. It's kind of the brick and mortar. To be very black and white kind of looked like prison cells a little bit.

It's very block and it's just not appealing. So I like to listen to the community and and and I pride myself on getting a vast majority of pins and things like that. So I wanted to create something that had a little bit of aesthetic appeal to it. And a lot of this, you know, we we wanna incorporate some, you know, accent colors on within the exterior side. And so we want to mix in, you know, different materials and things like that.

So Felipe from Inberg Anderson, they designed this. I was very adamant on, I really want this to be different. I want this to be aesthetically somehow fit into the neighborhood. I want to provide some balconies in there as well too. And whether if it's a it doesn't have to be the largest amenity package, but can we kind of create a room somewhere where it's great fitness equipment, it's a lounge area, of course, it's office for the leasing manager and things of that nature, it's a lot of parking on the outside, but then is there a potential area where we can do like a playground or something like that for families?

So Filipe designed this and I actually love it. It's different. Obviously, I still want the balconies to be incorporated as well too for the type A units, of course. If you're someone in a wheelchair, then of course, I always want to encourage those to live on the Bottom Floor since it's, of course, accessible. You're right, you roll out to your parking space as well too.

So I'm always on a courtesy app, of course, you know, if they want a, you know, balcony related unit, then, you know, that's fantastic. From a financing standpoint, I am working with Waukesha State Bank for the senior debt side. So they're currently working through the numbers. Would like to the idea is to refinance through a HUD two twenty three, which is pretty much a government backed loan. Their terms are a little bit less, so they go by 1.11 DSR, thirty five year amortized loan.

And yeah, looking at it from a financing standpoint, it would have to be something of a HUD based loan just because materials aren't getting cheap. Obviously, you want to incorporate affordable rents. We do have mix. On the higher level, we have 2,000, a couple of units, that would be $2,000 for the two bedroom. But in order to really make this financially work, you need to mix in units with different incomes and things of that nature.

Of course, there was additional income that we could charge as well to parking fees. At the same time, you don't want to make it too extreme. But once again, doing projects like this is not easy. And so typically, it's you have a low rent, you have to kind of upcharge on parking fees, pet fees, things of that nature. Once again, we're just talking numbers here.

Yes. I have reached out to actually, I have a meeting with John Miller and Therese, and they would be the second position debt. So Waukesha State Bank will provide $3100000.0.2.1 ish, 2.2 ish would come from Waukesha County Home FundMEDC. And then anything third or fourth position will, of course, be Waukesha affordable, if that's what's rejected in there, and Waukesha Home Funds as well, too. So yeah, that's from a financing standpoint, we are my banker, Spencer Mather, we are going through kind of the full pro form a to make sure that numbers check out.

They'll be providing construction to White Capital, we'll provide the HUD two twenty three loan and that's post construction. And that will be the goal there from a financing standpoint. A lot of pieces there, but hopefully, if you have any questions, feel free to ask.

You're talking about balconies and decks, but I only see two.

So one two, there's another one on the other side.

Oh, yeah. Yeah. That's the

same side. Oh, no. Go back to yes. One two and on this three four. Okay.

Yeah. The end you look at the end caps too.

Yes. So it's not on the backside then? Should be two on the backside.

I don't think we have a there's not

a rendering of the backside.

Oh, yeah. There's not. Yeah.

Let's go to this. Let's go to these here. There. Yeah. So I can see them.

Yeah. Bottom

line. That shows more direct spot. There you go. We got

we balconies on all of those. If you look along the back, kinda looking

So those are all balconies on the bottom sketch? Yeah.

Yeah. Here? Yes. And that'd be

the ones facing kinda towards, like, the wetlands, kinda with the nice the nice view.

Thank you.

Of course.

It said that this was gonna be affordable. So I saw in the packet, some of them were going to be 60 to 80% of median income. Some are gonna be from 80 to a 100% of median income. Are there can you give me an idea of how many units of each there's going to be in two bedroom and one bedroom?

Yeah. Absolutely. So for the so we have one sorry. We have seven one bedroom units that will run out for $9.79.

Okay. And is that okay. There it is.

Where's the floor?

So that's yeah.

So 11 Of 4.

