Developer threatens to sue city of Kenosha for rejecting low income housing project

Bear Development, a division of Kenosha-based Bear Realty, is threatening to sue the city of Kenosha after the City Council killed Bear’s plans for a low income housing project.
The project was proceeding through the approval process until several city residents raised objections to the project, said Bear Development president S.R. Mills. The Kenosha City Council recently denied a remediation contract for the property, effectively killing the project.
Now Mills is threatening to take legal action against the city.
“We’re going to pursue every course of action at our disposal,” Mills said. “Legal action isn’t something that we look forward to, but unfortunately we feel we have been left no options.”
Bear had proposed a 70-unit, 3-building apartment complex called Uptown Gardens for a vacant 2.7-acre site southeast of 63rd Street and 18th Avenue in Kenosha. The property is part of the former Uptown Brass site that the city of Kenosha has been working for years to redevelop. Some development has occurred on the Uptown Brass site including a Pick ‘n Save grocery store and a school.
The city issued a request for proposals to redevelop the 2.7 acre site and selected Bear Development’s proposal. The company proposed an affordable housing project seeking low income housing tax credits through section 42 of the IRS tax code. The tax credits would be administered by the Wisconsin Housing and Economic Development Authority (WHEDA). Low income housing tax credits are sold by developers to banks or other financial institutions and the proceeds of the sale are used to provide equity for the financing for the project.
Section 42 is the same low income housing tax credit program that was proposed for a New Berlin apartment project that was rejected earlier this year after several residents raised strong objections.
To receive the low income housing tax credits, a developer has to offer below market rents to families with below average income levels.
For Bear’s Uptown Gardens project rents would have been $550 to $900 for the apartments which would have ranged from 750 to 1,400 square feet in size. The residents would have had income levels at or below $30,000 for an individual, $34,000 for a couple, $38,000 for a family of three and $42,000 for a family of four.
Some residents are concerned that the project would attract a criminal element to the neighborhood. But Mills said Bear would do background checks on all of its residents.
“We’ve been accused of busing in low income people from Chicago,” Mills said. “That’s preposterous.”
Low income apartments provide needed housing for many residents, Mills said. Without the tax credits the apartments could not be offered at affordable rents, he said.
“We have a need for low income housing,” Mills said. “It’s very difficult without some sort of assistance. (Section 42) is a great tool to allow high quality rental units to be created for those that need them.”
No other type of development project could succeed at the site because of the weakness of the overall economy and the site’s location several miles from I-94 in a neighborhood that has struggled for years, Mills said.
Bear Development still hopes to build Uptown Gardens, Mills said.
“We would love to construct these buildings,” he said. “We don’t want to sue anyone. We just want to be treated fairly. I still want to exhaust every possible opportunity to construct this building and move forward with the project as proposed.”

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