The Capital Times

Grocery store, affordable housing in the works for east Madison’s Union Corners

BRYNA GODAR | The Capital Times | bgodar@madison.com

After months of planning and repeated delays, pieces of Gorman & Co.’s Union Corners project are starting to fall into place.

The project combines a UW Health Clinic, affordable housing and retail on the vacant two-block site along East Washington Avenue, Milwaukee Street and Winnebago Street.

The city approved the medical clinic in early October and the City Council allocated tentative funding for the residential piece in early December. The developer has mentioned potential grocery tenants in neighborhood meetings on the project.

Although the final residential plans have yet to be approved, the developer has proposed two mixed-use buildings, consisting primarily of affordable housing.

In December, the City Council approved the allocation of up to $3 million to assist Union Corners along with two other affordable housing projects: Maple Grove Commons and Tennyson Ridge. All three will be applying for tax credits from the Wisconsin Housing and Economic Development Authority and pre-determined city assistance can aid in that process. The final dollar amounts will be worked out in January.

The Union Corners project will include a total of 90 units, 14 going at market rate and 76 marked as affordable with a range of one to three bedrooms. The majority of the affordable units will target those making 60 percent or less of the area median income, with some targeting those making 20 percent or less.

There will be underground parking and retail on the ground floor of each building, which front Winnebago Street.

Gorman & Co. has also said it is working to bring a grocery store to the development, possibly Fresh Thyme Farmers Market.

The overall project and its components have drawn mixed reactions and desires from the neighbors, including conversations about what “affordable” means and what the buildings will look like.

A second neighborhood meeting on the project will take place Thursday, Jan. 8, 5 p.m. at the Goodman Community Center. The Gorman & Co. team will discuss updates on the proposed building design and the WHEDA application for tax credits.

The construction dates for the project have repeatedly been pushed back and groundbreaking on the residential component is now slated for January 2016 if financing goes through.

City presses Gorman on Union Corners building design

By Mike Ivey, Capital Times, May 11, 2014

Union Corners, one of the most anticipated redevelopments in recent memory, will get a review by the Madison Plan Commission Monday night.

Developer Gorman & Co. recently made some significant changes to its plan for the long-vacant site, including moving the UW Health clinic off of the corner of East Washington Avenue and Milwaukee Street.

Rather than anchoring the high-profile corner, the $20 million, two-story clinic building is now shown at the corner of East Wash and Sixth Street. Instead of the clinic, the new plan shows a pair of four- to six-story mixed-use buildings fronting East Wash and Milwaukee Street.

Those changes were applauded by nearby residents and the Schenk-Atwood-Starkweather-Yahara neighborhood group.

But city planners in a new report are emphasizing that any new buildings must be well-designed and attractive.

“Perhaps the most important factor to be considered during the review …. will be the architectural treatment of the individual buildings across the site,” writes city planner Tim Parks.

Moreover, since the project will serve as something of a gateway into the downtown, new buildings must contain “significant visual interest” from both East Wash and Milwaukee Street, Parks adds.

That means hiding garage doors, trash enclosures and loading docks while requiring building facades be “well articulated, porous and highly activated.”

The updated plan from Gorman does place most of the surface parking behind the buildings to make it less visible from the street; reduces the height of two apartment buildings at the back of the site and includes two pedestrian walkways through the middle of the 11.5-acre site.

Gorman & Co. says it now hopes to break ground in the fall if all the approvals are in place by that point.

Also Monday, the commission will consider final plans from developer Jim Stopple for a 12-story 115-unit apartment at 617 N. Segoe Road behind the Hilldale Shopping Center.

That project has faced strong opposition from owners in the luxury Weston Place condos next door, who say the apartment contains too many units and is out of scale with the rest of the neighborhood.

City planning staff is recommending approval of the project in a report but urges the commission to carefully weigh comments during the public hearing Monday.

“Although the proposed project is large, and large on its site, the Planning Division believes it may be possible to find the applicable standards are met,” writes city planner Kevin Firchow.

The Plan Commission hearing begins at 6 p.m. in Room 201 of the City County Building, 210 Martin Luther King Jr. Blvd.

Union Corners plan gets total makeover

By Mike Ivey, Capital Times, April 29, 2014

Gorman & Co. has made significant changes to its development plan for the long-vacant Union Corners site, including moving the UW Health clinic off of the corner of East Washington Avenue and Milwaukee Street.

Rather than anchoring the high-profile corner, the $20 million, two-story clinic building is now shown at the corner of East Wash and Sixth Street.

