Two emerging developers are rebuilding parts of Milwaukee’s central city, one house at a time.
Developers seek to rebuild Milwaukee neighborhoods
Two neighborhood-based developers are bringing separate affordable apartment projects to Milwaukee’s north side — which city officials hope will be a model for other investments. ❚ The developments together will create about 70 new rental units near Washington Park and Garden Homes Park. That’s a relatively modest amount. ❚ But their impact is expected to go beyond those initial projects because of how the new housing units are being created — and who is creating them. ❚ “It’s meaningful,” said Maria Prioletta, the Department of City Development’s redevelopment and special projects manager.
Both developments involve buying vacant homes, which the city acquired through property tax foreclosure, and renovating them into rental housing that will again generate property tax revenue.
Those “scattered sites” projects help the city reduce its inventory of just over 900 foreclosed properties — which spiked after the housing bubble burst in 2007.
Both projects will focus on singlefamily homes and duplexes that are located relatively near one another.
That helps maximize the impact in those two separate central city neighborhoods.
Also, both projects are being led by emerging developers with ties to Milwaukee’s north side.
And, by buying and renovating existing buildings, both developments will not just provide additional affordable apartments. They also will restore dozens of blighted homes that are hurting their neighborhoods by lowering property values.
“It’s a recipe for a really high-quality neighborhood development that goes beyond the real estate,” Prioletta said.
Working to fix an entire neighborhood
Both developments recently received a key financing source: federal affordable housing tax credits.
Developers that receive tax credits must generally provide at least 85% of a project’s apartments at below-market rents to people earning no higher than 60% of the local median income.
The tax credits are sold to raise cash, with developers seeking bank loans and other funding sources to complete their financing packages.
The credits are provided through an annual competition — and there are usually far more developments applying than there are available tax credits.
The Garden Homes Neighborhood Initiative will use the tax credits to renovate foreclosed homes into about 30 rental units centered around Garden Homes Park, 2600 W. Atkinson Ave.
The development team includes Rice Lake-based Impact Seven Inc., a nonprofit corporation that has created other affordable housing in the Milwaukee area.
But the effort is being led by 30th Street Industrial Corridor Corp., which focuses on attracting businesses and improving neighborhoods along Milwaukee’s North 30th Street corridor.
That nonprofit group has been working within the Garden Homes neighborhood since 2016, said Cheryl Blue, executive director.
Those efforts involved meeting with over 200 neighborhood residents and dozens of organizations to build a grassroots coalition, Blue said.
There’s been a focus on creating affordable housing — while also renovating dilapidated neighborhood properties
That includes several boarded-up houses in the Garden Homes Historic District that “look like crap,” Blue said.
The historic district recognizes the nation’s first municipally sponsored public housing cooperative.
The cooperative was built in the 1920s by Mayor Daniel Hoan, and includes rows of two-story Colonial Revival homes. The development’s central green space later became Garden Homes Park.
While built for white people only, the houses eventually began attracting black homeowners — many of them working at the nearby A.O. Smith Corp. manufacturing complex.
But, when that company and other employers began cutting jobs or moving operations to other communities, the neighborhood saw rising unemployment, crime and other problems, Blue said.
Blue’s group, working with neighborhood residents, businesses, churches and organizations, created a 2018 plan to improve the area. Christopher Boston, pastor of Lamb of God Missionary Baptist Church, helped facilitate that work.
And that led to the proposal by the corridor corporation and Impact Seven to buy 25 city-owned, single-family homes, duplexes and vacant lots for $1 per parcel.
That sale, which the Common Council and Mayor Tom Barrett approved in November, is to be completed this fall after the developers obtain a bank loan and other financing sources to go along with the tax credits, Blue said.
The plan is to then begin renovating the vacant homes, with the first rental units available for lease by spring 2021, she said.
A potential ‘game changer’
The plan marks the first time Blue’s organization has developed housing.
She said Ted Matkom, of Gorman & Co., helped the corridor corporation successfully compete for the tax credits. The credits are expected to provide $4.7 million for the $8.4 million project.
Matkom, a corridor corporation board member, is Wisconsin market president for Gorman. That Oregon, Wisconsin-based development firm’s projects include scattered site affordable housing units developed over the past decade on Milwaukee’s north side.
The city’s role includes providing a matching grant of $240,000 to support the project.
While it’s just 30 housing units, the continued development of additional decent, affordable housing — with buyin from neighborhood residents — can be a “game changer” in Garden Homes and other 30th Street Corridor communities, Blue said.
“This is a model,” she said. Prioletta agreed. Neighborhood residents “are the folks who will take pride in the housing, who will help find tenants and who maybe will live there,” she said.
Showing ‘a different face’
Meanwhile, FIT Investment Group LLC is leading the effort to renovate several foreclosed houses, duplexes and small apartment buildings into 43 rental housing units east of Washington Park, 1859 N. 40th St.
The development team, including CMS Contracting LLC and Lansing, Michigan-based Cinnaire Solutions, will pay $1 for each property under a proposal that received council approval in December.
The $8.5 million development is getting about half of its financing through the tax credits.
The developers are seeking other financing sources so they can complete their purchase of the city-owned properties and begin renovating them into rental units by early 2021, said Chris Laurent, Cinnaire Solutions president.
The first units should be available to rent by late summer 2021, he said.
FIT Investment is operated by Abiola “Michael” Adetoro, an electrical engineer who’s renovated other properties in the Washington Park neighborhood.
His latest development, known as Washington Park Scattered Sites, will help Adetoro “really grow his capacity and really grow his business,” Prioletta said.
Adetoro is a graduate of the Associates in Commercial Real Estate program, which helps minorities launch commercial real estate careers. His program mentors included Laurent, Matkom, Mandel Group Inc. executives Bob Monnat and Barry Mandel, developer Robert Lemke and Mark Eppli, then a Marquette University real estate professor.
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He and his wife, Suzanne, have bought and remodeled several Washington Park neighborhood properties, including a building, 3801-3813 W. Vliet St., that houses Pete’s Pops and other commercial tenants.
The partnership between CMS Contracting and FIT Investment is designed to do something with more impact than their previous projects, Adetoro said.
Such catalytic investments help raise property values for other neighborhood home owners, he said.
The developments also “show a different face of the community” beyond the boarded-up homes often seen in Milwaukee’s central city, Adetoro said.
People who rent renovated houses often stay there longer, and do a good job of helping maintain those properties, he said.
“People feel like they have a sense of ownership,” said Adetoro, who hopes to do similar projects in the future.
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