Board approves Howard Lofts apartment development
By Kevin Boneske
HOWARD – The village board has approved another apartment development in the Village Center.
Alliance Management, the company that currently manages and markets the nearby Howard Commons apartment complex, received final approval Monday, March 25, of a Planned Development District (PDD) and a development agreement for the 84-unit Howard Lofts to be constructed on three parcels with 6.1 acres.
The PDD for the new development calls for four 18-unit apartment buildings and one 12-unit apartment building with the following features:
• The unit sizes will include 40 two-bedroom, two-bathroom units; 28 one-bedroom plus den units; and 16 three-bedroom, two-bathroom units. The property will be staffed with shared leasing and maintenance personnel employed by Alliance Management.
• There will be a building height of approximately 32 feet at the peak of the roof with the street side of the buildings having the appearance of three-story structures, which will have a modern design and color scheme to complement the existing Village Center properties.
• Parking will be located behind the buildings to screen from street view with two additional buildings at the back of the site. There will be 84 attached garage spaces, 56 detached garage spaces, 84 tandem surface stalls and 60 surface stalls.
• The main drive lane connecting the two entrances will be 28 feet wide to accommodate community traffic during times of street closures for public events in the Village Center.
Construction on the first building is slated to start later this spring, with an additional building to start every two months.
The length of construction for each building is estimated at approximately seven months. Completion of the first building is projected around the beginning of 2020 with the last building finished in the fall of 2020.
Ryan Van Straten, co-owner of Alliance Management, appeared before the board to seek approval of the development agreement, in which the village is selling the property to the company for $1.
Van Straten noted the Howard Lofts, which will command lower rents by not having the same amenities as the Howard Commons, will have around a $150,000-per-unit cost to develop.
“With a less expensive building like this, you have to be very cognizant of the stacking of units, because you can’t afford as much soundproofing as a $200,000-per-unit building,” he said. “You’ve got to make sure you’ve got bedrooms over bedrooms and living rooms over living rooms. You end up with (two-bedroom, two-bathroom apartments) on the first floor, and then because of the loft, you end up with the (three-bedroom, two-bathroom apartments) on the second floor.”
Van Straten said LP Smart Side, instead of vinyl siding, will be used to provide a nicer look and fit in to the Village Center with the buildings already there, but raises the per-unit cost by several thousands of dollars, along with wider drive lanes increasing the asphalt cost.
“The competition that we’re going up against, other apartment complexes, if you were to build your standard two-story (apartment complex) today, you’re probably more than ($120,000 to $125,000 per unit) in that range,” he said. “We’re competing with very similar rent levels with these types of projects.”
Though he expects the Howard Lofts will be less profitable than a standard two-story apartment complex, Van Straten said the development agreement is “a good compromise.”
“We really believe in the Village Center, we think it’s going to be a great, long-term location for us, and so we’re willing to accept a little bit lower profit level initially,” he said. “But the flip side of that is, of course, we have the (Tax Incremental Financing incentives from the village) to at least get us to the point where the project is at least possible to do.”
The development agreement, which calls for a construction cost of not less than $11.7 million, also notes the village will be providing financial incentives for the Howard Lofts to develop the property with Tax Incremental Financing (TIF) with the project being located in TIF District No. 8.
The agreement calls for the village to return two-thirds of the new property taxes paid by Alliance Management annually for 15 years, which would also be the number of years remaining for TIF District No. 8 when the Howard Lofts project is completed.
When asked about whether the Howard Lofts would compete for tenants with the Howard Commons, Van Straten said the 28 two-bedroom, two bathroom apartments on the first floor of the Howard Lofts would be competing the most against the Howard Commons, for which he expects the first two buildings would be filled before marketing for the Howard Lofts would start.
“There’s still this massive demand for apartments right now,” he said.
The board last month approved construction bids and allowances totaling more than $9.1 million to construct a third, 45-unit building for the Howard Commons.
Buildings A and B now open for that apartment complex are 84 and 39 units, respectively.
Van Straten said he expects Alliance Management will make money on the Howard Lofts.
“It’s less than what I would have wanted to be able to make on a new project, and less than what I feel is necessary to cover the standard risk of a standard apartment complex… and so we’re willing to accept a smaller margin of error, because we believe in the Village Center,” he said. “We think, long run, it’s going to be a great location. Long run, we feel like rents are going to go up as fast as the market goes up for the next 20 years.”
Van Straten said he believes the Green Bay metro area “could probably take 2,000 or 3,000 more (apartment) units tomorrow and be totally fine.”
Trustee Craig McAllister, who noted be believes the Village Center is a good spot to locate the Howard Lofts, spoke out against the development agreement for the project.
McAllister said the problem he had with the agreement was the amount of taxpayer funds going toward a private development.
“I’m going to vote against the agreement, not because I don’t like the project,” he said. “I just don’t like the fact that taxpayers are again subsidizing more towards development, private development, on this much of a scale even.”
McAllister and Trustee Cathy Hughes cast the only dissenting votes against the development agreement.