Warsaw Council OKs Development Agreement For Downtown Housing Project
June 20, 2023 at 12:53 a.m.
Warsaw Council OKs Development Agreement For Downtown Housing Project
By David [email protected]
Monday, the Warsaw Common Council unanimously approved a resolution and development agreement with AP Development LLC - also known as Millworks - for the three-story approximate 85 market-rate apartment complex with some mixed commercial space, as presented by Community and Economic Development Director Jeremy Skinner. It’s the same agreement the Warsaw Redevelopment Commission approved June 5.
“It will be approximately $20 million total investment. Our portion of that investment will include a bond issue for the TIF (tax increment financing) generated from this development. Prior to that bond issue, we will bring this property into the Central TIF District, or the downtown TIF district, also known as the Redevelopment Allocation Area. And then once developed, from this project we’ll go back into that project to do the bond issue. In addition to that bond issue, the city is agreeing to do some exterior perimeter improvements, infrastructure around the property, including sidewalk and on-street parking and any streetscape that would go along with that, and any storm and/or sanitary connections within the right-of-way, not on the private property but within that right-of-way. Any improvements that would need to be done with a not-to-exceed amount of $1 million,” Skinner explained.
In addition to the financial support, the city is pledging its support for AP Development to go after some additional funding opportunities, including grants and tax credits.
While the total investment of the project is $20 million, Skinner said the city’s investment would be the TIF increment and the $1 million associated with any infrastructure around the property.
The land is owned by a land trust so the property will just be given to AP, and the city owns a small portion of land that also will be given to the project as well.
Councilwoman Cindy Dobbins asked if the bond issue would be for $6 million.
“It’s not going to generate $6 million. They wanted that not-to-exceed amount, and so it’s a high-dollar amount. It’s not likely that it’s going to generate anywhere near that, but rather than having to go back and redo it, that’s the dollar amount that they chose,” Skinner replied.
While he doesn’t know how much the bond will generate, he guessed between $2-$2.5 million. He said it will depend on the assessed value of the total project and what the bond issuance comes out at. The lower the interest rates, the more money they will generate.
Dobbins then asked if all the parking would be on-street and nothing in the way of a parking garage. Skinner said there won’t be a parking garage, but there will be off-street parking on the project site, with a combination of on-street parking as well.
Mayor Joe Thallemer said there will be some commercial space and it’s being preliminarily contemplated along Market Street across from HopLore. Skinner said the commercial space will be somewhere around 3,500 square feet.
Dobbins asked if it might be a small grocery store, but Skinner said maybe restaurant or coffee shop. “The intent is to have a second-floor, I guess it might be a third-floor, amenity space, so you’ll have a rooftop space in that commercial component as well,” he said.
Council President Jack Wilhite asked what the ratio of parking to residence/commercial was. Skinner estimated it was about 1.3 to 1.5 spaces per unit. He thought there was about 120-some parking spaces planned.
Thallemer said the city’s interest in the project is workforce housing, which was what was being proposed with the project. The AP development is the city’s second apartment project following the Gatke development, which will have 80-some units.
“Commercial space in both of these projects is up to the developer. The developer is the one that has to manage that,” Thallemer said.
Providing a timeline for the project, Skinner said there will be a lot of different phases to it. The council approving the agreement Monday was an opening step, but it’s definitely not the end-all.
“Obviously, there will be a bond issue that comes back before you. The first step will be bringing the property into that district because it is not. The Redevelopment Commission has started that process, but it will go before the Plan Commission, then to you and then back to the Redevelopment,” Skinner said. “At the same time, we’ll be doing a property disposition, so we’ll be disposing of that small piece of property we own along with that. And then we will be doing a bond issue.”
Those three phases will take place over the next three months, culminating in the project starting.
“Now, we still need some other gap funding we need to cover with them ... but the intent is to start this project yet this year,” Skinner said.
Councilman Jeff Grose made the motion to approve the resolution and agreement, Councilman Mike Klondaris seconded it and it passed 7-0.
Later in the meeting, District 1 Council candidate Juergen Voss, who is a landlord, asked what the anticipated rent of the units are. Thallemer said the developer will work through that and that’s all part of their financing package.
Skinner said AP gave the city some preliminary numbers but he hated to say what they are at this time. He said the projects are going to be competitive with other market-rate apartment rates within the community. When he said market-rate, he said he wasn’t talking about $2,500 a month but “your average apartment, so they will be probably somewhere in the $800 to $1,200 a month.”
Voss said people earning $15 to $20 an hour can only afford $800 to $1,000 a month in rent, but there’s nothing available. He said the community still has a tremendous problem with affordable rental units but the AP Development was a step toward solving that problem.
“So the rent target is not to exceed 125% of AMI (average median income), and 10% of the units will be 80% of AMI, so they’re not going down to the 60%, which would be affordable housing, but they’re still below that 100% of AMI,” Skinner said.
Dobbins agreed for that person making $15-$20 an hour “it’s a real issue with what they can afford to pay. I think we’ve got to take that into consideration.”
In another matter, Willard Brandt thanked Thallemer for his assistance with the noise reduction Saturday from the fairgrounds.
“I spent part of my morning over there trying to affect some change, and I was told, ‘You know what, they have a contract. They can do anything they want. It’s in the contract.’ And somehow, you were able to bring about a change in the reduction in noise. And I can assure that all the folks on Fairlane Drive are appreciative because everything hanging on my walls was vibrating. That was just ridiculous,” he said.
Thallemer told Brandt he stopped over at his house to see him, but he was gone, but his storm door was vibrating on the other side of the street.
He said many of Brandt’s neighbors also got a hold of him Saturday, and he paid the fairgrounds a visit. There was a car show at the fairgrounds which included a “Bass Off.”
