MONROE - The City of Monroe has begun preliminary steps that will allow a Wisconsin development firm to seek $5 million in tax credits from the IRS' federal Low-Income Housing Tax Credit Program.
The program, administerd by the Wisconsin Housing and Economic Development Authority (WHEDA), encourages affordable, multi-unit rental housing for tenants whose incomes are at or below 60 percent of the County Median Income (CMI).
The Plan Commission Wednesday unanimously approved a general development plan for Silverstone Partners, Inc., the Wisconsin development firm proposing a 60-unit senior housing structure on the corner of 8th Street and 16th Avenue. The property is currently a municipal parking lot.
The resolution also gives the Plan Commission's recommendations to the Common Council on the sale of the property to Silverstone, a payment of $190,000 from the Tax Increment District 7 (TID 7) as a development incentive, an expansion of the TID boundaries and a rezoning of the area as a PUD Planned Unit Development.
Tom Sather, president of Silverstone, said the $190,000 will be used to "buy down rents," allowing more units to be rented at lower rates. Sather anticipates rents to average about $650 for a one-bedroom apartment to $750 for a two-bedroom. Sather said that 60 percent of the median income in Green County is about $25,000. But with the extra "buy down" investment, Silverstone would supply some units at rents based on 30 to 50 percent of the CMI.
WHEDA allows some units to rented at full rate. At minimum, 40 percent of the units must be rented to tenants with incomes not exceeding 60 percent of the CMI. WHEDA uses only the actual percentage of set-aside units in its tax credit calculation.
In a related matter, the city's Tax Increment Finance District Joint Review Board also met Wednesday to discuss implications of the project on TID 7.
Cathy Maurer, city treasurer, said TID 7 did not perform well last year and the project would actually help the fund.
Board members noted that the project would bring city property, which is now tax exempt, back onto tax rolls.
The board did not take any action, but members stated individually that they had no concerns about the request on the TID funds. Members represent the taxing entities within the TID, including Green County, City of Monroe, Monroe School District and Blackhawk Technical School.
All actions taken by the city so far are in preparation only for the application expected to be submitted by Silverstone Partners to WHEDA by Feb. 8.
The city's follow-through, meanwhile, is contingent upon WHEDA awarding Silverstone the $5 million in tax credits for the project.
"Right now, we are just setting the table," said Mayor Bill Ross.
Ross believes the Common Council will be acting on the approval of the General Development Plan in December. The preliminary approval for selling the property may have to go through the city's Property Committee, according to City Attorney Rex Ewald.
Sather is asking the city for all the preliminary approvals because, he said, it will increase the likelihood of WHEDA approval.
"There's no need for actual (TID) amending, in case it doesn't get approval," he said.
In the application, Sather wants to show proof of zoning, a conditional commitment of financial assistance voted on by the city council - as well as evidence of a pending site sale; and a letter of support from Ross.By being able to show the city's commitment to the project, Sather believes he can increase the application approval from 33 to 50 percent.
"It's free money from Washington, D.C.; everybody wants it," Sather said.
Approval of the WHEDA application will not be know until April, after which, Silverstone will take about six months to get its plans and financing ready.
The program, administerd by the Wisconsin Housing and Economic Development Authority (WHEDA), encourages affordable, multi-unit rental housing for tenants whose incomes are at or below 60 percent of the County Median Income (CMI).
The Plan Commission Wednesday unanimously approved a general development plan for Silverstone Partners, Inc., the Wisconsin development firm proposing a 60-unit senior housing structure on the corner of 8th Street and 16th Avenue. The property is currently a municipal parking lot.
The resolution also gives the Plan Commission's recommendations to the Common Council on the sale of the property to Silverstone, a payment of $190,000 from the Tax Increment District 7 (TID 7) as a development incentive, an expansion of the TID boundaries and a rezoning of the area as a PUD Planned Unit Development.
Tom Sather, president of Silverstone, said the $190,000 will be used to "buy down rents," allowing more units to be rented at lower rates. Sather anticipates rents to average about $650 for a one-bedroom apartment to $750 for a two-bedroom. Sather said that 60 percent of the median income in Green County is about $25,000. But with the extra "buy down" investment, Silverstone would supply some units at rents based on 30 to 50 percent of the CMI.
WHEDA allows some units to rented at full rate. At minimum, 40 percent of the units must be rented to tenants with incomes not exceeding 60 percent of the CMI. WHEDA uses only the actual percentage of set-aside units in its tax credit calculation.
In a related matter, the city's Tax Increment Finance District Joint Review Board also met Wednesday to discuss implications of the project on TID 7.
Cathy Maurer, city treasurer, said TID 7 did not perform well last year and the project would actually help the fund.
Board members noted that the project would bring city property, which is now tax exempt, back onto tax rolls.
The board did not take any action, but members stated individually that they had no concerns about the request on the TID funds. Members represent the taxing entities within the TID, including Green County, City of Monroe, Monroe School District and Blackhawk Technical School.
All actions taken by the city so far are in preparation only for the application expected to be submitted by Silverstone Partners to WHEDA by Feb. 8.
The city's follow-through, meanwhile, is contingent upon WHEDA awarding Silverstone the $5 million in tax credits for the project.
"Right now, we are just setting the table," said Mayor Bill Ross.
Ross believes the Common Council will be acting on the approval of the General Development Plan in December. The preliminary approval for selling the property may have to go through the city's Property Committee, according to City Attorney Rex Ewald.
Sather is asking the city for all the preliminary approvals because, he said, it will increase the likelihood of WHEDA approval.
"There's no need for actual (TID) amending, in case it doesn't get approval," he said.
In the application, Sather wants to show proof of zoning, a conditional commitment of financial assistance voted on by the city council - as well as evidence of a pending site sale; and a letter of support from Ross.By being able to show the city's commitment to the project, Sather believes he can increase the application approval from 33 to 50 percent.
"It's free money from Washington, D.C.; everybody wants it," Sather said.
Approval of the WHEDA application will not be know until April, after which, Silverstone will take about six months to get its plans and financing ready.