That's the 1st Floor and the bottom is the next two floors up. We're gonna click the bottom.

Okay. So the affordable is gonna be one, two, 34, five. So five times three. I'm assuming that each floor is the same.

Not that So the 1st Floor is a little different. That's got some of the amenities, and then you see it with a lot of

on the chart.

The 2nd And 3rd Floor are the bottom one.

Okay. So there's gonna be 11 of them that are gonna fit the 60 to 80%.

Yes. So I was I was gonna just give you the full breakdown. Yeah. Yeah. So

I think they're good. 11. One bedroom market rate is 12. One bedroom den market rate is two. Two two bedroom market rate is 11. So there's gonna be 11 affordable units. Correct? Okay. And are those gonna

Are those at that rate? The whole thing is is kinda considered affordable, but the ones at that. So if you look at the you know, the one the 8080%, and then you have up to 100%. So whole thing for the terms of this loan would be affordable. It just depends on what level of affordable.

Between 60 and a 100% of of the median income in Waukesha Correct. Or Waukesha County. Right. So what does market rate mean then if if you're gonna have those versus you know, if I'm just confused. If it's 36 units at a 100% of median and lower. Is that correct?

Mhmm.

Okay. Thank you.

So, yeah, the way this list the market rate is, yeah, that's

Market is the 80 to 100. Yeah.

Is there a pro form a by chance that can be shared with us? I think Mike brought through a pro form

a last time that I

identified the different rents.

Yes. I do have his pro form a here. That's different than this. Yes. We tweaked a little bit. Yes. Yes. Okay.

Did you want to see that before you make a decision?

I think it's pertinent information out. Look to the committee to see what their thoughts are.

We could pull it over to next month.

Yeah. Because the actual rents.

Oh, do you not have it with you?

So I have Mike's pro form a here. Then once again, we only tweaked we didn't yeah, we didn't tweak the rents. We tweaked, for example, management fees, things of that nature, but we didn't. If that answers your question. Because would you like to see a full pro form a with the rents or would you, I guess, just want to understand

your question.

It would be nice for us to be able to understand what the rent looks like. Unless I'm misunderstanding, you guys can correct me. But my impression was last time that we were looking at eleven units that were between 6080%. And then the rest was at market, not within an income bracket. So that's No.

It's the same. It's the same.

Yeah. Because we So These funds required if you're gonna tap into our funds and spread across, like, we're doing the the per unit thing.

Okay.

Everything's gotta be anything that's receiving that assistance has to be per the terms of our development fund agreement.

A 100 or less. A

100 or

less. Okay. Understood.

What is the income level to be a 100% in Waukesha?

Let's see if you just updated these.

Thank you.

So in Waukesha, a 100% it's by family size.

Yeah.

So a two person family at a 100% county median income is 88,500

Okay.

Which allows for a housing cost of $2,200 a month.

Okay.

That was a two person household?

Yeah. It's a two person.

Okay. And then so 8080%

at the two person would be 70,850, which is $1,771 per month.

Yeah. That's what you have for her. Okay.

And then the 60%, that would be the lowest in the ranges for two people, 53,000 or a monthly cost of $1,300.

So just for my understanding, again, I ask questions because sometimes the public watches this and then they and even though I might know the answer. So for example, the Springs out on Summit View, that's a 100% market rate. They didn't apply for any. So they have rents of 6,200. They're not bound by it. So they when they made their presentation, they said that that was market rate. So this particular program, even though their market rate their market rate to the specifications of low income, which is a 100% maximum 88,000 for a two family.

Right. It's a verbiage difference. Yes. HUD considers affordable as 80% or below. So often developers will say it's market rate because it's above that 80% mark. So it'd be anywhere above that 80% mark. So in this case, we're capping that between eighty and one hundred as the market rate units. But we still consider those affordable because it's people living below that median income.

And we and we put that on recommendation too that these are limited. That 100% is the maximum for anybody in here.

Yeah. So it's a real gap in the city that that area between 80 and say one twenty, 120% of median income. There's a big gap there in rental units available. You know, you've got the ones dedicated, the buy HUD, funds for below 80. Then you've got market rate like you mentioned much, much higher. But in between there, you know, for your workforce, those are really lacking.

