Shorewood approves assisted living facility
Project valued at $20 million; village would also get river bluff property
Shorewood — Plans for the development of a $20 million senior living facility on Capitol Drive at Shorewood's western edge will proceed, with the help of a $1.7 million incentive from the village.
The Village Board on Tuesday, at the recommendation of the Community Development Authority, approved a development agreement with Harbor Retirement Associates for a 94-unit assisted living and memory-care facility at the former Pig N' Whistle and Sherburn Place Apartments sites on Capitol Drive, which falls in the village's third tax incremental financing district.
Harbor Retirement Associates expects to close on the sale of the property by April 1, with construction likely to begin soon after, Village Manager Chris Swartz said. If the developer does not close on the sale by July 31, the development agreement would be terminated.
Under the agreement, the development, which will include approximately 59 assisted living units and 35 memory-care units, is guaranteed to have a value of at least $20 million upon completion, slated for 2015. The first full assessment on the property would occur in 2016, said attorney Bruce Block, who assisted the village with preparing the agreement.
Block described the project as straightforward and similar to another proposal previously considered for the site, although slightly larger in size and greater in value. Upon completion of the project, the village will provide the developer with a grant of $1.7 million, Block explained, and the developer will convey Milwaukee River bluff property back to the village.
The value of the grant was determined based on a variety of factors, Block said, primarily that it satisfy an internal rate of return of 16 percent. If total project costs come in below estimates provided to the village, the amount of the village grant would be reduced by 70 percent of the savings, per the agreement.
The village grant would be repaid through tax increment generated by the property. In his financial analysis of the project, Ehlers financial adviser Michael Harrigan noted that the village's TIF District No. 3 has an existing decrement of slightly more than $5 million, due to demolitions and general value decreases. That deficit would need to be recovered before the village could collect any increment in the district. Still, Harrigan anticipates the project would lead to positive cash flow in the TIF beginning in 2016, with the debt for the $1.7 million incentive being paid off by 2022.
In addition to the grant, Swartz said the village likely will need to cover the cost of extending up to 400 feet of water main from the north to the site. However, that infrastructure could also serve the back property as well, Block noted.
As for the bluff property along the river, the village is planning to install a walking path at the top of the bluff, west of the road, Swartz said, which would connect with the Oak Leaf Trail between Hubbard Park and the private parcel. Restoration work at the base of the bluff is also planned, for which the village likely will seek grant funding this year through the Wisconsin Department of Natural Resources.
Block recommended that the village begin working on the certified survey map for the site as soon as possible, to prepare for the transfer of the bluff property, which is valued at about $16,000. The certified survey map would come back to the board for approval at a later date.
The development agreement will be signed by the developer and village officials pending final administrative changes.
AT A GLANCE
The development agreement between Harbor Retirement Associates and the village of Shorewood can be viewed in the packet for the Jan. 21 Village Board meeting. To access the packet, visit villageofshorewood.org and click on the appropriate meeting from the calendar at left. Then select "Village Board Agenda with supporting documentation." Details on the agreement begin on page 26.
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