West Allis - It's a game that's not for anyone under 18 and probably not for anyone without a doctorate in finance.
But West Allis city officials have figured out a complicated way to sell Wisconsin tax credits so the city can finance $5 million to $6 million in improvements to its affordable housing known as Beloit Road Senior Housing Complex with no cost to property taxpayers.
The 13-building complex, located at about 72nd Street and Beloit Road, currently consists of 104 apartments. It was built in the 1940s, initially to house the families of veterans, then repurposed for senior housing in the 1960s.
The plan and deal
The improvements include making the buildings accessible to those with handicaps, updating bathrooms and kitchen cabinets, installing an intercom and hard-wiring fire alarms.
The improvements would come free because the city obtained tax credits from the Wisconsin Housing and Economic Development Authority. A deal with Boston Capital involves the investment firm giving $6.2 million to the city as it makes money from selling the tax credits to others.
Boston Capital has agreed to put some money into the project now and the rest near the end of construction to pay off the loan.
The complicated arrangement also includes creating a limited liability company that the city's Community Development Authority would control. That company would buy the property and keep it for 15 years, then sell it back to the city for $1. That CDA-controlled company also would manage the property.
The plan also involves a $2.3 million mortgage for which the city would actually be the banker. A development fee is in there, too.
Rents will be kept at current levels with federal Housing and Urban Development money.
The bottom line is that West Allis will be able to remodel the building, keep affordable senior housing and have a better building in the end.
"It's like free money to the project," said Kristi Johnson, community development supervisor.
Sounds fine, but City Attorney Scott Post cautioned: "It's an open-ended liability for the city. … You're taking a leap of faith that all parties will not do things that hurt the city."
But risks will be greatly reduced, if the city follows through on the advice it received from an attorney hired to go over the deal, said City Administrator Paul Ziehler.
Those safeguards include making sure construction stays within budget and on time and that affordability of the apartments is maintained and that tenants meet income guidelines, said Patrick Schloss, community development manager.
Also, the development staff has more than 30 years of experience with tax credits and knows their ins and outs, he said.
The Administration and Finance Committee gave its blessings to the deal and the Common Council approved it. A budget must now be locked in, Schloss said.
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