And and once again, just to kinda clarify this. So because from my previous history, a lot of people just want to know, okay, what is what's the rent's going be, right? So just to kind of clarify that, right? So I think that is important, right? So 7 so we have seven for the affordable side.

On the one bedroom, we have $9.79, right? For some of the two bedrooms, specifically, Mike had it as four, two bedroom units, $11.70, right? And then you had fifteen one bedroom on the market rate side for 1,600. And then for the market rate for the other two bedroom units, you had 10, and that was for $2,000 So from my history and especially dealing with public comments, a lot of the residents just want to know what's my rent going to be. And I just say this is what's going to because you can say some people are building numbers, people are vet, but one people that or something that people have in common is what is my rent going to be for this one bedroom unit?

Just want to keep

it as clear as possible.

Would fall at that 100% or less, you know, affordability range.

Yes. And

then when they're leasing, they would ensure that they're meeting those income levels, you know, so K.

Does anybody have any questions? I I'm I'm in favor of the program. What is the total value of the the property gonna be? 8.7

Couple minutes. It's just loading here. I

thought I saw it in the in the, you know, what you gave us, what the dollar amount was, but I I forgot it. Think you're in

the right range. It's.

$8.8.0.5, 8.6. Yeah.

I remember seeing some things

that my

my thought is value per acre again. We always stress that in the city. The only way we're going to increase our tax base is to have the the value per acre because there's not much developable land left. And when we were talking about Mike's, $720,000 on a value, tax wise for $8,000,000 a year. The breakeven point was, like, seven years if we didn't see any return on our investment.

So I thought it was pretty safe to do it long term. You know, we suspect that it's gonna go, but that that's why I was in favor of it because we certainly need homes in Waukesha that are 900 to $1,500 a month. There's very little slim pickings out there for anybody to to do. So I'm in favor of

of of the

while it is risky, $720,000, it's in my opinion, it it's worth the so, you know, I would make a motion to approve. If there was a second, we could discuss it further. Second. Jerry seconds.

That's kinda why we have those the billing permit. I because at that point, they really have done everything, gotten their approvals. They've acquired the property. So that's why we kinda build that that money in. Whereas the city's kinda like the last sorta like the last dollar into this. So We So it gives us some insurances that that that project's happening. And we we do that with a lot of our TIF projects as well. Like, you have to have your building permit, then you're gonna get your then then you get some of the TIF funds. We've done out a few projects as well. So it's kinda something the city's been doing recently to just to try to make sure that we've got a project. We're not committing funds until we know we have something.

And there's no TIF funds being used for the project, so that's a good thing. It's going to be not not not a bad thing, but it's not gonna be a church where it's tax exempt. For example, a senior home owned by church could go in there, and we wouldn't be accomplishing our goals. So so that's those are reasons why I'm I'm in favor. So

When you talk about the affordable high up housing, their utilities will be their expense?

Maybe. So water and was it water and sewer will be on us, and then the other two will be on the tenant.

Okay.

Mr. Chairman, I just wondered if you could remind us. I think I asked these questions when we did it before. Is there a transferability if the developer were to sell the property? Does does the loan go with it, or does the loan get paid back at that point?

We would want it to be paid back if it was sold. Okay. So unless we came to this group and for some reason, you know, the RDU is willing to subordinate to, you know, a new lender. But usually, in these kind of situations, we want to see that

we won't pay back. Okay.

And are you able to say yes, sir? Is your intent to long term hold

the property? Yes, absolutely. Refine long term hold, excuse me.

You.

I I don't think we talked about this, but is any on the structure of it, is there any prepayment penalties for no? Okay.

No, we're happy to get the money back.

I wouldn't have spent the money.

I was just mentioning. You're talking about the value. I just wanna pull up the value. It's like, right now, the property's value, like, 212,000.

I suppose motion of second on the floor.

Yes. So we can vote. Rick Lumpke is an aye. I'm an aye. Aye.

Due to upstanding prior, I'm gonna upstate

again, please.

Thank you.

I'll vote aye. K. So we have five ayes and one abstain. Motion passes. Good luck to you putting together the rest of the pieces. Thank you.

