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By LeAnn R. Ralph
COLFAX — The Colfax Plan Commission has recommended that the village board rezone a two-acre parcel along Dunn Street for a low-income housing project.
The current zoning is agriculture, and the requested zoning change is to Residential-5 for a multi-family three-story complex with 32 affordable apartments, said Lynn Niggemann, village administrator-clerk-treasurer, at a meeting of the Colfax Plan Commission November 4.
The building will have an elevator and will not be a walk-up, said Nick Surak, a representative for Woda Cooper Companies, Inc., Columbus, Ohio, the developer interested in building the apartment complex.
Woda Cooper is a national developer, owner and operator of affordable housing, he said.
The company has completed 300 projects in 15 states and is working on two rehabilitations in the Town of Adams and Green Bay, Surak said.
The Wisconsin Economic Development Association (WEDA) provides one opportunity per year for companies to apply for tax credits, and the deadline is December 11. The property must be rezoned for the tax credits application, and if it is not rezoned in time to submit the application, Woda Cooper would have to wait until next year to apply, he said.
The 32-apartment complex will have eight one-bedroom apartments, 16 two-bedroom apartments and eight three-bedroom apartments that would be affordable for people in the 60 percent median income range. The target population is people with a household income of $30,000 to $42,000 per year, Surak said.
Sewer and water
Peter Kilde, executive director of WestCAP (West Central Wisconsin Community Action Agency), said he had been in contact with Woda Cooper about the project because the company is interested in extending sewer and water service from WestCAP’s Colfax Prairie Homes west of the proposed site for the Woda Cooper development.
WestCAP is supportive of the project because affordable housing is difficult for low-income families, Kilde said.
Even though the Woda Cooper project would be competing with WestCAP for limited tax credits, anything that can be done to bring state money to this area of Wisconsin, “I’m all for it,” he said.
Kilde said he checked online for Woda Cooper developments, and he was satisfied with the quality of the work.
“We’d be happy to have you as neighbors,” Kilde said.
More residential and commercial development helps the village, said Scott Gunnufson, village president, adding that he appreciates the support of WestCAP.
Housing projects are assets for municipalities because they bring in more residents who then in turn will shop locally, Kilde said.
Colfax is appreciative of the Prairie Homes for how well the property is kept up and for the housing opportunities, Gunnufson said.
Niggemann said she had recently had a meeting with representatives of Woda Cooper about the taxable portion of the proposed development.
One of the financing mechanisms for the Woda Cooper properties would be to use Tax Increment Finance District funds by paying the property taxes annually and then receiving a rebate that is then in turn used to support the debt on the project, Surak said.
The ability to use the TIF funds this way helps make housing projects be competitive in terms of applying for the tax credits, he said.
WEDA has a scoring system for the tax credit applications, and one metric is where the financing comes from. It is an area where the application is graded, and it affects competitiveness, Surak said.
The agreement for a rebate on taxes is not required to be completed at the time the application is submitted, but everyone should be “on the same page” about refunding some of the property tax money, he said.
The TIF district would still be receiving some of the property tax money, but Woda Cooper would not have to pay the full tax bill, Surak said.
For example, if the property taxes were $24,000 per year and $20,000 was refunded to Woda Cooper, that would make the application more attractive for tax credits, he said.
The Joint Review Board for the village’s TIF districts planned to meet November 9 before the village board meeting. Sean Lentz of Ehlers, the village’s financial consultant, planned to attend both the Joint Review Board and the village board meeting and would be able to give more information on whether the refund of property taxes from the TIF is feasible, Niggemann said.
The question is whether TIF 4 can fund the request, and if it cannot, then the village board would need to evaluate whether it would make sense to start a new TIF district, she said.
The value of the project plus a discount for the income of the residents results in a new assessed value. For example, on a $4 million project, the assessment would be 50 percent, or $2 million, Niggemann said.
The request from Woda Cooper for a tax refund is similar to the request the village granted to Timber Technologies for the company’s new addition, Niggemann said.
After Timber Tech pays the tax bill for the addition, the village will refund some of the money that Timber Tech can then use for paying toward debt on the addition, she said.
The advantage of refunding some of the property tax on the increment for new value going into the TIF fund is that the money is not coming out of the village’s pocket, Niggemann said.
In a TIF district, property taxes on new construction that would normally be paid to the village, the school district, the county and the technical college district go into a special fund to help finance additional infrastructure in the TIF district, such as streets. When the TIF district eventually closes out, the village, the school district, the county and the technical college district receive their share of the money remaining in the fund.
The timeframe for the number of years when a portion of the taxes are refunded would be stated in a developer’s agreement, Niggemann said.
Lentz planned to talk about the timeframe at the village board meeting, but it would tentatively be a 15-year turn-around, she said.
Lentz is the expert on TIF districts and will know what state law will allow, Surak said.
TIF 4 has five years left until it must be closed out, and that’s why the village would have to consider a new TIF, which would have a 20-year period available for the incentives, Niggemann said.
“Pay as you go” to receive a portion of the property taxes back is preferable for small municipalities that do not have large amounts of cash available, Surak said, adding that Colfax is not like Madison, where there is quite a lot of up-front money available.
If the village refunds some of the property tax money, then the village does not have to write out a check to help the project, Niggemann said.
Gunnufson asked whether there were any plans drawn up yet for the proposed development.
The 32-unit apartment complex will be a $6.4 million project, but when Woda Cooper applies for the tax credits, schematics are sufficient and blueprints will be drawn up later, Surak said.
As schematics and other information becomes available, Surak said he would be sharing the information with the village.
Woda Cooper will find out in April if the company has received the tax credits, he said.
The timeline for the tax credits is that the application is due December 11, and then it will take WEDA four months to review the applications, with the announcements coming in April, Surak said.
Construction would then be expected to take place the following spring in April of 2022. Completion of the project will take one year, and the apartment units will be ready for occupancy in April of 2023, he said.
The timeline is two and a half years from starting the process, such as seeking a rezone now, to the time until residents can move in, Surak said.
Colfax’s ordinances require three acres for an apartment complex, and the parcel in question is 2.17 acres. Woda Cooper would need to make a variance request as well to build on the identified parcel, Niggemann said.
A three-story building is being considered so there is room for parking, Surak said.
“Going up” is cheaper than “going out” and is more efficient in the construction process, he said.
Woda Cooper is a long-term owner. The company does not sell the properties and must be willing to “live with” the construction projects over the long haul, Surak said.
The company does not cut corners on construction costs and on fixtures, such as cabinets. The quality of the construction materials is high. There is a misperception that if a project is low-income housing, it will have cheap cabinetry and cheap carpets, he said.
The Colfax Village Board and the plan commission welcome the opportunity for the village, Gunnufson said.
A motion to recommend the village board rezone the property on Dunn Street from agriculture to R5 multi-family was unanimously approved by the Colfax Plan Commission.
Voting in favor of the motion were plan commission members Logan Michels, Mike Buchner, Jason Johnson, Dave Hovre and Gunnufson.