Milwaukee-based
Cobalt Partners is welcoming tenants to its first apartment building at its
Loomis Crossing development in Greenfield, but in order to keep development at the 38-acre site going amid ballooning development costs, Cobalt and the city have entered into a new development agreement.
Several years in the making, the Loomis Crossing development is slated to span both sides of I-894 at Loomis Road with a vision of nearly 300 apartment units, 40,000 square feet of office space and a public skate park, plus another 27 acres once envisioned as a business and logistics park.
Work on the project's first two buildings, both on the south side of the interstate, is wrapping up. An 84-unit apartment building is welcoming its first tenants this week and buildouts are being completed at a 40,000-square-foot office building, which will house Eye Physician Associates SC and Retina & Vitreous Consultants of Wisconsin.
This has been a combined $40 million investment, according to city officials.
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A rendering of Cobalt Partners' and Hammes Partners' office building at Loomis Crossing. Rendering from Rinka+[/caption]
However, since the project was first proposed, development costs have increased to the point that the existing development agreement between Cobalt and the city made the project infeasible, city officials said.
"(Development under the existing agreement) actually would have cost them more and they would not have realized a return," said
Debby Tomczyk, the city's legal counsel representative, at a Common Council meeting on Tuesday. "Likewise, if they had stopped construction, we (the city) would not be realizing the (tax) increment we hope for."
As a result, the city and Cobalt have forged a new development agreement that will support more development on the south side of the interstate, while keeping options open for other development on the north side of the interstate.
Cobalt has committed to constructing two more apartment buildings on the south side of the project with plans to begin construction on one of them this spring.
The city is further subsidizing this construction by shifting extra tax increment from a nearby tax incremental financing district (TID) at 84South, another Cobalt project, to the Loomis Crossing TID.
All but a few pieces of Cobalt's 84South project, a nearly 50-acre mixed-use development, are in place, and nearly all of the development's retail spaces have been filled.
"Because (the 84 South TID) has been wildly successful, it does have a very healthy increment generation, so as needed, we're going to be making additional donations from the 84 South TID to the Loomis Crossing TID to get us to the goal so the next multifamily buildings can be built," Tomczyk said.
The new agreement also withdrew financial assistance for any development on the north end of the Loomis Crossing project site at this time. The original plan showed some financial assistance, recognizing that the north end would need it.
"I suspect that if and when it is developed, that someone will need some sort of assistance, but it would need to stand on its own and not rely on any other developments,"
Kristi Porter, Greenfield community development manager, told BizTimes.
Further, the new agreement allows the city the option to purchase property in the north end of the property, which is owned by Cobalt, for $1 if the city is not receiving a return on its investment in the project.
"If we're not seeing the building we've been promised in the south and we're not seeing the north phase being constructed or being pursued by Cobalt, the city has the option, which we don't have to exercise, but we have the option to take back that property for a dollar and then we could find another developer," Tomczyk said.
"We're moving forward as if Cobalt would be the developer, but it's left an opportunity in case the circumstances change," Porter said. "It just leaves the door open for any future modifications to what the economy brings."
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Loomis Crossing site plan. Map from Cobalt Partners[/caption]
