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From the Manager of Real Estate Services, DTPW, requesting an amendment to the Development Agreement for Block 26 in the Park East Corridor in the City of Milwaukee, Wisconsin
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POLICY ISSUE:
Revision of the Development Agreement for Block 26 requires County Board approval.
BACKGROUND:
RSC & Associates (“RSC”) closed on the purchase of Block 26 in December 2007 and the County was paid the $2,725,000 purchase price. RSC was prepared to break ground on the Park East Square project (“Project”) when the economic downturn resulted in the Project lender rescinding RSC’s loan commitment. Therefore, the construction timeline in the Development Agreement cannot be met until RSC secures replacement financing.
As outlined in the attached letter from RSC, dated February 18, 2011, RSC notes they have pursued numerous types of financing alternatives, including conventional lending through banks, pension funds, insurance companies, Disaster Recovery Bonds and WHEDA housing tax credits with Common Bond Communities (“Common Bond”) as a partner. RSC states that unfortunately these various funding alternatives have not materialized or are not entirely feasible financing options in this economic climate. Even those apartment projects that have advanced recently have done so with GAP loans or loan guarantees.
RSC states that they continue to pursue capitalization for the Project and continue to work with Common Bond to identify funding alternatives and design variations to advance the Project. RSC recognizes that time and continued perseverance is needed to find the final solution. Therefore, RSC is requesting a six (6) month extension to the Project Excavation Commencement Date, until September 30, 2011 and sixty days thereafter for the Excavation Completion Date as called for in the Development Agreement. An extension will require an amendment to the Development Agreement (“Fifth Amendment”). County staff, Corporation Counsel and private legal counsel, enl...
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