Work on West Allis apartments hinges on city financing

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By TOM DAYKIN

USA Today Network via Reuters Connect

A developer hopes to begin construction this year on a 117-unit apartment community near West Allis Farmers Market – if city officials approve $10.6 million in financing help.

Mandel Group Inc. plans to build the second phase of SoNa Lofts at 6616 W. Mitchell St., just south of SoNa’s first phase, with 110 units at 6675 W. National Ave.

That $26.8 million project would be financed mainly with a $16.1 million private loan, according to a city report.

Mandel Group also is seeking $10.6 million through a tax incremental financing district. That district would provide annual payments to the development firm from SoNa’s second phase property tax revenue.

Those payments would run for an estimated 22 years − after which the property tax revenue would go to the city, its school district, and other local governments. Given the effects of inflation, the net present value of the grants is $5.4 million.

The tax district was recommended for approval by the West Allis Community Development Authority at its March 10 board meeting. The Common Council is to review that request at its March 24 meeting.

With city approvals, Mandel Group would then finalize its development agreement with the city, said Robert Monnat, senior partner.

The firm is working on the project’s construction contract during what Monnat called “a pretty volatile market.”

“We are hoping to be in the ground in 2026, and feel that is achievable,” Monnat told the Milwaukee Journal Sentinel.

The new apartments, within two buildings of 66 and 51 units, would add $23.85 million of property tax base, according to a city report.

The tax financing district, along with providing $10.6 million to help cover Mandel Group’s costs, also would generate around $1.5 million for additional projects − including $600,000 to extend the Hank Aaron State Trail.

The terms of the city’s proposed financing package could change as it continues to negotiate a development agreement with Mandel Group, said Economic Development Director Patrick Schloss.