Panel endorses $1 million of city cash for MATC student housing
City financing to help convert the Milwaukee Journal Sentinel’s longtime home into Milwaukee Area Technical College student housing and other new uses has received a preliminary approval.
The $1 million financing plan for the $54.3 million Journal Square development was unanimously endorsed Tuesday by the Common Council’s Zoning, Neighborhoods and Development Committee.
It would provide annual payments from Journal Square’s property taxes to development firm J. Jeffers & Co. over 10 years. The full council is to review the proposal at its July 28 meeting.
Jeffers & Co., which owns the buildings, in November unveiled conceptual plans for Journal Square.
The six-story Art Deco main building, 333 W. State St., is to become Journal Square Lofts, featuring 116 market rate apartments and around 8,800 square feet of street-level retail space.
Its addition to the east will be renovated into 77 apartments for 189 MATC students.
College officials say demand is strong for student housing near the downtown campus, which has 22,000 students.
Committee members said the city’s investment in the project will help preserve historic buildings, while also providing affordable housing for MATC students — many of whom live in Milwaukee’s central city.
The student apartments’ rents will be 20% below market rents of comparable student housing in the downtown area, according to an MATC report.
The seven-year lease with the college calls for monthly rents ranging from $645 to $795 per bed in the first year.
Ald. Milele Coggs, a committee member, said she hopes other developers will make investments tied to the downtown area’s colleges and universities.
“I think it’s an asset we have not fully taken advantage of until now,” she said.
Other developers have looked at the Journal Sentinel buildings but haven’t moved forward on their plans, said Danielle Bergner, Jeffers & Co. chief operating officer and general counsel.
“These are really challenging buildings,” she said.
The firm’s financing for Journal Square includes $29.9 million in commercial loans, $12.9 million in state and federal historic preservation tax credits, $8.4 million of equity cash and a $2.1 million deferred developer’s fee, according to a Department of City Development
report.
Renovations are to begin in September on creating the student housing. Those apartments are to be completed by August 2021.
Meanwhile, work on the market rate apartments is to begin by the end of 2020 after the Journal Sentinel moves out.
The newspaper plans to move its roughly 250 employees to the 330 Kilbourn office complex, 330 E. Kilbourn Ave. The Journal Sentinel’s owner, Gannett Co., sold the underused buildings in October for $8 million.
There are no plans yet for an attached, four-story building that once housed the Milwaukee Sentinel, 918 N. Phillips Ave. It has been vacant for several years.
The committee also unanimously endorsed a plan to sell several vacant lots, totaling 1.1 acres, at 3317-3349 N. King
Drive and 456 W. Concordia Ave. for $25,000 to investment group Five Points MLK EDC LLC.
The Five Points group, led by the nonprofit Martin Luther King Economic Development Corp. and KG Development Group LLC, plans to develop a five-story building with ground-floor retail and 55 apartments on the upper floors.
The development would include community space, said Nicole Robbins, Martin Luther King Economic Development Corp. executive director.
Five Points plans to apply for federal affordable housing tax credits in the 2021 competitive round.
Developers that receive those tax credits must provide at least 85% of a building’s apartments at below-market rents to people generally earning no higher than 60% of the local median income. The annual competition usually awards tax credits in April.