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Presentation by Samapa Development Company and consideration of approval of a proposed term sheet with for the conversion of the Sonesta Hotel to a multi-family apartment building
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Submitted by:
John Ruggini and Mark Hammond
Department
Finance and Development
A. Issue
Waterfair Apartments LLC proposes renovation and change of use of the 18-year-old, 198-unit Sonesta Hotel, located at the gateway southeast corner of Watertown Plank and Mayfair Road. The new use would be to 146 affordable apartments.
The property is currently under contract with Hotel Investment Group LLC, current owner/operators of the Sonesta Hotel, with sale closing first week of December 2025. Renovation work would begin January 2026 and conclude in June 2026 with intended occupancy.
Tax incremental financing is requested to fill a financial gap.
B. Background/Options
Waterfair Apartments fill a needed new niche of more affordability without excessive luxury, at rents 15-20% below current market rates and provides an economical housing solution for the Milwaukee Regional Medical Complex and Research Park workforce. Affordability is achieved through smaller more efficient unit types comprised mostly of studios and 1-bedroom apartments and value engineering the renovation work.
Located within one mile of the medical campus on Watertown Plank Road, this residence will offer its tenants the healthier option of convenient pedestrian and bicycle access for work or study at the MRMC. In addition, a shuttle service from the apartments is also contemplated to further reduce vehicle traffic in an already congested area of the City.
Repurposing of the current hotel to multifamily housing will remove 198 hotel rooms from a financially challenged hospitality industry in the area. Hotel occupancy tax revenue lost through this repurposing of the Sonesta hotel will be made up through higher occupancy of nearby hotels. Additional tax revenue will be generated for the city with Waterf...
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