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Consideration of approval of a term sheet with the Mandel Company for the Harlow and Hem Development at 7470 Blanchard Street
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Submitted by:
John Ruggini and Mark Hammond
Department:
Finance and Development
A. Issue
Previously, the City approved a term sheet with Mandel Group (the "Developer") in 2022 to construct a mixed-income apartment on several parcels located at 7463 and 7487 Hardwood Avenue and 1330 North Wauwatosa Avenue. The Developer initially proposed to construct a 130-unit apartment consisting of studio, 1, 2, and 3-bedroom units. Changing market conditions and cost issues with that design resulted in a redesign of the development and a renegotiation of the terms. A new term sheet is recommended for approval.
B. Background/Options
Previously, the City approved a term sheet with Mandel Group (the "Developer") in 2022 to construct a mixed-income apartment on several parcels located at 7463 and 7487 Hardwood Avenue and 1330 North Wauwatosa Avenue. The Developer initially proposed to construct a 130-unit apartment consisting of studio, 1, 2, and 3-bedroom units with 22-units reserved for households with incomes at or below 80% of the area median income (AMI) and 4-units reserved for households with incomes at or below 30% AMI. In return, the City previously agreed to provide a Tax increment district (TID) assistance as follows:
1. Municipal revenue obligation (MRO) note in the maximum principal amount of $5.59 million to be repaid from 90% of the annually generated tax increment over an anticipated 20-years on a pay-as-you-go basis; and
2. Issuance of tax-exempt bonds to provide $3.2 million of upfront assistance for construction of 115 public parking stalls.
Unfortunately, the development never commenced, and market conditions changed which negatively impacted the financial feasibility of the development. In 2024, the Developer approached the City with a revised development and an increased TID assistance request. The Developer no...
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