KYF meeting report

KYF 006_optYesterday, Alderperson Chris Schwartz, from the 2nd district, hosted a meeting at the Kenosha Public Museum, for the developer and architect of a proposed apartment project in the former Kenosha Youth Foundation (KYF) building, 720 – 59th Place.  David Nankin, developer and owner, and architect, Tom O’Connell, made their presentation and answered questions from the group of roughly 50 people.

Nankin and O’Connell brought renderings of their concept plan:

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Schwartz made some introductory comments.  She said that in November, 2011, the property was rezoned for residential purposes.  Then, earlier this month, the property was designated as a tax incremental district (TID) so that it could be redeveloped.  To read the article on that meeting, click here:  “TID Approved for Old KYF Site.”

Nankin gave some information on his work within the Kenosha community.  He has been involved with the apartment building behind Guttormsen’s, the Stationside Village Apartments, Meadowwood Apartments on 30th Avenue, Relo Pointe Condominiums, the Radisson Hotel in Pleasant Prairie, and other office buildings.  He stated that he’s here for the long term.

Nankin then explained the low income housing tax credits (LIHTC).  These are incentives that developers receive for affordable housing.  Then, tax credits are sold to investors and syndicates for cash, which the developer then uses to develop the property.  Stationside Village was just such a property.  In 1991, it cost $9.5 million to develop that property.  It has already run the course of its requirements.  The assessed value now is $6.6 million.  “Without the tax credits, the property would never have been developed,” he said.

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To qualify, they must rent 20% of the 46 units to people who earn 60% of the median county income, or 40% of the units to people who earn 50% of the median county income.  The Housing and Urban Development (HUD) Department has a set formula for determining the rents, which changes every year.  Nankin gave two examples:  For a family of four earning 50% of the median county income, or $34,800 annually, the rent for a two-bedroom apartment would be $783 per month.  For a family of four earning 60^ of the median county income, or $41,760 annually, the rent for a two-bedroom apartment would be $940 per month.  “This is not low income housing,” he said.  “It’s moderate income housing, affordable housing.  The incomes must not exceed the limits.”

Nankin continued, “Without tax credits, new development wouldn’t be happening across the country.  The Wisconsin Housing and Economic Development Association (WHEDA) receives tax credits from the U. S. government.  There is an application process every year.  We are getting ready to submit our development proposal (the application needs to be submitted by February 1st).  There are 18 sections to the application, and there is quite an involved scoring process.  It’s better for the developer to have 100% tax credits.  Our proposal for the KYF Building is 20% market rate and 80% affordable housing.  We would score higher with the credits.”

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One lady questioned what she heard:  that there were three other developments looking for the same tax credits.  Schwartz said the four were the KYF Project, Virginia Towers, the Wells site on 58th Street and 5th Avenue, and the Heritage House.  “Can all four get them?”  Nankin said that, in theory, yes, it’s possible.  Last year, 74 applications were submitted throughout the state, totaling $48 million of development, and 21 received tax credits.  WHEDA only got $12.5 million from the federal government, basically a 4 to 1 ratio for requests versus tax credits.  Awards are announced in mid-April.  If a buyer is procured by the summer, construction plans and financing would be the next step.  Construction could then begin around this time next year.

He then explained what a TID is, a Tax Incremental Financial Plan.  It gives a developer credits on the increased value of a property, only if the assessed value of the property goes up.  As part of the scoring process, an application could get more points for such a financial plan.  Plus, the old KYF Building is a historical building.  Selling historical tax credits could get additional points.

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Michael Remson, who lives in Harbor Park, wanted to know what Plan B was.  “What if tax credits are not given, what then?”  Nankin said that it’s not feasible to develop the property with no market rents.  There is no demand for office use or retail use. There is no Plan B.  I own the building.  If a developer doesn’t get the credits, he would still maintain the building.

Another Harbor Park owner was concerned about her property value.  “Is it better to have the building 20% market and 80% tax credit, or a building with nothing in it?”  Nankin said that it’s better to have the development.  Tax credits allow us to build the building, bring people to downtown, create a spark.  More bars, restaurants, shops, etc.  All areas started just like this.  Bringing in younger people, older people, would create new energy.