Dobbins also said she received calls about the noise at the fairgrounds.
Monday, the Warsaw Common Council unanimously approved a resolution and development agreement with AP Development LLC - also known as Millworks - for the three-story approximate 85 market-rate apartment complex with some mixed commercial space, as presented by Community and Economic Development Director Jeremy Skinner. It’s the same agreement the Warsaw Redevelopment Commission approved June 5.
“It will be approximately $20 million total investment. Our portion of that investment will include a bond issue for the TIF (tax increment financing) generated from this development. Prior to that bond issue, we will bring this property into the Central TIF District, or the downtown TIF district, also known as the Redevelopment Allocation Area. And then once developed, from this project we’ll go back into that project to do the bond issue. In addition to that bond issue, the city is agreeing to do some exterior perimeter improvements, infrastructure around the property, including sidewalk and on-street parking and any streetscape that would go along with that, and any storm and/or sanitary connections within the right-of-way, not on the private property but within that right-of-way. Any improvements that would need to be done with a not-to-exceed amount of $1 million,” Skinner explained.
In addition to the financial support, the city is pledging its support for AP Development to go after some additional funding opportunities, including grants and tax credits.
While the total investment of the project is $20 million, Skinner said the city’s investment would be the TIF increment and the $1 million associated with any infrastructure around the property.
The land is owned by a land trust so the property will just be given to AP, and the city owns a small portion of land that also will be given to the project as well.
Councilwoman Cindy Dobbins asked if the bond issue would be for $6 million.
“It’s not going to generate $6 million. They wanted that not-to-exceed amount, and so it’s a high-dollar amount. It’s not likely that it’s going to generate anywhere near that, but rather than having to go back and redo it, that’s the dollar amount that they chose,” Skinner replied.
While he doesn’t know how much the bond will generate, he guessed between $2-$2.5 million. He said it will depend on the assessed value of the total project and what the bond issuance comes out at. The lower the interest rates, the more money they will generate.
Dobbins then asked if all the parking would be on-street and nothing in the way of a parking garage. Skinner said there won’t be a parking garage, but there will be off-street parking on the project site, with a combination of on-street parking as well.
Mayor Joe Thallemer said there will be some commercial space and it’s being preliminarily contemplated along Market Street across from HopLore. Skinner said the commercial space will be somewhere around 3,500 square feet.
Dobbins asked if it might be a small grocery store, but Skinner said maybe restaurant or coffee shop. “The intent is to have a second-floor, I guess it might be a third-floor, amenity space, so you’ll have a rooftop space in that commercial component as well,” he said.
Council President Jack Wilhite asked what the ratio of parking to residence/commercial was. Skinner estimated it was about 1.3 to 1.5 spaces per unit. He thought there was about 120-some parking spaces planned.
Thallemer said the city’s interest in the project is workforce housing, which was what was being proposed with the project. The AP development is the city’s second apartment project following the Gatke development, which will have 80-some units.
“Commercial space in both of these projects is up to the developer. The developer is the one that has to manage that,” Thallemer said.
Providing a timeline for the project, Skinner said there will be a lot of different phases to it. The council approving the agreement Monday was an opening step, but it’s definitely not the end-all.
“Obviously, there will be a bond issue that comes back before you. The first step will be bringing the property into that district because it is not. The Redevelopment Commission has started that process, but it will go before the Plan Commission, then to you and then back to the Redevelopment,” Skinner said. “At the same time, we’ll be doing a property disposition, so we’ll be disposing of that small piece of property we own along with that. And then we will be doing a bond issue.”
Those three phases will take place over the next three months, culminating in the project starting.
“Now, we still need some other gap funding we need to cover with them ... but the intent is to start this project yet this year,” Skinner said.
Councilman Jeff Grose made the motion to approve the resolution and agreement, Councilman Mike Klondaris seconded it and it passed 7-0.
Later in the meeting, District 1 Council candidate Juergen Voss, who is a landlord, asked what the anticipated rent of the units are. Thallemer said the developer will work through that and that’s all part of their financing package.
Skinner said AP gave the city some preliminary numbers but he hated to say what they are at this time. He said the projects are going to be competitive with other market-rate apartment rates within the community. When he said market-rate, he said he wasn’t talking about $2,500 a month but “your average apartment, so they will be probably somewhere in the $800 to $1,200 a month.”
Voss said people earning $15 to $20 an hour can only afford $800 to $1,000 a month in rent, but there’s nothing available. He said the community still has a tremendous problem with affordable rental units but the AP Development was a step toward solving that problem.
“So the rent target is not to exceed 125% of AMI (average median income), and 10% of the units will be 80% of AMI, so they’re not going down to the 60%, which would be affordable housing, but they’re still below that 100% of AMI,” Skinner said.
Dobbins agreed for that person making $15-$20 an hour “it’s a real issue with what they can afford to pay. I think we’ve got to take that into consideration.”
In another matter, Willard Brandt thanked Thallemer for his assistance with the noise reduction Saturday from the fairgrounds.
“I spent part of my morning over there trying to affect some change, and I was told, ‘You know what, they have a contract. They can do anything they want. It’s in the contract.’ And somehow, you were able to bring about a change in the reduction in noise. And I can assure that all the folks on Fairlane Drive are appreciative because everything hanging on my walls was vibrating. That was just ridiculous,” he said.
Thallemer told Brandt he stopped over at his house to see him, but he was gone, but his storm door was vibrating on the other side of the street.
He said many of Brandt’s neighbors also got a hold of him Saturday, and he paid the fairgrounds a visit. There was a car show at the fairgrounds which included a “Bass Off.”
Dobbins also said she received calls about the noise at the fairgrounds.
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