OAK CREEK – Those looking to live in Oak Creek’s Drexel Town Square will have more apartment options in the future.
The common council approved a tax incremental financing (TIF) loan and grant assistance for the second phase of the Emerald Row apartment development at the Feb. 7 common council meeting.
Alderman Mark Verhalen was the only council member opposed citing “too many variables.”
Property owners in TIF districts still pay taxes but a portion of what is paid goes toward the cost of development. City Administrator Andrew Vickers said the city is using TIF to extract the larger goals out of the project that otherwise the city wouldn’t get.
“If you give us a more desirable product for the city, we have this tool to incentivize you,” he said.
According to the agreement, the city will loan nearly $2.8 million to the developer, Barrett Visionary.
For the first four years, the developer doesn’t have to make any payments. Vickers said a developer “mezzanine” payment using surplus cash from the project is going to allow the city to amortize the loan to its 20-year max.
The city is also giving the developer a $4.5 million grant for the apartment project located on 6th Street immediately west of the Oak Creek Civic Center. According to Vickers, the city’s grant will help to offset the cost for a surface parking lot versus the cost for all the needed concrete for an underground structure.
Vickers said it was the partnership between the city and developer which allowed the underground parking to work for the development. He said this development gives the restaurants and businesses of Drexel Town Square a regular base of support.
“Not only is this a good business deal for TIF and taxpayers, we’re finishing the residential components of Drexel Town Square in the exact fashion and vision we had for it, a very urban area with high-level density.”
Vickers said in exchange for the $4.5 million grant the second phase will have an initial value of $26.2 million including 242 luxury apartments and underground parking.
“It’s a similar product to what we had before,” Vickers said. “This is really, really high-end.”
Rick Barrett, the owner of Barrett Visionary, said he appreciates the hard work of the city. He said the first phase of Emerald Row is “fully stabilized,” calling the whole project “amazing.” He added that he was glad to be working with the city and plans to stick around.
“I’m here for the long haul,” Barrett said.
The second phase of the development has a minimum assessed value of $26.6 million by January 2020 with an additional $9 million of assessed value by 2024.
The estimated net tax revenue over the 20-year amortization of the loan is nearly $6 million.
Vickers said expects a groundbreaking no later than July 2017.