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Bay trustees approve plan, TIF boundaries for Mandel apartments

Only a few steps remain to finalize $14 million project

Dec. 4, 2012

Whitefish Bay - The Mandel Group's plans to develop a 100-unit luxury rental apartment complex near Silver Spring Drive in Whitefish Bay continue to move forward.

The Village Board on Monday adopted a resolution approving the project plan and establishing the boundaries for the creation of Tax Incremental Finance District No. 2 to help facilitate the project.

Mike Harrigan, chairman/senior financial adviser with Ehlers and Associates, explained that the new TIF is an overlay district of the village's existing TIF District No. 1, which means that it is imposed over the top of a portion of that district.

"By doing that, you are providing for a longer period of time for recovery of project costs that will be related to this specific project," Harrigan explained, "Thereby making the risks much lower for both the developer and for the village."

The village will contribute approximately $4.6 million toward project costs, including an approximately $1.9 million pay-as-you-go developer payment, as well as the issuance of general obligation debt to fund about $1.6 million in parking improvements in the district.

The village also will contribute nearly $1.1 million for land or air rights involved in the transfer of property to the developer, which eventually will be repaid to the village through tax revenues generated by the development.

Additional administrative costs also will be incurred by the village, Harrigan said.

Trustee Jay Miller noted that only about $2 million of the funding will go directly to Mandel Group, with the village standing to benefit from the TIF district as well.

"In a way, we're getting back some of this money over a period of time during this 25-year period, it's not just all going to Mandel," Miller said. "We're paying ourselves for the air rights, for example."

Without the village's contribution, the air rights would otherwise have to be paid for by the developer, Harrigan said.

"We know from our own projections, financially, their ability to make that payment would make the project probably unfeasible from the standpoint of the return on investment," Harrigan said. "Certainly the village is getting the benefit of getting reimbursed for making that opportunity available to the developer."

Mandel Group plans to construct the three-building, 100-unit development in the parking lots just north of the Fox Bay building on Silver Spring Drive, between Consaul Place and Santa Monica Boulevard. The apartments would be situated above a parking structure, Harrigan said, which would be predominantly owned by the village.

Upon completion, the development is expected to have a value of about $14 million. The expectation is that the district would generate enough increment - an increase in value - to be retired by 2035, Harrigan said, about five to six years earlier than the maximum 27-year life allowed for TIF districts under state law.

The village's approval of the project plan lays the foundation for next steps that need to be taken, Harrigan said, including approval of a developer agreement and issuance of general obligation bonds.

The Joint Review Board, representatives of all taxing jurisdictions, is expected to consider approval of the project plan at its meeting on Dec. 20. Approval of the developer agreement with Mandel Group is targeted for Jan. 7, Village Attorney Chris Jaekels said, with groundbreaking on the project targeted for late February to early March.

NEXT STEP

WHAT:Joint Review Board consideration of project plan for creation of TIF District No. 2

WHEN: 4 p.m. Dec. 20

WHERE: Village Hall, 5300 N. Marlborough Drive

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