Oak Creek officials approved financial assistance for a $100,2 million project with 399 apartments at Drexel Town Square on Tuesday. Construction could begin in 2024.
The 85-acre Drexel Town Square Redevelopment, which began in 2013, at Howell Avenue and Drexel Avenues, would be almost completed with the two apartment buildings. Barrett Lo Visionary Development, based in Milwaukee, would construct them.
Barrett Lo Visionary has built 408 apartments in Drexel Town Square, the company that is building the 44-story Couture downtown Milwaukee. In January 2013, Oak Creek officials announced the Drexel Town Square Redevelopment Plan. Rick Barrett, the CEO and founder of Barrett Lo Visionary, was present. He has seen the rental rates of Oak Creek apartments rise from less than $1 per square foot to more than $1.50.
Barrett stated that the multi-family market is booming. We've consistently been at 95% occupancy. Renewal rates are high and we're very pleased with them. The fact that Drexel Town Square is a key part of the Drexel experience has been a defining factor.
Two buildings would house the new apartments. The new building would have 100 apartments. It could be six stories high and located between the existing Emerald Row Apartments and Froedtert & Medical College of Wisconsin Health Center.
Barrett Lo Visionary plans to build a larger building with more than 299 apartments on the 7 acres it owns west from Woodman's Grocery Store, adjacent to Drexel Town Square. Barrett said that the building would be larger and likely four stories high.
The swimming pools in both buildings will be identical.
Barrett stated that he plans to start construction in the first half 2024. He hopes to coordinate construction of both buildings in order to find the 'best and fastest way' to build them.
The project architect is KTGY's Chicago office.
Oak Creek Common Council approved on Tuesday a term sheet for up to $14.9m in financial assistance from the city. City financial assistance was also provided for the first two phases that Barrett Lo completed at Drexel Town Square.
Barrett Lo Visionary will be reimbursed up to $8.4m by 2032 for the following phases if the project generates the expected new value of the property. These minimum values begin at $9 million in 2020, rise to over $62 million in 2027 and reach $71 million near the end of the contract in 2032.
Barrett Lo will receive $8.4 Million in annual property tax refunds generated by the new building.
Barrett Lo Visionary would also receive a loan of $6.5 million from the city. According to the terms, the money will only be released after Barrett Lo has contributed at least $18,6 million of private equity from private investors. Investors could not benefit from the refinancing until the $6.5 million city loan was paid.
Andrew Vickers, Oak Creek's city administrator, said that the funding helped support the higher density developments which required underground parking. He said that the apartments will help keep Drexel Town Square a lively place in the future.
Vickers stated that a $100 million project is not common in the current environment. The density was the main factor in the decision to have the city participate. The density is important for the downtown.
Vickers stated that after the completion of these two apartment buildings, only one remaining lot would be available for development within the Drexel Town Square overall project. This retail lot is located at West Drexel Avenue & South Main Street.
The 85-acre redevelopment project of the former Delphi Manufacturing Plant was announced in 2013. It broke ground the next year. The city has partnered with Wispark LLC (the real estate arm) of We Energies.
Barrett Lo Visionary, which was involved in the announcement of Drexel Town Square in January 2013, predicted that 500 to 600 units would be available. This was a few hundred apartments short of what was actually possible.
Barrett explained that when they arrived, no apartment deals had been done in Oak Creek for many years. So, they took a big leap of faith. The completion of these two phases is the culmination to what we began. We are excited.
WiRED Properties, which built the mixed-use building on the other side of the central plaza, and Meijer also participated in 2013.
Vickers stated that it was amazing to see the project absorb the entire city in just eight or nine year.