Nice meeting you. Nice meeting you.

Cool. That's coming. Thank you.

That moves us down to our last item, item number 25DashO2386, review and possible action on a redevelopment authority real estate purchasing policy.

So over the summer, the council held their council retreat or workshops. And one of the things that came out of that was looking at ways maybe to have the redevelopment authority people to acquire. This kinda came from the situation we're talking where there's a property we had, the developer wanna do it for probably a similar sized project as this one. And we're working with the developer, and the owner ended up just selling the properties to somebody else because they wanted to close quickly. So it kinda stemmed from that.

Give me the opportunity for the idea to act quickly on these things. So they had property up, especially the way the real estate market is now. So what we did with that is we move forward and kinda we came up with a policy, which I already got a copy of attached to your agenda, and there's copies here. Did you grab one here? Hang on. Do you want one of these?

I don't

know if anybody else needs it. Thank you. I'm just trying to establish some criteria so there is a comfort level with the common council on the RDAs part of actual property that has a high development potential. So we kind of came up with some different criteria, and I'll go through each of them in the following slides just what both what they mean. So the first one is we adopted strategic plan.

That's really the guide for the whole city. And one of the strategies in there is adding workforce housing units. And then looking at these planning unit these planning documents, most of them have gone through the RDA with the exception of the comprehensive plan. So RDA did the Central city master plan. In that plan, there are a lot of sites set aside. Like, okay. This should be a housing site. This should be a mixed use site. And one of the sites that I just referenced that sold instead of for housing just for commercial, that was one of the sites that was identified in this plan as something that the city wanted to see redevelop. So it's pretty specific on these sites.

It gives us opportunity to cite this list and then that meets one of the criteria for acquisition. Also looking at the comprehensive plan, that doesn't really have a lot of site specific things, but there could be things in there where we'd wanna acquire a site to achieve one of the goals in that document. And then RDA also has worked with University of Wisconsin Milwaukee through a planning program on Saint Paul Avenue corridor plan. There's a lot of sites in there identified for redevelopment. Sunset West, another area that the RDA focused on as a few years back centered around the Midiola Soccer Complex and figuring out what can we if as that soccer complex grows, has more of those turf fields in the CIP for next year, there's going to be the pavilion with restrooms, concessions.

As that happens and that more soccer events and tournaments are coming in there, we're supposed see a high potential for West Avenue and Sunset to redevelop. So maybe sites pop up on there that would meet one of our goals for that area. Then here we at this leveraging additional funds. So there's a lot of different funds, and there are certain sites that maybe would score higher on these things. The reason I have these up here is Cobblestone, we leverage those Scott Stock Product Development grant for that site.

We didn't acquire anything. We actually sold property, one of our parking lots for part of that. But we were able to apply for a $250,000 grant through WEDC. We received that grant, and it's partially based on the location. That's a catalytic a catalyst project in the heart of our downtown that serves in the brownfield grants.

So maybe we're looking at sites that maybe have some environmental issues and specifically look at the site across the street from us where Mandel is developing. That was a site the city acquired and had used some brownfield grants to do site assessment and some cleanup on that. The Waukesha County Center for Growth Growth Fund Loans, have specific things they want those used for. It's a pretty wide net what they allow, but a lot of their funds are going into workforce housing. So and then home funds, again, that's run through the county, through the home consortium, and those can be used for acquisition and sub of those criteria on where they wanna use those and what it's for, typically, for affordable housing development.

And then kinda similar is locates location based site potential, you know, sites that we think have a really strong redevelopment potential. Say all the sites are on redeveloped, and there's a kind of a vacant site or site with a underutilized

building there,

and there's an opportunity to acquire that because we think that a developer maybe developers have talked to us about that site. So it's something that's got a redevelopment potential that we're not gonna have to hold on to for a long time. You know? That kinda goes to strategic location. But we looked at that as if there was a development, but there is a parcel right next to it that we thought can maybe make the development layout better or provide access for that, that we can acquire properties like that meet that criteria. And then there's kinda similar to the location slide before. There's certain areas that score high for low income housing tax credits every year that change a little bit, and we'll get developers that'll look they have their maps, and they say, they'll come reach out to Jennifer and me and ask us, hey. Is there anything available in this area? Or, hey. We saw this site.

