Developer seeks $1.2 million loan from Verona affordable-housing fund for 60-unit mixed-use project at North Edge Trail

Northpointe Development told the Verona Common Council it is requesting a $20,000-per-unit loan from the city’s affordable-housing fund to help fill a financing gap for a proposed 60-unit mixed-use development at 1050 North Edge Trail.

Sean O'Brien of Northpointe Development summarized the project and financing request and said the city loan would be structured as a loan payable after certificate of occupancy: "what I'm gonna be asking for tonight is $20,000 a unit, or $1,200,000 out of the affordable housing fund." He said the request is smaller than an earlier ask of $35,000 per unit and that Dane County has committed about $3,000,000 to the development.

The council heard that the planned building would include 60 apartments (36 one-bedroom, 11 two-bedroom and 13 three-bedroom units), roughly 2,400–2,500 square feet of first-floor retail space, a mix of income targeting at 30%, 50% and 80% of county median income, underground parking and on-site management. O'Brien said the project seeks state competitive tax credits through "WEDA/WIDA" and that his financing plan depends on receiving those awards: if the tax credit decision is unfavorable, he warned, "this could be all for not" and the project may not proceed.

O'Brien said the developer plans enhanced sustainability and services compared with prior projects: higher energy certification goals (including a targeted "lead 0 energy" certification and Energy Star multifamily construction), on-site solar and a weekly, on-site case worker funded from property operating income. He said that running supportive services on-site weekly would provide more frequent contact than the "quarterly touches" typical for similar developments.

Council members responded with generally favorable comments while asking detailed questions about rent caps, unit mix, the loan term and the project's contingency on state awards. Alder Tucker Long asked whether the on-site services for the new building would be provided to residents at another Northpointe property; O'Brien replied that services would be paid for by the new property's operating budget and would be specific to that site. When asked how critical the $1.2 million figure was, O'Brien said it was important but that "if it's something that's, you know, close to that, we have some work to do" and the developer would" certainly try to make it work." He added: "if the city were to invest at this level... we would be able to move the project forward 100%."

No formal action was taken. Council members voiced general support for workforce housing and the project's sustainability and supportive-service elements but emphasized the project's dependence on state tax-credit awards. Council members asked staff and the developer to return with more detailed loan documents and confirmed the matter will return for later action if needed to meet program timelines.

The council discussion also included finance and program details presented by O'Brien: the developer seeks a 17-year loan term to align with a 15-year compliance period tied to the state tax-credit program; the loan would be disbursed only after certificate of occupancy; Northpointe reported an estimated leverage ratio of roughly $18 of other funding for each $1 of city support. O'Brien said the developer had reduced the per-unit ask to keep the project's cost to the city lower than typical TIF-based assistance and noted the project would increase the city's tax base if built.

The council asked follow-up questions about lease-up expectations, unit demand and the developer's experience running comparable projects. O'Brien said similar properties typically pre-lease about half the building and reach stable occupancy within months. Several alderpersons said they favored the project's mix and sustainability features and urged staff to return with a recommendation and loan documents should the developer secure tax credits.

If the council ultimately approves a loan, staff told the council that city funds would not be advanced to the project until the developer has built the project and reached certificate of occupancy, and that any loan terms would be laid out in binding loan documents to be returned to council for approval.