Instead of the clinic, the new plan shows a pair of four to six story “mixed-use” buildings fronting on East Wash and Milwaukee Street.

Also, the updated plan moves most of the surface parking behind the buildings to make it less visible from the street; reduces the height of two apartment buildings at the back of the site and includes a pedestrian walkway through the middle of the 11.5-acre site.

Gorman & Co. project leader Joe Schwenker says the changes came after meetings with city planners, the Mayor’s office and the neighborhood.

“Various concerns were addressed and these modifications resulted in an improved plan,” says Schwenker.

Gorman & Co. says it now hopes to break ground in the fall if all the approvals are in place by that point.

The new plans are scheduled to go before the Plan Commission on May 12.

The earlier plans from Gorman released in January created a firestorm of reaction from nearby residents and the Schenk-Atwood-Starkweather-Yahara neighborhood group, which had been closely involved in the redevelopment process.

The city Urban Design Commission then ordered Gorman to come up with some different plans.

The new plans were presented at a neighborhood meeting Thursday night and got a mostly positive response, according to a report in Isthmus.

“The GDP (general development plan) has improved immensely and the neighborhood gave it a warm reception last week,” says District 6 Ald. Marsha Rummel.

In 2003, developer Todd McGrath had plans to turn the former Rayovac battery plant and a vacant grocery store site into a mix of housing, retail and open space. The $70 million project was seen as a catalyst to spur development along the East Washington Avenue corridor.

When the recession hit, however, McGrath lost the property in a voluntary foreclosure. The city bought the land from M&I Bank for $3.57 million in 2010, anticipating that it could find a private developer to take over the site when the economy turned around.

In July 2013, the city sold the property to Gorman for $1 instead of making a TIF loan to the developer.

Madison aims to recoup its estimated $6 million in land and infrastructure costs through new property taxes generated by the development.

City panel wants Gorman and UW Health to redo Union Corners plan

By Mike Ivey, The Capital Times, January 24, 2014

It’s back to the drawing board at Union Corners.

The city Urban Design Commission on Wednesday told Gorman & Co. to take  another stab at a general development plan (GDP) for the 11-acre site at  Milwaukee Street and East Washington Avenue.

The problem is that the new plans presented to the city are vastly different than  plans shown when Gorman was selected by the city to develop the long-vacant  parcel.

“UDC said the proposed GDP is not approvable as presented and suggested that  Gorman get UW Health to the table,” said Ald. Marsha Rummel, who represents the  east-side district.

The initial proposal from Gorman — which played up amenities like a new  library, small scale shopping and public spaces — was generally supported by the  neighborhood during a series of meetings two years ago.

But new plans featuring a $20 million, two-story UW Health  clinic on the corner of East Wash and Milwaukee include more surface parking  and less greenspace. The new plans also show two large apartment buildings  adjacent to the existing neighborhood where original plans had the larger  buildings fronting the busier East Washington.

One issue the UDC wants to see addressed is how the clinic would relate to  the rest of the development and whether it should face the street or not. That  was an issue with another UW Health clinic built at the former Bancroft Dairy  site on South Park Street.

“Union Corners is a pretty important site that has already gone through a lot  of planning so we need to make sure we do it right,” said Melissa Huggins, a  member of the citizen panel which reviews real estate developments.

Developer Todd McGrath in 2003 had proposed a major project at Union Corners  but those plans evaporated amid the housing bust.

The city eventually purchased the property out of foreclosure in 2010 and  sold it to Gorman for $1 in lieu of any tax incremental financing assistance.  Developers hope to begin construction on the clinic building in late summer,  with UW Health looking to move in during the summer of 2015.

At $20 million, the initial phase of development would deliver some $400,000  in annual property tax revenues.

Gorman has cautioned the plans could change with market conditions,  especially if the demand for owner-occupied condominiums or townhomes picks up.  Development would take place in phases over several years.

Gorman spokesman Joe Schwenker says his firm will revise its proposal and  share it with the neighborhood and Ald. Rummel before going back to the UDC in  March. The developers are also going to communicate the desire of UDC members to  speak directly with UW Health officials over the layout of the clinic.

John Steines of the Schenk-Atwood-Starkweather-Yahara Neighborhood Association  has been involved in planning for the site since McGrath was involved. He says  the neighborhood isn’t against development but wants it to reflect the values of  the community.

A particular sore spot for some east-siders is removal of the “woonerf,” a Dutch term for a street where pedestrians and  cyclists have legal priority over motorists. That feature was shown in the  initial plans but left out of the new edition.

“We believe a positive outcome can result through the enlightened engagement  of those who care about the importance of careful planning and design,” he said. “But the new plan is significantly retrograde in quality.”

