Village Could Provide up to $10 Million for Oakland Avenue Development

Rough estimates released Friday have the village looking at up to $10 million in support of the , with a new village tax district.

A financial consultant to the village, Ehlers and Associates, released financial specifics on the proposed project at a Community Development Authority meeting Friday. The plans addressed how the village expects to support the $32 million, 84-apartment development, which includes a new home for Shorewood's sole Walgreens store. Walgreens has only 90 guaranteed days at its current location, 4081 N. Oakland Ave., . The development slated for the Sendik's parking lot, 4027 N. Oakland Ave., also includes two parking structures.

CDA officials said village support would likely be more around the $7.5 million range in grants and loans for developer, the Mandel Group. However, Mike Harrigan of Ehlers and Associates recommended the village look at around $10 million to cover any additional costs.

The Village Board to help establish Tax Incremental Financing District No. 4 to finance improvements related to the proposed development.

The new taxing district would actually overlay onto TIF No. 1, but that district has to close by year 2022, which wouldn’t allow the village enough time for the new Sendik’s parking project to pay for itself.

If everything works as it should, the village’s only loss would be the portion of the $7.5 million to $10 million in grants it decides to provide Mandel, CDA Chair Pete Petrie said. The loan portion, which is estimated to be 17-year note, would be paid back to the village by the developer using revenue from apartment rent and Walgreens’ lease. Officials noted at an earlier meeting the new TIF district is expected to have a 27-year lifespan, maximum allowed by law, and would only include the parking lots and not the actual Sendik’s store or any other businesses off of Oakland Avenue.

"The real cost to us is the grant," Petrie said.

The remaining portion would be funded through a loan Mandel has secured with Wisconsin Housing and Economic Development Authority and some investment according to Petrie. That loan required the development have low-income housing. Most of the units would rent for around $1,200 to $2,000 per month; 17 of them would be set aside for moderate- to low-income renters and would rent for $775 to $1,200.

A TIF district is a mechanism used by communities to spur development. When a district is created, a municipality borrows money to pay for various public improvements related to development within the district. Once the development is built, the additional property taxes generated within the district are used to pay off that debt.

Officials plan to discuss a parking study that is being conducted at the CDA's next meeting, May 6. Mandel and the village have been in talks with a consultant regarding studies of traffic and parking in relation to the new development, Lincoln said.

The developer said it could break ground on the project as soon as next fall and has the rights to purchase the Sendik's parking lot property from owner Katz Properties.

Officials have also said they have already started to address some of the issues residents have had with the development, including one raised by North Shore Presbyterian Church that the six-story building would dwarf the church and cause problems for solar panels on their roof.