By Shereen Siewert
Members of the Economic Development Committee on Thursday selected a proposal to build a 50-unit affordable housing complex on the former West Side Battery and L&S Printing property on the city’s west side.
The proposal, by Gorman & Co., was chosen over that of Wausau Opportunity Zone. Both proposals were discussed last week, but the committee wanted additional details before making a final decision. Wednesday’s meeting was held in part for timing reasons, to allow Wausau to apply for roughly $1.7 million in Neighborhood Investment Fund grants to support the project. Those applications are due on Nov. 11.
Committee members went into closed session before choosing the proposal from Gorman & Co., LLC, the same group that is undergoing a $20 million historic rehabilitation of the Landmark Apartments in downtown Wausau. Trent Claybaugh, on behalf of Gorman, expanded on his group’s vision for the Westside Battery Lofts, which would create 50 units of affordable housing in a four-story building on the site.
Dist. 7 Alder Lisa Rasmussen asked openly whether Gorman was prepared to take on the significant challenges associated with the property. Rasmussen pointed to a summary of site conditions prepared by engineering firm REI that identified a utility line that crosses the center of the property and the sanitary sewer line that would require rerouting.
Claubaugh said Gorman reviewed the site specific details over the past week and acknowledged that the property does have challenges, but based on cost estimates received so far his company believes they have enough buffer built into their budget model to overcome those issues. A geo-technical report is yet to be prepared, he said.
“I knew this was an incredibly constrained site and I built in a significant buffer to weather any of those concerns,” Claybaugh said.
Gorman would pay Wausau $100,000 for the parcel contingent upon an environmental investigation for the project, which would generate roughly $2.23 million in annual tax revenue base for the city after completion.
Claybaugh pointed to the city’s 2017 comprehensive plan that showed a greater number of affordable housing units are necessary in the community, particularly near downtown. On that particular census tract, about 54% of households are considered rent-burdened, spending more than 30% of their income on rent, with a rental vacancy of 0%.
The 50 units would have monthly rent ranging from $375 to $988, with one three-bedroom unit at $1,142 per month and would be income-restricted
The $14.45 million project would rely on a combination of federal and state tax credits and other funding sources. Of that, Claybaugh identified a funding gap of about $1.6 million, which could be largely offset by neighborhood investment funds if the city’s grant application is accepted by the state. If those funds were not available, the gap funding could come from a mix of program funding that could be arranged with the city.
In their proposal, Gorman says the cost figure is consistent with the 19.4% increase in building materials during the 12 months prior to 2021. Given the property’s expected first-year net operating income of about $157,000 per year, Gorman anticipates the building to achieve a valuation of more than $2.23 million upon completion, generating tax revenue for the city.
Once again Chuck Ghidorzi, speaking for Wausau Opportunity Zone, presented their group’s vision to raze the existing buildings to either pave the way for a building with a smaller footprint or leave the area open to create a “sense of arrival” for travelers as they reach downtown Wausau. Ghidorzi praised Gorman’s efforts on the Landmark building, but said WOZ is already prepared to create a range of housing in the downtown area as their plans for the former mall property move forward.
WOZ, Ghidorzi said, wants the land to “give it back to the community” while expanding the footprint of downtown Wausau. He also urged the committee to “relax a little bit” and give Gorman time to look at alternative sites for such a project.
But after a brief closed session, the committee voted unanimously to move forward with Gorman’s vision, clearing the way for Wausau’s planned grant proposal that would all but eliminate any additional city participation in the plan.
Gorman’s complex would begin construction in 2023 and be open for occupancy by June 30, 2024, according to city documents. Underground parking is also planned, and talks are underway to acquire adjacent property to add additional street parking, Claybaugh said. See below for a look at proposed rents and income parameters.
Project plans for the property, at 415 S. First Ave. and 401 S. First Ave., have twice been scuttled since Wausau acquired the land. City leaders in September 2016 purchased the West Side Battery property for $200,000 using a loan made by the Judd S. Alexander Foundation. The adjoining parcel, the former home of L&S Printing, was sold to the city in 2014 for $190,000, also with a loan from the Judd S. Alexander Foundation.