We'd like to acquire it, but going through that LIHTC process is very long. And that's what the Saint Bill and I talked about in Saint Paul. They wanted to do low income housing tax credits, which takes quite a while to get through the process of that. So if it scores high for LITEC, that could be a a criteria that we'd be, like, look at the site. Have a developer who wants the site.

The property owner wants to sell it quickly. We acquire it and hold on to it until their project is has gone through the process. Tax incremental finance districts, we've got the sites in there, there's potential to use money from out of the TID to help finance some of these things. So a lot of our tids now are smaller scale, like single property or single development. But we do have some larger scale ones that, you know, one that's that surrounds the downtown.

So there's opportunity. That'd be something that could be a high criteria. And then LMI, that again provides access and neighborhood revitalization revitalization strategy here, which also ties to LMI. It just has a lower income rate than just the LMI neighborhood. We have three of those in the city.

So in there, then you're getting access to community development block grant funds. So that's another reason for that criteria. And then could be something for municipal uses. Say it was a parkland or we need it for a utility, maybe to serve a nearby development of some, you know, some sort of utility function. Right away or easements to provide access to maybe a development site where we have a developer that owns it and is trying to acquire land to make sure that they have the proper access or easements for utilities.

And then put this in as below micro rate acquisitions. We're doing a tax foreclosure property, but we can workforce housing developed on a site that was foreclosed upon, and we can probably get that at a lower try to get that at a lower cost than market rate. And then maybe sites of environment actually where buyers, you know, we could access those brownfield grants that buyers willing to sell discount for that. So those are some of the criteria. And then moving on from there, prior to closing on that, just a lot of due diligence as all in the document, making sure that we're looking at the getting environmental assessments, site visits.

And then for each property, you know, getting an appraisal, their broker opinion, and value on that. Just and then we'd run it through city attorney's office and our finance department just to really make sure that the sites we're buying can be used for what we want it for. And then the development agreements, if we're acquiring a site, but a developer is going to eventually buy the site, tying it to some sort of development agreement or or offer to purchase with the developer to make sure, okay. We're buying the site. I we're trying to get make sure they're gonna buy it from us after we've acquired it.

And then a post purchase, you know, we'd report to council any any activities on real estate acquisition. We go to common council. I know we'd have to make determinations. How do we do the property? Are we we have if we have a developer in mind, we're just gonna sell consolidate right to them, or we can use just list it like it's, you know, it's like regular property, or we could do an RFP pro process where they would submit proposals to the redevelopment authority for the site that we we own, and the RDA could then

determine which proposal they wanted.

And then the city would be responsible for mowing the lawn and any issues if there's a building on there keeping that building in good order. And then, also, we'd be seeking additional funding, looking at all those ones from the criteria. How can we use these funds? Are there other funds we can tap into? I think that's kinda what I had for the policy. You know, copies of it. I'm just looking for some input on that. And then the next step would be if the council are comfortable with with changes being made tonight, we can send that forward to the common council. Would not be at the next one, which is tomorrow night, but it'd be

at the one two weeks from now or three weeks from now, actually.

Yeah. Three weeks. Two weeks. So

as I read through it, you're gonna do your the the redevelopment of our of is gonna do all their due diligence. And then they're going to come to us to approve an offer. Then you would make an offer, which would then, if accepted, would go to common counsel for would not go to common counsel for approval. I

That's what we talked about at the council retreat is that purchase would just live in this committee. So looking for the council to give the redevelopment authority the authority to purchase properties under certain guidelines.