O’Connell said that the plan is to have studios, one-, two-, and three-bedroom apartments.  They plan to preserve the facade of the building and increase the window sizes, with Historic Preservation Commission approval.  They also plan to tear down the 1974 addition and use it for parking, approximately 50 parking spaces.  Other unique features include raquetball courts, two-level apartments, walk-out terraces, a community center, a business center, and a fitness center.  There will be no pool.  The parking will face Library Park, one on the north side by the Kenosha News Building, and one facing Library Park.  They plan on keeping the facade and adding a garage door, which would be accessed up one level or down one level.

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A question was raised as to the size of the studio apartment.  It would range from 787 square feet to 1,161 square feet.  “That’s bigger than my apartment in Harbor Park,” one woman said.  The parking deck would contain 51 spaces for 46 apartments.  Nankin also owns the parking lot to the west, so there will be plenty of parking.

O’Connell also spoke of the plans to have a green-built home system.  It will be energy efficient and offer good air quality.  The paints and materials used will promote a healthy environment and efficiency.  All of the lighting will be either LED or fluorescent.  Someone asked about solar heating, but the roof line doesn’t work out for solar panels.  All of these things were seen as good marketing incentives.

The man who owns the 30-unit property across the street asked if a market study was performed to determine the demand for units in downtown Kenosha.  He said that he received his letter from the Kenosha Housing Authority with the 2013 rates.  A one-bedroom would run $625.  “How can Nankin think that he can get $785 for a studio?”  The answer given was that they will follow what the market can bear.  Nankin said that Stationside Village has a 98% occupancy rate right now.  Their lowest rent is $690.

Another concern expressed was shootings in the area.  Nankin replied that they have a zero tolerance for bad residents.  “We are not perfect in screening residents, but we do three screenings:  credit, income, and previous landlord.  It’s an automatic denial if there was a problem with the previous landlord.”  Schwartz said that she asked the chief of police when she first became an alderperson, and he said that there was nothing out of the ordinary happening there.  Schwartz also said that “we need to avoid the us versus them attitude.  The concept is subsidized housing, earned income housing.  We want quality people, and we want to make it affordable for all.”

Schwartz said that it all comes back to the management.  She said that she has more problems with non-owner-occupied housing in her district, not apartment buildings.  Another gentleman said that having the police nearby should add to the safety factor.  Plus, Schwartz said that they have an amazing Neighborhood Watch program in the area.  “With increased businesses come increased taxes, and increased police patrols,” said a new downtown business owner.

Terry Rose, attorney and a county board supervisor, stated that “we can’t fill the downtown with all subsidized housing.  What’s the pubic policy issue?  How many do we have now?  We need diversification here.  The city has no policy.”  Rose stated that he has a real concern for the community.  Schwartz disagreed with Rose.  She said that the city does have a policy.

Merike Phillips, a resident of Library Park, and a member of the Historic Preservation Commission, said that she thought that the building was a beautiful, historic building.  She was happy to see that they planned to preserve the windows.  She liked the paneled rooms.  She thought that that would be a big asset to the rent.  She also stated that she thought that saving the building was critical, and a positive for Library Park.

O’Connell stated that, whenever he drives by the building, he feels bad.  He’d like to see life breathed back into it.  He said, “The concept plan makes one want to think that the building belongs on Park Avenue in New York.  Who wouldn’t want to live there?”

A single mother who is a server at Frank’s Diner and Kaiser’s said that she qualifies for the affordable housing.  She wanted to be the first applicant.  She said that she’d love to live in a nice building.  “It’s a wonderful opportunity to save a historic building.  People need to get rid of the boogie man hiding in their brains,” she said.

Another participant stated that, adding more housing downtown won’t hurt property values.  She lives in Carol Beach, and the value of her property has decreased $35,000.  The market drives property values.  The market tanked five years ago.  There’s no where for it to go but up.  We need to preserve it before we can’t preserve it any longer.  Plus, we need to look at the developer’s record, too.”

A question was raised about the Heritage House.  Schwartz said that, as of right now, it had not been taken over by the county.  It was still owned by the trust.  Both she and another alderperson were pushing for it.  This property was not a WHEDA fit.  If no concept/developer comes along, it may be set up for a raze.

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One Response to KYF meeting report

  • chris r says:

    Lower property tax rates will attract better investment in the community than “forcing investment” by building subsidized housing.

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