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Consideration for approval of a term sheet for tax incremental financing with Cream City Real Estate Investments LLC for a multi-family development at 2825/2835 N. Mayfair Road
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Submitted by:
Mark Hammond and John Ruggini
Department:
Development and Finance
A. Issue
Cream City Real Estate Investments LLC (the "Developer") has submitted an application requesting Tax Incremental Financing (TIF) to support the development of Latitude 43, a 92-unit market-rate apartment building located at 2825/2835 N Mayfair Avenue. The project would be located within a to-be-created Tax Increment District No. 17 (TID 17).
B. Background/Options
Project Overview
The proposed development consists of a 92-unit market-rate apartment building at 2825/2835 N Mayfair Avenue. The project site currently comprises two parcels that will be combined prior to construction commencement. The development will include a mix of unit types designed to meet current market demands.
The Developer originally requested a construction loan from the City in the amount of $1,460,105 and a Municipal Revenue Obligation (MRO) Note in the principal amount of $2,900,000, repayable from 85% of the annually generated tax increment over a 15-year term. In lieu of incorporating affordable units within the project, the Developer has proposed making a $100,000 contribution to the City's Affordable Housing Fund.
Current Market Conditions
The multifamily housing development market is currently facing significant headwinds that make projects like this particularly challenging to finance and execute. Rising construction costs, elevated interest rates, increased material expenses, and labor shortages have substantially impacted development feasibility across the region. These market conditions have resulted in the delay or cancellation of numerous residential projects throughout southeastern Wisconsin. The confluence of these factors has created a financing environment where even well-conceived projects i...
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