And then The due diligence. We we make

the offer on the property, and then we have a due diligence period where we do all those things. That way, we can react quickly, have an offer on the property, but it's contingent on a certain list of due diligence items. And then

we can And where where would the funds come? Because, you know, I I that's the thing that I have the have the problem is is normally, the funds go to finance, and then they go to common counsel for approval. Now if we have the funds available in one of our four categories, are those the funds you're thinking of using? Or

No. No. So we

Where would you get the funds to be able to do this from? That's that's that's that's what I'm

just Yeah. What we've discussed is interest on on ARPA funds. K. Also, if the city sells a different property, I'll say across the street, when that actually closes itself, money would go into this fund for real estate acquisition. The other fund that we do have that could be used for portions of it is that development fund. None of the other funds would probably work, but the development fund, one of the things in there, we're gonna look at for next week is revamping that program a little bit on what those funds can be used

for and who can use

them for what. And one of the categories in a couple is the RDA or common council can use those funds for act like, to supplement acquisition. There's not a lot in there to acquire a bunch of property, but those funds can be used for that under the current under how they're currently designed and how we're gonna propose to change this.

So right

now So there's, like, three areas right now besides the development fund. So interest on ARPA funds, the interest on the city stabilization fund, and then the net proceeds from selling city property. And that would be the seed fund for a purchase account that would be set aside for RDA to be able to purchase property.

So city property is a school district considered city property?

No. But water utility properties are, but most of those revenues go back to the utility. But if for some reason, we were sharing those, that would that would potentially kill. K.

So sales of city property, for example, across the street?

Yeah. Over the years, we've had other stocks.

Interest on our RDA loans.

On ARPA. On ARPA. The ARPA funds that we had, those were invested and so there's been interest accruing on those on that those funds, the federal ARPA funds.

That would be the ARPA funds that are allocated to the RDA or interest on all ARPA cities Okay. Funds.

So that ARPA funds are coming to an end, but there's interest that was accrued on them over time.

And there's no restriction on that

interest? Correct. And interest from the city has a fund that's what we call stabilization fund that allows us to stabilize the tax levy. Those dollars are also invested, so there's interest accruing on that stabilization fund.

So So it's interest dollars. The source of the funds, that obviously has to come to counsel for approval to for you to latch on it. Once you latch on it, it's it's there. And then as we keep selling those properties with the interest and things, it can hopefully grow. Correct. For example, if we when we approve this loan for the 1% out of the that would funnel in there over thirty years.

Right. So that interest that on those loans that you've been giving out, like Jeff said, in the development fund, that would be available also for purchasing.

And with within that development fund too, not only interest, you could use principal, let's get it back to. So as we receive principal interest payments, that all could kinda go towards an acquisition.

How much money are we talking about in those buckets roughly right now?

The two interests, you know, the interest on those two accounts is about 1,200,000.0.

Really? That much? And

then there from there, it would be you've got the development fund and then, say, this vacant land even next to City Hall where the old parking lot was, say, we sell that, you know, then those proceeds would

supplement that. So for example, if this would if this program would have been up and running six months ago, you could have bought that property with the where the bug center is and the one next door, and we could have turned that into a couple million dollar Yep. Investment.

Yeah. And that was our

That's all.

Our heartbreak project is Yeah. Those two buildings at the end of Prairie on Saint Paul, the Bug Center and the one next to it. Yeah. We're working on a redevelopment plan with a developer and then the owners just sold them to somebody that's gonna use those buildings as is. We don't gain any tax base. We don't gain any housing. Yeah.

So so this policy will need to be approved by the common council. And at same the time, will they also be approving these funding sources? Yes. As as part

of that. Yeah. It would come together as part of that.

Okay. I like the idea of having that immediate boom As long as the funds are already predetermined in there, I don't like the idea of going out speculating and, well, we're gonna have to take a loan for this million dollars. And then now we buy this property. But if the funds are already there, which you're seeing, we have a $1,200,000 approximately, that's good seed money that's already there. It doesn't have a purpose.

I mean, the only way that we're gonna get net new construction in five years from now when all the vacant land is used up is these brownfield and redevelopment potential. It's the only way it's gonna happen. And if we don't do something, the development is gonna go to the town of Waukesha where it's cheaper, you know, in a in a in a cornfield. Mhmm. And then we're gonna be Milwaukee because we don't have no funds.

And Wauwatosa is in the same thing. You know?

So rejected is just try to put some structure around that so that there's some comfort level with allowing redevelopment authority to have the authority to expend those funds. And so if you think that there should be something changed or, you know, added or attracted from the criteria that you put together, that's perfectly fine. We're just considering it a starting point.

