Oak Creek’s common council recently agreed to provide $14.9 million in financial assistance toward the third phase of the Emerald Row multifamily development in Drexel Town Square.
Developer Barrett Lo Visionary will construct 100 multi-family units on a 1.4-acre parcel adjacent to the existing Emerald Row apartments. Another building with 299 units on 7.2 acres near the southeastern corner of Drexel Town Square will also be built.
City Administrator Andrew Vickers said the project will help with density in Drexel Town Square. Additionally, with incentivized underground parking and architectural quality, the development will round out the square in a way that is “classy and timeless,” Vickers said.
Construction on the new buildings is likely to start in the first half of 2024.
What’s in the agreement?
- Barrett Lo Visionary must provide evidence of at least $100.2 million in actual capital expenditures on the project with an equity contribution of at least $18.5 million as part of the agreement.
- The project must maintain set minimum assessed values each year for the new parcels, ranging from a combined $9 million assessed value in 2024 up to $70,982,750 in 2032 and thereafter.
- If the assessed values hit their minimums, the city will distribute up to $8.4 million as a PAYGO in annual property tax refunds to the developer by 2032.
- Oak Creek will also issue a city loan up to $6.5 million which can only be drawn upon after the developer’s equity is expended.
- If any refinancing events occur, no proceeds will be distributed to the investors until the city is paid back for the loan.
Past assistance and the future of Drexel Town Square’s final parcel
The council also voted on May 16 to eliminate profit sharing provisions from preceding agreements. Vickers said this was a financing strategy allowing the developer to pay off loans to the city for the phase two project.
“Instead of them paying our phase two loan entirely, equity partners will be likely to take the profits from phase two and invest in new phases three and four,” he said.
Oak Creek assisted with the first two phases of Emerald Row with a combination of a loan and grant for the first phase and a grant in phase two. The first phase was completed in 2016 and the second in 2021.
This project leaves only a 1.6-acre parcel in Drexel Town Square yet to be developed of the 85 acres that was formerly the Delco/Delphi plant.
Vickers said there has been a lot of interest in the last parcel in recent years, but nothing has materialized.
“It will take a unique restaurant or retail user to fit the space,” he said.
Contact Erik S. Hanley at[email protected]. Like his Facebook page,The Redheadliner, and follow him on Twitter@Redheadliner.