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Union Corners site plan changes get cool neighborhood reception

By Mike Ivey, The Capital Times, January 22, 2014

New revised plans for the long-vacant Union Corners site at East Washington Avenue and  Milwaukee Street are getting an early thumbs down from some east-side  residents.

Issues being raised include the amount of surface parking for the UW Health  clinic that will anchor the project, the size of the apartment buildings shown  in the drawings and the lack of any significant green space.

“My basic concern is why are the plans we are seeing now so dramatically  different than what was first presented?” says Ken Fitzsimmons, who lives  directly behind the site on Farwell Street.

The plans from Gorman & Co., scheduled for an  informational presentation before the city Urban Design Commission Wednesday,  show some changes from those first presented in 2012 when Gorman was selected as the developer for the 11-acre  site.

New plans feature a pair of four-story apartment buildings at the rear of the  site where it abuts the neighborhood. Initial plans showed the development  stepping back in scale, with the biggest buildings along East Washington Avenue  and smaller buildings toward the back.

“I realize it’s still early in the process, but this is a big deal to us and  we want to know what is going on,” says Fitzsimmons, education director at  Madison Music Foundry and a member of the popular local band, The Kissers.

The city purchased the property out of foreclosure in 2010 and is selling it  to Gorman for $1 in lieu of any tax incremental financing assistance. Developers  are hoping to begin construction on a $20 million, 2-story, 60,000 square foot  clinic building in late summer, with UW Health looking to move in during the  summer of 2015.

The developers have cautioned the plans could change with market conditions,  especially if the demand for owner-occupied condominiums or townhomes picks up.  Development would take place in phases over several years.

But comments posted on the Schenk-Atwood-Starkweather-Yahara (SASY) Facebook page are  showing some major discontent. The initial proposal from Gorman — which  played up amenities like a new library, small scale shopping and public spaces — was generally supported by the neighborhood during a series of earlier  meetings.

Dan Melton writes that he supported the 2012 plans but is worried the  developers are shifting direction in order to maximize return at the expense of  existing residents.

“If Gorman & Co. went back, crunched the numbers, decided they couldn’t  make a profit with the earlier 2012 site plan, then they should have leveled  with us, presented the neighbors with options — and heard which of the  potential site plan changes had support,” writes Melton.

District 6 Ald. Marsha Rummel has been monitoring the  neighborhood comments and has passed them along to the developers. She is urging  residents to attend the UDC meeting, which is scheduled for 4:30 p.m. in Room  LL110 of the Madison Municipal Building.

“I really appreciate the comments and you can be sure I will represent the  collective disappointment that has been expressed here,” she writes in a SASY  Facebook post.

Gorman spokesman Joe Schwenker declined to offer any additional comments  pending the discuss at the UDC meeting.

Drew Hanson, who lives a block from the site on Milwaukee Street, says his  family uses the site now as an ice skating rink and would prefer to see it  developed in a way that enhances the Schenk-Atwood neighborhood. He takes issue  with claims the property is one of the bigger eyesores in the city.

“The plan is supposed to include interesting community space, a commons,  community gardens, pedestrian friendliness and more for the neighborhood to get  excited about,” he writes in an email to the city. “Gorman’s UW clinic renderings that  appeared this week in the CapTimes are none of these things.”

Over the past decade, Union Corners went from one of the most promising  development projects in Madison history to one of its more visible  disappointments.

In 2003 before the housing bust, developer Todd McGrath had plans to turn the  former Rayovac battery plant and a vacant grocery store site into a mix of  housing, retail and open space. The $70 million project was widely hailed as a  game changer that would help spur development along the blighted East Washington  Avenue corridor.

When the recession hit, however, McGrath ended up losing the property in a voluntary  foreclosure. The city of Madison bought the land from M&I Bank for $3.57  million in 2010, with the expectation it could eventually find a private  developer to take over the site once the economy improved.

The city solicited proposals for the site and chose Gorman after other  developers dropped out. In July 2013, the city sold the property to Gorman for  $1 instead of making a TIF loan to the developer.

Madison aims to recoup its estimated $6 million in land and infrastructure  costs through new property taxes generated by the development.

Union Corners construction could begin this summer

By MIKE  IVEY | The Capital Times | mivey@madison.com, January 18, 2014

Developers are close to breaking ground at Union Corners on Madison’s east side, the high-profile but  long vacant parcel at East Washington Avenue and Milwaukee Street.

Gorman & Co. has filed an application with the city for Phase I of the  project, a $20 million, 2-story, 60,000 square foot UW Health clinic.

