District accepts $1 million offer to purchase OMS
Offer still contingent on getting tax credits
Oconomowoc Area School District - The district has accepted a $1 million offer to purchase the former middle school property from an Oshkosh developer that plans to convert it into affordable rental apartments.
Keystone Development would rehab the facility to offer loft-style apartments that feature amenities including garages, a fitness center, community room, and Internet café.
The offer is very similar to an offer the board received in 2009 from Gorman & Co. that fell through when that developer failed to obtain the necessary tax credits for the project.
"It's similar in that it proposes to covert the middle school into 55 one-, two- and three-bedroom apartments," explained Assistant Superintendent of Business Services, Mike Barry.
"Like the Gorman proposal in 2009, this 2011 proposal is entirely dependent on tax credit financing from Wisconsin Housing Economic Development Authority (WHEDA). The next step in this process will be gaining approval from the City of Oconomowoc and then an application to WHEDA for tax credit financing," he said.
That begins a waiting period where projects are evaluated for available tax credits.
"We won't know the outcome to this scenario until next summer," Barry said.
"Tax credit applications are in January or February 2012; decisions are typically announced anywhere from April to June," he added.
Barry said Keystone may be able to take a cue from recent history.
"This developer has the advantage of learning from the Gorman 2009 application and understanding how that project was rated or scored by WHEDA. You would think that now, two years later, this new developer could use that to their advantage and tailor the project so it scores just a bit more favorably and earns the tax credits," he explained.
Board President Don Wiemer believes the project is a "great fit for the city."
"It's going to fit in the neighborhood and bring affordable housing with 55 units that don't exist now," he said.
"When you're looking at $1.8 million to raze that building if we don't sell it, I'd rather walk away with $1 million and apply that against debt in the district than to have to go out and borrow to tear it down and have eight acres of bare land," Wiemer added.
"It's all going to be down to the tax credits, that's what will make or break this deal. Keystone will have to do their due diligence and make sure they are awarded the tax credits," Wiemer said.
Barry said the district will assist the developer in approaching the city regarding the proposed project.
"The early indications are from the city is that they are interested in supporting the project. But there is a lot of work to be done," Barry said.
The nearly 100-year-old facility has not been resting on its weary laurels, however. It is preparing to celebrate its third year serving as the most appropriate host for a district fundraiser called Haunted High.
The former middle school transforms itself each Halloween for a fright fest that scares up money for educational grants for teachers in the district. Last year's efforts raised $85,000 to meet needs and wants that go unanswered in difficult budgeting years.
In the offer to purchase the property, the district has stipulated and the buyer has agreed that Haunted High will take place in the former school site this year and in 2012.
"The project is a great idea and something that I think will serve the community and the school district. The board is very concerned about letting that building sit empty for too long. We're very hopeful and would love to partner with a developer who would like to turn that into something and put it back on the tax roll," Superintendent Dr. Pat Neudecker said.
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