Financing Woes Delay Upscale Apartment Project

City plan commissioners Monday backed a developer's request for a 30-month extension to build an upscale apartment building and for deferred payment of a related nearly $175,000 sewer bill.

The 56-unit apartment building is the second phase of Wimmer Communities' project, at 16505 W. Wisconsin Ave., and was approved by the city in 2010. The project was back before the commission Monday, as company president Mark Wimmer said he needed more time to secure financing.  

Wimmer said he was surprised to encounter financing difficulties since the project's first phase - 11 buildings with a total 144 apartments - has been "incredibly successful."  

"We've been running at 100 percent (occupancy) for the last couple months," he said. "You would think ... it would be a slam dunk to get money." 

In today's economic climate, he said, banks are reticent to lend to anything but the most secure projects, usually backed by government subsidies. 

Wimmer also asked for more time to pay a $174,412 city bill for upgraded sanitary sewer work near Georgetown Square. City staff recommended Wimmer pay compound interest on the sewer charge to compensate for the city's loss of interest earnings, an idea that plan commissioners endorsed Monday.

The Common Council will consider approval of the project extension and sewer payment plan at its meeting. 

Wimmer Communities bought Georgetown Square from the Mandel Group Inc. in 2007.  Although Wimmer asked for a 30-month extension, he said he hopes to begin construction before then.

Phase two plans calls for construction of a single building of Georgian design with 56  one- and two-bedroom apartments, ranging from 762 to 1,259 square feet, with monthly rents ranging from $1,067 to $1,674. The building would be a maximum of 49 feet tall and a total of 90,800 square feet.

A project cost was unavailable, but Wimmer told commissioners that the company recently obtained $18 million in post-construction financing for phase one.

Plan commissioners asked Dan Ertl, city community development director, if a 30-month construction extension was out of the norm with past practice.

Ertl said that while commercial projects typically have a two-year window to break ground, projects classified as "planned development districts," or PDDs, have more latitude and no precise timetable.

He noted that Sendik's Towne Centre, on the southwest corner of Capitol Drive and Brookfield Road, was a PDD that was granted a 13-year window to build a total of 12 to 13 buildings. Seven are built so far.

Ertl said staff was somewhat concerned about a 30-month delay for a single building, but supported Wimmer's request due to industry lending challenges.

Mayor Steve Ponto, plan commission chair, asked what would happen with the sewer bill if the apartment building was not constructed within 30 months and approvals expired. 

Ertl said the sewer bill would come due whenever the land is developed. "This obligation runs with the land," he said.

Ald. Gary Mahkorn, a plan commissioner, said he felt confident Wimmer will build as soon as financing is available and the complex will be a benefit to the city.

"The prognosis for a successful venture is extremely high," Mahkorn said.