Milwaukee’s commercial building boom is expected to get a little louder, thanks to an investment from the AFL-CIO.
The union group’s Housing Investment Trust earlier this year announced plans to invest in nine Midwest cities through an investment strategy it calls MidWest@Work. Milwaukee is one of those cities that will receive a share of the program’s $2.1 billion in planned investments.
Overall, MidWest@Work has three components: $1 billion will go toward the development of 60 multi-family housing projects, $157 million will finance the repair of more than 1,000 homes and $100 million will be used for pre-development and bridge loans to fund 25 housing or commercial transactions.
The investment strategy’s three program initiatives are designed to address the lack of investment in some city neighborhoods that create a shortage of affordable-housing options, abandoned housing and blighted neighborhoods, and lack of front-end capital available for community and economic development projects.
“The program is to build off of what we see as the resurgence and growth in these cities and the return to the cities as the key focal points of growth for their local economies,” Ted Chandler, chief operating officer of the AFL-CIO Housing Trust Fund, said in a recent interview.
Another important aspect of the investments is to back projects that are built “100 percent” by union trades workers, Chandler added.
Along with Milwaukee, other cities that were chosen for MidWest@Work are Minneapolis; St. Paul, Minn.; St. Louis; Detroit; Columbus, Ohio; Cleveland; Pittsburgh; and Buffalo, N.Y.
Chandler said that Milwaukee, like the other cities that were selected, showed all the signs that the trust looks for when choosing to invest.
“It’s one of the cities where we’re seeing a growth in the residential market, in the rental housing market, and just as importantly the conditions that are conducive to our investment and to further growth,” he said.
Specifically, Milwaukee had two “signals.” One was the apprenticeship-readiness and workforce-training initiatives already in place, most notably WRTP/Big Step, which recruits and prepares people for careers in construction and manufacturing. Another major factor, as made evident by the Bucks arena and downtown streetcar projects, was the city’s attempts to bring in new private investment.
“They’re just making the kinds of investments that the private sector wants to see,” said Chandler.
The Bucks arena, a $524 million project, is receiving nearly half of its money from taxpayers, including a $47 million investment from the city. And just to the east, workers are busy building the new streetcar line’s downtown loop.
City leaders say the $124 million project will further promote economic development along its path. Rocky Marcoux, Milwaukee City Development commissioner, pointed to MidWest@Work as evidence of that idea.
“I think it’s an affirmation of one of the mayor’s (Tom Barrett) driving principles that the streetcar is driving development,” he said. “… We are looked at it as being progressive with the transportation we’re now bringing in. We’ve got a lot of building going on.”
Marcoux said that the city met with MidWest@Work officials recently to talk about the program and identify the city’s needs. One thing they talked about, he said, was the large number of tax-foreclosed homes in Milwaukee and the need to rehabilitate them and get them back into private hands.
Chandler said no specific projects have been identified yet in Milwaukee to receive an investment from MidWest@Work. He did say the emphasis will be on projects near the Bucks arena and streetcar line. He added that the city may see some investments in the repair of homes.
Ken Kraemer, executive director of Building Advantage, said MidWest@Work’s planned investment in Milwaukee shows that all the hard work being put in by laborers, developers and city officials is paying off.
Kraemer noted that since he started working at Building Advantage, a group comprised of nearly 20,000 trades people and 600 contractors that promotes the use of union labor on construction projects, his goal has been for labor, management and the development community to work together to make Milwaukee an attractive place to invest. Kraemer pointed to the Park East corridor, a section of land formerly owned by the county that not too long ago contained little more than several vacant lots near the city’s downtown.
Now that area is seeing developments like a training center and parking structure being built as part of the Bucks’ arena-centered development area.
“You drive by right now and you go, ‘It worked,’ ” Kraemer said.
Of the program’s overall $2.1 billion in financing, $1.1 billion will come from the AFL-CIO’s Housing Investment Trust, and another $100 million will come from subsidiary HIT Advisers LLC’s Economic Development Fund investment trust. The remaining $900 million will come from other sources.
Although the program doesn’t follow specific rules on how much of its investments go toward affordable housing, about two-thirds of its money goes toward those types of projects, Chandler noted.
The Housing Investment Trust is a $5.8 billion mutual fund that has invested in housing projects nationwide for about 30 years.
The trust has invested in Milwaukee before. Chandler said that the group also invested $45 million in the construction of the Moderne high-rise. That project, which finished in 2015, was developed by Rick Barrett of Barrett/Lo Visionary Development.
Reacting to the fact that the AFL-CIO has again turned its eyes to Milwaukee, Rick Barrett said he has never been more excited about the future of the city, noting that investors from across the globe are now taking an interest.
“Our city is transforming itself with once-in-a-generation type investments that are bringing new jobs, new vibrancy and a new opportunity,” Rick Barrett said in an email. “We’ve put ourselves on the map and the country is taking notice. We’re seeing tremendous interest from capital markets around the world that can’t wait to invest in Milwaukee.” Follow @alexzank