So you'll be proposing

the benefit

of what this will be. Correct? Yeah. So is the council gonna hear the real benefit is going to be an increased value for the

community? Okay. So you're gonna hear that

several times.

Think they're doing a workshop to it.

Well, most most of the council, at least in my six years, has been pounded into net new construction is the only way we're gonna go. So there's two or three new ones that have only been there four months from now or for four months now, but I think they've heard it a couple of times. But I know in the six years I've been on the council, every meeting we've ever had, retreats and such, it's and we've heard from you guys that this is what we gotta do is net new construction and value per acre because there's not many acres left.

And Gotta make the most

of Gotta make the most of what we have. You know? One quick question. This gentleman was

here today. Could he convert that to a condo and still continue his loan?

Yep. As long as they're for affordable.

Yeah. He could choose to do that.

And it would not affect the

loan. Right. As long as he kept the payments in that affordable correct?

Right. As as he would sell them, then I assume that the loan would get paid down.

On that on that one that is sold.

Sure.

That's an interesting thought.

Yeah. I'll rental for a period of time and then boom. Yeah. So Mhmm.

It's the exit strategy for almost every multifamily developer is if this market changes and if that becomes more lucrative, that's how they exit a property, you know, or they sell it, you know, as a rental. But so they design them that way.

Is that why they buy they build them all within the individual gas and electric?

Typically. Yeah.

Typically, yes. Because they can't do it if it's if it's common.

Yeah. And we've seen buildings convert from rental to condo at different points in the economy. You know, it happens.

You should build them with separate water if they're gonna do that

too as

as a condo

owner. But it is what it is. No. You just take long showers and get your benefit. Oh, why? I'm just saying. No. I what can I say?

You gotta pay to heat the water. Yes.

Yes. So does it hurt us to do it that way or it's converted over?

I don't think so because as long as he's still selling them to people that meet that income requirement, you're still satisfying a need out there Mhmm. For affordable housing. You know, whether it's rental or ownership, we have a need on both sides.

It's just a realization of their economics is gonna be quicker. Okay. So

I had a question about the document. As I read this, it makes reference to RDA staff and there's an awful lot of activities that I wouldn't assume the people on this side of the table would be doing. So there's a lot of work. Is that Jeff? Jeff. Jeff. I just tell you.

You're talking about like you're talking about like the applying for grant type things or all the due diligence things?

Yeah. All all of just ensuring all the criteria and policy is followed. I mean, that's all we haven't done and then there's a recommendation brought to this body.

Yeah. And then once you make an offer, we'll sell more with you on due diligence part after. But once you guys made an offer on it, agreed that we can do that. We'll take these items and then once we acquire it, we'll coordinate. Like, Jennifer, I'm gonna go third and mow the grass. We'll coordinate with someone else to do that.

I was just surprised to see the term RDA staff.

Yeah. Okay.

Thank you.

When we talk about the purchase of property that we have to do, does that mean any type of property or does it? Okay.

Yeah. We thought a long time about that and we decided maybe not to limit ourselves because you don't know what opportunity might arise.

That's exactly where it's going.

And the tax foreclosure around, you know, every year homes go through tax foreclosure. And there might be an instance where we think this is a home that's easily rehabbed and put back on the market and, you know, it might be an opportunity.

Send somebody to the share sale and bid. Is that how that would work?

Yeah. Basically.

I think that's great idea.

Yeah. Well

So we didn't wanna limit ourselves that way because you don't know what might come up. Right.

You know, like Sunset Drive to is potential for commercial acquisition there would be for commercial property as opposed to workforce housing.

So the interest that we have out right now, can some of that go into this fund?

Yeah. So

Or is it dependent on what bracket it came on?

Yeah. The development fund that you're gaining interest on with the loans you've already made Yeah. That would all be available to as it comes back in, you know

Mhmm. To be

used in And principal don't have to go back to their original bucket is what you're saying. Just the principal.

Is that right? The RDA can choose to spend it in that way if they want to.

Really? Yeah. From from any of the four funds?

No. Just the Just the redevelopment? Just the development. Affordable development. Yeah. Right. Yeah.

Yeah. So if if once having that done done by Oaks, so that's gonna free up $800,000. So that money can be used by the RD to acquire something.

