Developer Arthur Sawall plans almost 240 new apartments and townhouses in downtown Sussex over the next five years to redevelop two properties and expand his Mammoth Springs community.
Village officials are working with Sawall and in coming months will consider $7 million in support and infrastructure spending to support the projects, said Jeremy Smith, village administrator. The projects represent a $32 million investment.
“This is part of redeveloping our downtown,” Smith said. “We’re redoing Main Street. It’s about trying to bring the population and the opportunity to stimulate additional retail.”
Sawall in 2013 partnered with the village for his Mammoth Springs apartment community at Main Street and Highway 74. Sawall said the first two apartment buildings, with 60 units, were absorbed in less than six months last year. One with 30 apartments opened April 1, and 24 units are occupied. Another will open May 15, and has nine of 30 units pre-leased, he said.
“Initially I had planned to do one building per year,” Sawall said. “I have done two buildings per year. The lease-up has been better than expected.”
Sawall is phasing in his next projects in Sussex next year, starting with townhouses and new apartments along Silver Spring Drive south of Main Street. He said he is closing this week on his purchase of a 7.5-acre farm site there.
In April 2016, Sawall plans to start work on the first of 34 condo townhouses in 17 buildings. In July 2016, he said he will start work on a neighboring building with 30 to 36 apartments fronting on Silver Spring Drive. Sawall said he is considering reserving that building for residents ages 55 and up.
Fronting on Main Street at Silver Spring Drive, Sawall plans to buy and demolish a gas station and two houses to clear land for a three-story building with 57 high-end apartments, Smith said. That project requires the village rebuild Silver Spring Drive, which cuts diagonally through the center of the property. That work would cost about $1.3 million, Smith said.
Sawall said construction on that building would start in 2017. He said the market is strong, but he is being cautious in spreading out his construction timelines to avoid overbuilding. He plans to start work this summer on the last building in Mammoth Springs, which would bring the apartment count to 150 units there.
Also this year, he plans to start work on a 146-lot subdivision in Sussex at Maple Avenue across from Armory Park.
“I’m a little bit cautiously optimistic,” Sawall said. “You’ve got to be a little bit careful on the absorption because there is so much product coming onto the market.”
Depending on how fast the apartments along Silver Spring Drive lease up, Sawall said he will start work in 2017 or 2018 on new units south of his Mammoth Springs property. He is seeking approval for four new buildings south of the quarry pond at Mammoth Springs. Those include two buildings, each with 14 townhouse-style apartments with individual entrances and attached garages. Also planned are two buildings with 36 and 30 units, respectively, Smith said.
North of Mammoth Springs on Main Street, Sawall plans to acquire and demolish a property with a NAPA auto parts store and a Laundromat. In its place, he would develop a four-story building with 24 apartments with a 1,200-square-foot retail space and interior parking on its first floor. That would be the last segment of his current building campaign.
Village officials are considering $5.7 million in incentives for the projects, Smith said. That money would come through a tax incremental financing district. A hearing on the district will be held in May.
Sawall said the money helps cover the cost of redeveloping properties along Main Street that already have buildings. Also, the gas station, for example, will require site cleanup before it can be redeveloped, he said.
“Whenever you do redevelopment, you really need TIF funds for projects to work,” he said. “The numbers do not add up because properties need to be acquired. They need to be demolished. They need to be cleaned.”
Written by Sean Ryan for the Milwaukee Business Journal
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