Plans to turn a former furniture factory in Racine into an affordable-housing complex will move ahead with the help of tax credits, state and local officials announced on Thursday.
The Milwaukee developer Josh Jeffers first announced plans to redevelop the former factory last fall, but later decided to put the project on pause until he could secure federal tax credits. That aid has now come through.
On Thursday, state and local officials announced the project would receive $580,000 worth of Federal Low Income Affordable Housing Tax Credits from the Wisconsin Housing and Economic Development Authority, also known as WHEDA.
Jeffers’ plans for the $18 million project call for turning the Gold Medal Furniture factory — which was built in 1894 and, at its peak, employed 125 people making wood-and canvas director’s chairs and similar products — into an apartment building with 77 units. Of those, 65 would be let at “affordable” rates and 12 at market rates. It would be called Gold Medal Flats.
“There are only so many treats to hand out. Now trust me, there is no tax credit tree growing in WHEDA’s backyard,” said Board Chair Ivan Gamboa, chairman of the WHEDA board. “When we award the tax credits, we award to projects that do the most for the community. Only the best of the best get the awards, like the Gold Medal lofts.”
Work on the project is expected to get underway in March and wrap up by the end of 2019. The Milwaukee-based company Greenfire Management Services will be the general contractor on the project, which was designed by another Milwaukee company: Engberg Anderson Architects.
The former factory building at 1701 Packard Ave. was most recently used as storage space by Recon Office Furniture, a New Berlin-based furniture dealer. John Kurtz Jr., president and CEO of Recon, said he bought the building eight years ago for about $200,000.
Jeffers plans to pay $2.1 million for the 110,000-square-foot building at 1701 Packard Ave. and $390,000 for a separate, 30,000-square-foot former factory building standing across the street. That second building might also be used for apartments, but Jeffers plans to try to gauge market demand for that proposed project before moving forward. Jeffers said his company will close on the sale of both buildings in January.
The Gold Medal building consists largely of exposed-brick walls and heavy-timber support beams. Recon furniture is still stacked up inside.
“It was clear that this was a good candidate for redevelopment,” Kurtz said.
Plans for the Gold Medal building call for it to have one-, two- and three-bedroom units ranging in size from 600 square feet to 1,400 square feet, a fitness center and outdoor courtyard. The fact that there are 23 three-bedroom apartments in the plans, Jeffers said, is a sign that demand is strong in Racine for affordable housing for families.
“It is a little bit of reflection on the housing market,” Jeffers said. “It is a reflection on the demand that exists for high-quality affordable housing.”
The Gold Medal lofts project follows the French manufacturer Jacquet Metal Service’s announcement of plans to build a $12 million expansion of its factory in Racine, which stands on eight acres next to the site of the apartment project, at 1721 Packard Ave.
Jeffers is also planning another housing development in Racine, as the city’s housing market heats up amid Foxconn Technology Group’s construction of a $10 billion factory nearby in Mount Pleasant.
In June, Jeffers paid $410,000 for three buildings in Racine, at 2100 and 2200 Northwestern Ave. Those buildings are part of the historic Horlick Malted Milk Co. and have 246,000 square feet in total.
“We are definitely long on Racine,” Jeffers said.Follow @natebeck9