The general development plan (GDP) will be presented before the city Urban Design Commission at its Wednesday meeting.

Developers are hoping to begin construction on the clinic building in late  summer, with UW Health looking to move in during the summer of 2015, says Gorman & Co. spokesman  Joe Schwenker.

The clinic will occupy the corner of East Washington Avenue and Milwaukee  Street.

More development is slated for the rest of the 11-acre site and plans show a  mix of residential and commercial buildings along both sides of a rerouted  Winnebago Street.

But Schwenker cautions that plans are fluid and could likely change.

“It’s all going to depend on market conditions,” he says.

Also at Wednesday’s UDC meeting, developers will present plans for a 12-story, 109-unit apartment building at 617 N. Segoe Road  near Hilldale Shopping Center.

That project from Madison landlord Jim Stopple has generated strong neighborhood opposition, both from residents in the  adjacent Weston condominiums and those living on the quiet streets behind the  mall.

Over the past decade, Union Corners went from one of the most promising  development projects in Madison history to one of the city’s worst eyesores.

In 2003, before the housing bust sent the national and local economies into a  tailspin, developer Todd McGrath had plans to turn the former Rayovac battery  plant and a vacant grocery store site into a mix of high-density housing,  shopping and open space. The $70 million project was widely hailed as a  game-changer, something that would finally spur development up and down the  blighted East Washington Avenue corridor.

When the recession hit, however, all those dreams were drowned in a river of debt, and McGrath ended up losing the  property in a voluntary foreclosure. The city of Madison eventually stepped in,  buying the land from M&I Bank for $3.57 million, with the expectation it  could eventually find a private developer to take over the site once the economy  improved.

The city solicited proposals for the site and eventually selected Gorman  after other developers dropped out. In July 2012, the city sold the property to  Gorman for $1 in lieu of making a TIF loan to the developer.

The city hopes to recoup its estimated $6 million in land and infrastructure  costs through new property taxes generated by the development.

 

Developer Gary Gorman was through with Madison — now he’s back for Union Corners

Gary Gorman at his desk at Gorman & Company’s headquarters in Oregon,  Wis.

Seven years ago, after negotiations over city assistance for a development on  the 800 block of East Washington Avenue soured, Gary Gorman  vowed never to work in Madison again.

Gorman had invested two years in “Avenue 800,” initially proposing an $85  million mixed-use project with 309 condominium units in nine buildings, later  downsizing it after the city balked at his request for $7.8 million in tax  incremental financing (TIF). The two sides eventually parted ways over a $1  million difference in TIF, leaving the high-profile parcel next to Breese  Stevens Field vacant to this day.

It wasn’t the award-winning developer’s first dust-up with the city.

Gorman previously was stymied by neighborhood activists from razing the aging  Quisling Clinic at 2 W. Gorham St. to make way for a seven story, 101-unit  apartment. While the art moderne structure was eventually redeveloped into 60  apartments, Gorman maintains he lost money on the deal.

“I won’t say I wouldn’t do another downtown Madison project, but you have to  weigh the rewards with the risks,” he told The Capital Times in a 2001  interview. “And working your way through that approval process is certainly part  of the risk.”

But all that history appears forgotten amid a resurgent real estate market,  the unquenchable thirst among medical providers for more space and a city  administration willing to open its pocketbook for the private sector.

Last week, Gorman & Company inked a deal with the city to rescue the  long-stalled Union Corners site at the corner of East Washington Avenue and  Milwaukee Street. Anchoring the proposed $84 million project is a  60,000-square-foot UW Health clinic.

Back in 2003, before the housing bust sent the national and local economies  into a tailspin, developer Todd McGrath had plans to turn the 11-acre Union  Corners site into a mix of high-density housing, shopping and open space. The  $70 million project was widely hailed as a game-changer, something that would  finally spur development up and down the blighted East Washington Avenue  corridor.

When the recession hit, however, all those dreams were drowned in a river of  debt, and McGrath ended up losing the property in a voluntary foreclosure. The  city of Madison eventually stepped in, buying the land from M&I Bank for  $3.57 million, with the expectation it could eventually find a private developer  to take over the site once the economy improved.

Enter Gary Gorman, who is back working with the city on the Union Corners  site. His proposal was selected by an ad-hoc special committee in November after  competing developers dropped out.

Gorman says there was nothing special about his decision to jump back into  the local development game. He was approached by UW Health officials about  building a new clinic at Union Corners and decided to take a look.

“That is what really sparked it,” he says. “An opportunity presented  itself.”

