JSOnline: Developer seeks city financing for downtown luxury high-rise
New Land Enterprises of Milwaukee is planning to develop a 19-story, luxury apartment building on the northeast corner of Kilbourn and Van Buren, where Edwardo’s Natural Pizza once stood.
New Land is seeking financing from the City of Milwaukee. In addition, the firm is also seeking a $50 million loan from private lenders. Love Funding Corporation, a commercial mortgage banker and a union-sponsored investment organization, is providing the loan.
Milwaukee’s Common Council appears to be in support of this proposal as the project will employ union construction workers. However the Department of City Development (DCD) objected once New Land requested city financing. According to the DCD, New Land would be borrowing the entire amount (from the city and private investors) to fund this project and wouldn’t have a cent of their own funds in the project. Therefore, if the apartment development fails, the city and the investors will be the only ones at risk.
The DCD wants to see more of New Land’s funds in the project to protect the city and the private investors in case the project were to fail. Common Council members want to see more development in the city to help spur economic growth.
Tough call. Both sides make valid points. What side are you on?
My Thoughts
The residential real estate market has shifted. I’d feel differently about this issue if we were talking about a condominium development. However, in the past few years, we have seen many apartment complexes turn into condominiums overnight. We do have a shortage of apartment complexes in the city and there appears to be demand for them. It’s easy for me to say today that New Land’s apartment development is guaranteed to be a success based on what I see today. Who knows what the housing market and the economy will look once this development is completed? That’s the frustrating issue with real estate. Real estate responds very slowly to market conditions. What I do know is that New Land has contributed greatly to downtown Milwaukee’s skyline during the past ten years. Most of the tax base that the city enjoys today is due to New Land’s vision of downtown.
As someone who negotiates every day, perhaps finding common ground would be the simple answer. For starters, how much money would the DCD like to see New Land fund for its own apartment development?
Tom Daykin, writer for the Milwaukee Journal Sentinel, provides details of this apartment development as well as differing viewpoints of the DCD and Common Council. Click here to read more about this controversial development>>>
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Labels: Economy, Real Estate
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