Mayor: Apartments will be affordable, not free

Misconceptions about WHEDA grants addressed

By Paige Brunclik

Posted: April 25, 2012

City of Oconomowoc - News of a developer earning state tax credits to rehab the former middle school into apartments had many in the community excited. The news was exciting enough to warrant a visit from Gov. Scott Walker, who announced the credits that will turn the vacant building into housing. But some people might be confused about what type of housing is in the works.

"I hope to god this fails as it will bring in the kind of people Oconomowoc doesn't need," wrote "slice3300" in a comment on the story on our website, LivingLakeCountry.com.
"Maybe we look into a petition for turning this into maybe an elderly care facility or daycare. This is not going to be good for the surrounding home owners and it will just be a matter of time before this is little Milwaukee/Waukesha in a smaller area," wrote otowngal.

The comments struck a nerve with Mayor Jim Daley, who met with a group of reporters Tuesday afternoon in hopes of using the media to help clarify the situation.
Keystone Development was awarded Wisconsin Housing Economic Development Authority (WHEDA) Affordable tax credits. The credits are not for welfare-type, low-income housing, Daley said. Rather, the tax credits were for a development that must provide "affordable" housing based on the county's median income. Based on information provided by Keystone, one-bedroom units that are at 50 percent of the county median income will rent for about $600-$700 a month. The target income range of a tenant is $20,000 to $45,000.
"This project is aimed at young professionals with salary limitations. They will get a slightly better rental rate - not a free rate," Daley said.

Director of Economic Development Bob Duffy gave examples of other recent similar and successful projects. Those include Appleton's 54 Riverfront affordable downtown apartments and Riverworks Lofts in Milwaukee, a $6.8 million project that received WHEDA help.

"As a developing community, there is a need for the entry-level person to have accommodations and an attractive place to live. This is the opportunity to attract higher-level residents to the community, who will hopefully remain here," said Daley.

The middle school apartment project was pitched before Keystone by developer Gorman & Company, which sought to do the same thing: reconstruct the school into affordable apartments. The WHEDA grants are very competitive, and Gorman did not land among the recipients. Keystone was successful among the 74 applicants seeking WHEDA grants for developments.

"This maintains the historic and architectural style of the building, and it's much better than bulldozing it," said the mayor.

He added that there will be no negative effect on neighboring homes. "It will be neutral to positive," he said.
Daley said the news last week should be considered a win all around. The School District is able to unload a vacant property and gain $1 million from the sale. And the city will soon realize increased tax revenues, which help taxpayers overall, Daley said.
"With state-imposed levy limits things, the only way we can continue to offer services in the city that offer a better quality of life is through growth," explained City Administrator Diane Gard.