Shorewood finalized an agreement with Milwaukee developer the Mandel Group late Monday for a retail and apartment development set for the two parking lots near .
Before a mixed crowd of around 50 residents, some of whom opposed the development plans and others who praised the village and developer for the project, the Village Board accepted an agreement. Shorewood will help finance the $34.81 million, six-story building which will include retail space for , 84 apartment units and two parking structures.
Under the agreement, the village will provide a $4.12 million grant to be recovered through property taxes generated from the development and a $3.54 loan the developer would pay back with revenue generated through rent. The village will incur another $1 million in fees and other costs. Shorewood will also finance an additional parking level for $1 million out of its special tax district No. 1 and funds from its parking fund. The agreement defines the village won't be obligated to provide more than the roughly $8 million it has outlined.
The chunk of the project will be paid through a $21.67 million Wisconsin Housing and Economic Development Authority loan Mandel has secured, according the village's financial consultant, Mike Harrigan of Ehlers and Associates. Under the terms of the loan, Mandel will provide 17 affordable housing units, 20 percent of the total. The remaining units will include a mix of one-, two- and three-bedroom units.
About $4.4 million in investor equity will fill the remaining project cost.
The village plans to create its fourth special tax district to help fund the project. Village Attorney Ray Pollen said the development agreement is contingent upon the Joint Review Board’s approval of the creation of the tax district. The Joint Review Board includes one member from each taxing district including the village, Milwaukee Area Technical College, Whitefish Bay School District, Milwaukee County and the
The village estimates it will recoup its grants and close the special tax district by 2030, after which the property will produce more than $500,000 in property taxes per year. The village, school district and other entities that receive revenue from Shorewood taxpayers won’t see any additional tax revenue until 2030.
Becuase the development doesn't meet the village's zoning rules, the Village Board also approved the creation of a Planned Development District encompassing the development, giving it unique zoning rules.
The development would be 76 feet tall — 16 feet taller than current zoning rules allow. It would also break setback requirements, with the building façade less than 20 feet from the curb as currently mandated in the district.
The board’s action paves the way for Walgreens to stay in Shorewood. It has a one-year extension at its current location, 4081 N. Oakland Ave., but the agreement allows the owner of the property, Roundy's, to issue a 90-day termination notice at any time, said Jeffrey Metz, a spokesman for RE Enterprises, a business consulting company.
The retailer has searched for a new village location for 10 years. Roundy's owns the rights to the Walgreens and former Open Book property, .
Walgreens will move south across East Kenmore Place to occupy the northeastern corner of the Sendik’s parking lot, 4027 N. Oakland Ave. It would also add a drive-thru on the west side of the store, alongside the alley.
Mandel has said it could break ground on the development as early as this fall. Construction of a parking deck behind or west of Sendik's would start first and would take around three months to complete, said Mandel Senior VP Richard Lincoln. Construction would then move on to the main building occupying the Sendik's parking lot and Walgreens would move to its new location in fall 2012. The whole project would wrap up in 2013.