The one caveat is it has to be used for affordable health. The development would be have to be affordable housing. Yeah. You know? So purchasing something with that in mind, then we could use those funds.

That makes sense.

Could you put the four buckets up again?

Thank you.

So it'd be that second from the right.

Yeah. Affordable housing development fund.

So there's 1.2 in in theory, two over two.

But we just In total,

1.2 on commission. Yeah. There's 20,000 of that.

Right. Right.

So there's loans that are in repayment.

So there would be basically 800,000 coming from, Habitat for Humanity within the next year. Plus interest. Interest.

3,000.

And then then, we just allocated 720, so that would leave 420 remaining from there.

Okay. I'll go to let's go here. I can pull a breakdown. So with that yeah. We have the the sorry. Another and now the other one in there showed how much you had drawn.

Yeah. But those funds are always coming back in Mhmm. Getting interest. And

also with that too, if we have a tid that's closing and the council decides to leave it open for that affordable housing, that could that would also we're closing? So when we so this money from this came part of it came from ARPA, but other parts came from TIF affordable housing extension where the council extends the life of a tax incremental district by one year. And all that increment from that then goes into 25% goes into the the homeowner rehab program, and the other 75% has been going into the development fund. So so far, we've used it on two kids, 14 and 22. So as as closings come up, we'll look at it.

We review it with finance, and we we make we decide what we if we think we should leave it open, then the common council ultimately has to adopt that resolution to keep it open. The good thing about that is we get all the increment, you know, so the increment that would have, you know, So the schools, WS, CTC,

and and the county that goes into our program.

So in the future, that would be another way to replenish the fund, you know, as kids close. And

Yeah. Those are pretty, you know, decent sized contributions when you have some of these big ones. Like, weighted 20 to 22, I think. It was almost $900,000.

I like this, guys. Way to go. Yay.

This is putting little pieces together.

Yeah.

It's gonna be fun.

Yeah. On

the financing side, does does the money move out of the bucket it's in now into, like, a special revenue fund that's specific for RDA acquisition?

Yeah. Okay. Yeah. So, like, those interest funds would get transferred over to that special RDA fund. And then we we wouldn't really have to transfer your, you know, development because it's already dedicated to you. But, yeah, those interest funds would get transferred over. Okay. Or any net proceeds from a sale, a property sale or something would go into that

fund. Okay.

And I'm assuming the rest of staff, in particular finance, and the city administrator are versed on this and have given their blessing?

Yes. Correct. K.

Because the the stabilization fund is the one that's of particular prickly nature to me because, again, knowing what I know of the financial situation that the city is facing down the road, I'm concerned that those funds might be needed elsewhere. But Yeah.

It could also you know, that number that I gave you is what interest it has accrued to date. So it also could just be a onetime infusion and then

That's I guess that's what I was kind of asking. Yeah. Is is that money you know, whatever money we decide to allocate out of those buckets is going into this fund, that's gonna be the seed. Or are they staying in that fund and continuing to grow, and we just allocate them as needed? That was what I was trying to Yeah. Understand.

We didn't get into that specific of the logistics of it. And so

yeah. Can we answer that before it comes to counsel? Because it Yeah. It's a good question.

Because if

we can

if we're

not using it, maybe

in there money on it. That transcript's all we needed.

Right. That's what I was trying to understand. The the operational money side of it.

Yeah. Yeah.

I'm in favor of this real estate purchasing policy because I think it it opens up a lot of quick things that we can do to solve. So I don't know if you're ready for a motion to approve this to go to council or if you wanna wait another thirty days.

Up to you guys.

Yeah. Let's get it.

Do you have any I

like that motion that we presented to

K. And I second that motion.

K. Why

wait? Any other discussion?

No. They didn't propose it tomorrow. I'm gonna No. Definitely not.

I'm a yes vote. I'm a yes. Aye. Yeah.

Aye.

Yes. That's unanimous.

So it won't be tomorrow night, but it'll be two weeks later. The first meeting in November. Good.

Good. Good. And are there any that that's the end of our items. Are there any communications and referrals?

No. There are no communications tonight or referrals.

And I make a motion to adjourn. Or we're adjourned.