In a major surprise, the state is delivering another $13.4 million in federal tax credits for an affordable housing project on the East Side.
The Wisconsin Housing and Economic Development Authority announced that it will provide $13.4 million in low-income housing tax credits over 10 years to help MSP Real Estate build The Grove Apartments, 204 Cottage Grove Road, a $20 million, 112-unit project with 95 units for those who make less than 60 percent of the county’s median income, about $46,000 for a family of three.
The Grove Apartments will provide 89 units for families, and include 23 apartments with support services for households at or below 30 percent of the county’s median income. It also will include 17 market-rate units.
MSP had sought the tax credits — critical to such projects moving forward — last year but narrowly missed receiving them when WHEDA in February announced credits for 2018. It was thought MSP, based in Mendota Heights, Minnesota, would reapply for 2019.
But additional tax credits were made available through the recently approved federal budget, which increases each state’s low-income tax credit allocation by 12.5 percent for 2018 through 2021. In Wisconsin, that means another $18 million for 2018 over 10 years and more for each of the following three years.
“That’s huge, and a little bit unexpected,” said WHEDA deputy executive director Brian Schimming. “It’s great for the state. It’s great for the city. It’s great for the community and the neighborhood.”
The state is delivering the remaining $4.7 million in extra credits to a project in Little Chute.
“We’re very excited about receiving this news,” said Mark Hammond, director of development for MSP. “It fills a big need in the city of Madison for affordable housing. It’s a great location for affordable housing.”
The site, Hammond said, is near schools, transportation, Lake Monona and Olbrich Park.
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The city, which has committed $3 million to the project, was also pleased by the news.
“It had been the sole city-backed housing project not to receive credits (in February),” said Jim O’Keefe, city community development director. “That said, we knew this was a strong proposal — it had just been a matter of WHEDA not having the wherewithal to meet the full demand.”
Schimming said: “It was one we were interested in. (But) it’s a pretty big project as we go. The competition is pretty intense. We’re trying to stretch the credits as far as we can. You end up leaving some projects on the table because credits aren’t available.”
MSP, which will soon begin its estimated $11 million, 58-unit Normandy Square Senior Apartments on the West Side, intends to seek Dane County financial support for The Grove Apartments and hopes to start that project in the spring of 2019, Hammond said.
In February, WHEDA announced it is delivering over 10 years:
- $9.7 million in credits to Stone House Development for the Fair Oaks Apartments, 135 S. Fair Oaks Ave., an estimated $17 million, 80-unit project with 68 affordable apartments.
- $6.6 million in credits to Common-Bond Communities for the Tree Lane Senior Apartments, 7941 Tree Lane, an estimated $11.2 million, 54-unit senior apartment building with 51 affordable units.
- $8.1 million in credits to Heartland Housing for The Park Street Apartments, 1202 S. Park St., an estimated $11 million project that would provide 58 units of permanent housing with support services for homeless individual adults and some couples.
Also in February, WHEDA announced additional support for two projects — including one by MSP — that received tax credits in 2017. It delivered an extra $599,700 for a total $6.6 million to MSP for Normandy Square, which will have 48 affordable units, and an extra $810,000 for a total $8.9 million to Gorman & Co. for Union Corners Grandfamily Housing, an estimated $12 million, 59-unit project that would provide 56 affordable units.
The awarding of tax credits to The Grove puts the city slightly ahead of schedule in its bid to add 1,000 affordable units within five years, O’Keefe said.