The Whitefish Bay Village Board formally approved a plan Monday that would offer $4.6 million in public assistance to the Mandel Group's 100-unit luxury apartment development.
After months of committee meetings, Whitefish Bay trustees approved the creation of a tax incremental finance (TIF) district for The Mandel Group's $27-million, three-building development containing 100 high-end apartments in the parking lots north of Silver Spring Drive, between Santa Monica and Consaul Place.
A tax incremental finance district allows a municipality to borrow and spend money on public improvements, and then recoup the money through the growth in tax revenue generated by those improvements.
The village's $4.6 million contribution includes:
- $1.6 million in direct capital from bond proceeds to benefit the project. The village will pay about $200,000 in interest and issuance costs.
- $1.9 million in a pay-as-you-go TIF note, which places the up-front project costs on the developer's shoulders with a promise from the village to reimburse the developer
- $1.1 million in "air rights" to symbolize the value of the air above the public parking lots on the east end. The village will pay itself for the air rights when all other TIF bonds have been paid off.
Once the project is built and stabilized, the developer estimates the property will be valued at $14 million, and return an additional $320,000 in annual tax revenue. The developer expects the TIF will close by 2035, six years earlier than the 27-year maximum prescribed under state law.
The village's first TIF on Silver Spring was created about 10 years ago, and this new TIF will be imposed over a portion of the existing TIF district.
"By doing that, you are providing for a longer period of time for project costs related to this project, thereby making the risks much lower for the developer and the village," said Michael Harrigan, the village's financial advisor.
By approving the TIF district, the village is not yet committed to approving the Mandel development, Harrigan said.
"By approving this plan, you are putting yourself in the position to issue bonds and entering into a development agreement," he said to trustees.
Going forward, the TIF will go before a joint review board consisting of entities that will lose out on potential new tax revenue from the development for a maximum of 27 years, which is the legal lifetime of a TIF district. The board includes representatives from the village, Milwaukee County, Milwaukee Area Technical College, Whitefish Bay School District and the public.
After the Joint Review Board considers the plan, it will go in front of the Village Board for final amendments. The Joint Review Board will then have a chance to approve any amendments to the plan.
As with previous Mandel votes, Trustee Jim Roemer recused himself from the vote, saying he had a potential financial interest in the project. Trustee Lauri Rollings was absent.