CITY OF MILWAUKEE - DEPARTMENT OF CITY DEVELOPMENT
Real Estate and Tax Incremental Analysis - Downtown Milwaukee

S. B. Friedman & Company prepared real estate and tax incremental analyses for seven developments located in downtown Milwaukee . The scope of work included evaluation of downtown residential and commercial markets, analysis and revision to the absorption and rents proposed by the developer, review of construction costs, deal structure assistance to the City, and formal projections of the feasibility of the tax incremental revenues retiring the debt. Analyses have been prepared for the following developments, with the scope varying depending on the nature of the project:

TID 17, The Curry-Pierce Building . This project involved a single-building TID. In completing our assignment we used valuation criteria and techniques consistent with those of the City Assessor to estimate the future tax revenues for the district. We also conducted research on personal property tax revenues that would be relevant. The project was approved and has been completed.

TID 19, Marquette University Area, Campus Towne. Residential and retail market assessments were reviewed and the level of assistance required critiqued. A matching TID loan was established to fill the financing gap. The project has proceeded with retail rehabilitation and retail and residential new construction.

City Hall Square . Located in downtown Milwaukee across from City Hall and the historic Pabst Theater, the project consisted of the historic renovation of three buildings and construction of one new building for residential and ancillary commercial uses. A total of 183 apartment units and 25,735 square feet of commercial space was planned. Both historic preservation and low-income housing tax credits would be used.

The Tannery, TID 26. A large former tannery complex just south of the CBD near Walkers Point is being converted to office and residential uses. Our scope included a market assessment to determine the absorption and rent levels attainable, a need for assistance review, and a determination of the level and structure of a potential loan to the project. Development of the project is proceeding.

King Drive/Walnut Street . The firm prepared prototypical development concepts to represent the kinds of projects that seemed likely to occur including residential, office and retail uses. Pro forma financial projections were prepared for each of four concepts. These projections included estimates of capital costs including both “hard” construction costs and “soft” costs. Working closely with the assessor and other sources, revenue estimates were made and operating costs determined. The financing gap was estimated for each project and the financing needs and tax revenues for each prototype then were incorporated into the analysis of incremental tax revenue and projected cash flow to retire City bond debt.

Lake Bluff Apartments. A detailed review of the real estate economics of the project was conducted including market factors, construction costs, operating costs, and property taxes. The project overlooks Lake Michigan and is positioned at the top of the Milwaukee rental market. Assistance was provided in structuring a TIF loan which was approved. The project is complete, leasing has proceeded ahead of schedule, and the loan is being serviced.