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TO: Honorable Mayor and Members of the Common Council FROM: Kelly Nieforth, Director of Community Development DATE: December 10, 2024 SUBJECT: Res 24-680 Amend Resolution 24-413 Granting ARPA Funding for Development of a Multi-shift Child Daycare Facility,  Approve City Grant Application to WEDC, and Approve City-Funded Development Grant and Development Agreement with The Corridor Development, LLC and Wisconsin Partnership for Housing Development, Inc., All in Relation to the Corridor Development to be Located in the 600 Blocks of Jefferson Avenue and North Main Street

BACKGROUND

The City’s Redevelopment Authority (RDA) acquired properties along the west side of the 600 block of Jefferson Street and the east side of North Main Street since 2006 to create a larger, developable area for a housing and/or a mixed-use development. The RDA-owned parcels are included in a Qualified Census Tract (QCT) area which was designated by the Department of Housing and Urban Development (HUD) for 2023. The designation indicates that 50% of the households have incomes below 60% of the Area Median Gross Income or have a poverty rate of 25% or more. The block is also included in the City of Oshkosh’s Near East Neighborhood Redevelopment District. The RDA approved a request for proposal (RFP) to be sent out in the spring of 2023 and one proposal was received from Commonwealth Development Corporation of America (Commonwealth).  The RDA approved a Land Option for Commonwealth’s proposed mixed-use development during their July 19, 2023 meeting. The Oshkosh Common Council approved a Term Sheet (Resolution #23-645) with Commonwealth Development Corporation of America on December 12, 2023 for the redevelopment of the area. One of the key terms of the Term Sheet stated a formal Development Agreement is to be executed once the project is finalized.

ANALYSIS

The development will create a mixed-use building with 55-units comprised of affordable, workforce, and market-rate apartments with one-, two-, and three-bedroom units serving households ranging from 30% to 80% of the Area Median Income (AMI). Along North Main Street, there will be first floor commercial including a multi-shift childcare center which is designed to serve households below 60% AMI with housing on the upper levels. Along Jefferson Street, townhomes will be constructed and will mirror the elevations of the existing homes on the street. This proposed development addresses the needs of multiple community deficiencies including the addition of HUD-designated Extremely Low Income, Very Low Income, Low Income, and Workforce affordable housing units which will provide safe housing options for residents in these income tiers. The developer is also proposing to collaborate with a daycare provider to offer a multi-shift daycare facility, which does not currently exist within the city of Oshkosh. The proposed project will implement the city’s strategic plan and the Housing Plan by offering low-income and workforce-affordable units and offer a solution to remove workforce barriers for those looking for childcare. Staff is proposing that Council approve a formal Development Agreement to be executed between the City, the Developer, and Wisconsin Partnership for Housing Development, Inc. The Developer requested that the Wisconsin Partnership for Housing Development, Inc. be a party to the agreement because they will be a financial partner for the development. City Staff found no issue with the request. City staff identified available funds from multiple city resources with funds set aside to facilitate housing and redevelopment projects. These funds will be utilized to provide the gap financing assistance instead of creating a Tax Incremental District to help fund the gap. This will allow new value of the development to be added to the city’s tax base immediately after construction is completed. Staff anticipates that the annual taxes collected will offset the city’s financial contribution quicker than a 27-year tax incremental district.  Key elements to the Development Agreement are:   The RDA will sell the property for $1.00, with property closing required by August 1, 2025. The City will provide $1,037,500 of gap financing support to the developer which will be reimbursed once the costs are incurred and paid by the developer. These will be verified by the City to ensure that incurred costs are from the project. The funds have been identified from different accounts that assist with housing development. The Developer was awarded Wisconsin Housing and Economic Development Authority (“WHEDA”) Low Income Housing Tax Credits (“LIHTC”) and State of Wisconsin Housing Tax Credits (“SHTC”) as a portion of the capital necessary to redevelop the Property application and will start construction in 2025. The City will provide $354,900 of ARPA funding to create a non-profit youth learning and development center that addresses the need for affordable childcare that serves both first- and second-shift working families. The City has submitted an application to the Wisconsin Economic Development Corporation (“WEDC”) for a $250,000 grant under its Community Development Investment (“CDI”) Grant Program, the proceeds of which the City will provide to the Developer upon reimbursement requests that are verified by the City, to assist with costs associated with the redevelopment of the Property. The Developer will be investing $19,291,481 in the project. The project is set to be completed by December 31, 2026.

FISCAL IMPACT

The parcels that the project is proposed to be constructed on are currently owned by the RDA making them tax exempt but the proposed development will convert the parcels to taxable. The developer is proposing to invest $19.2 million in the project. The city will provide its $1,037,500 in financial assistance for low-income housing through funds currently available in the Neighborhood Improvement Program; Blight Removal Program; and its Housing Study Implementation Fund.

RECOMMENDATION

The City Council approves the development agreement and authorizes staff to execute the development agreement.

Attachments RES 24-680 The Corridor PowerPoint The Corridor Development LLC DA

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