UW Health officials are ready to get moving. The provider was looking to  replace its aging East Towne Clinic and also has a track record in working with  Gorman, who bought the Quisling Clinic from UW Health 15 years ago.

“We were very impressed with the way he worked with the community and  neighbors in the area as well as coordinating with the city staff and  departments,” says UW Health spokeswoman Lisa Brunette.

Not everyone sees it exactly that way.

Former Madison Mayor Dave Cieslewicz, who was involved in  the failed TIF negotiations with Gorman on 800 East Washington back in 2006,  notes Gorman’s past support for current Mayor Paul Soglin. Gorman had backed  Soglin in his 2003 upset loss to Cieslewicz and again in 2011 when Soglin turned  the tables on Mayor Dave.

“I liked Gorman’s proposal for East Wash, but he was asking for an exotic  financing mechanism that drew the strong objections of city staff and was  rejected by the Board of Estimates,” says Cieslewicz. “It’s ironic that he’s now  reviving Union Corners.”

Campaign finance records show Gorman contributed $250 to Soglin in his run  against incumbent Mayor Cieslewicz in 2011. But Gorman maintains the change in  the mayor’s office had no bearing on his decision to tackle Union Corners.

“There was nothing political about it at all,” he says.

And it’s not like Gorman, a 1973 graduate of Monona Grove High School, has  been sitting on the sidelines stewing over deals gone bad. On the contrary, his  firm has been busy working in a variety of markets outside Wisconsin, even  tackling an affordable housing project in Gulfport, Miss., in the wake of  Hurricane Katrina.

In fact, Gorman & Company has carved out a national reputation for  downtown revitalization and historic renovations using tax credits and other  creative financing vehicles. Rather than having to look for business, the firm  has found itself sought out by cities looking for developers willing to work in  old factory districts or troubled inner-city neighborhoods.

“Frankly, we haven’t done much work in Madison since Avenue 800 because so  many other communities want us working there,” says Tom Capp, chief operating  officer at Gorman & Company.

In Phoenix, the firm has been pursuing transit-oriented developments designed  to incorporate housing, offices and commercial space around that city’s new  light rail system. It has also built affordable housing designed to bring more  residents into the downtown.

In Miami, the firm has worked with world-renowned architect and planner Andres Duany to develop “workforce housing” for employees in  the Florida Keys tourism industry who otherwise couldn’t afford to live near  their jobs.

“Our wheelhouse is really about community building,” says Capp, a former  mayor of Fitchburg who has spent the past three years living in Miami overseeing  those efforts.

Closer to home, Gorman & Company has made a big name for itself in  Milwaukee. The firm has tackled some 30 housing projects in Wisconsin’s largest  city over the past decade, including two redevelopments at the former Pabst Brewery just north of downtown.

The company has twice been lauded by the Business Journal of Greater  Milwaukee for residential development of the year: in 2006 for the Historic  Lofts on Kilbourn Avenue and a year later for the Park East Enterprise units on  Vliet Street.

Count Milwaukee Mayor Tom Barrett as a big fan. He still remembers Gorman  from the late 1970s when both were long-haired students at the UW-Madison Law  School thinking of ways they could change the world.

“Yes, Gary has been an opportunist but these are opportunities nobody else is  taking advantage of,” says Barrett. “Maybe the best thing I can say is he hasn’t  been afraid to invest in places other people wouldn’t touch.”

A father of five, Gorman has long shown an affinity for  crafting complex financial arrangements. His first job after graduating from law  school in 1980 was representing developers and syndicators who were raising  capital from investors.

But Gorman soon found himself more interested in doing his own deals than  negotiating on behalf of others. In 1984, he founded Gorman & Company and  two years later began taking advantage of the new federal Section 42 tax credits  that helped provide low-cost financing for projects with an affordable housing  component.

Under the program that still exists today, a developer secures the credits  and offers them to investors in exchange for cash that can be used to lower  borrowing costs. Investors can then use the credits to offset their tax  liabilities on other income.

Gorman also saw Section 42 as a good business approach since competitors  either didn’t understand the process or didn’t want to jump through a lot of  hoops. One of Gorman’s first major projects — some 200 apartments built in  several phases near Elver Park — was financed with Section 42 tax credits.

Today, Gorman & Company employs 235 people nationwide with a development  portfolio topping $560 million. The firm owns and manages nearly 4,000 housing  units and manages another 1,100 for other owners, with satellite offices in  Phoenix, Miami, Chicago and Milwaukee.

But Gorman has never been one to flash the cash. For years his company  operated out of a small office on South Park Street next to Copp’s grocery. Only  later did he move the headquarters to a restored schoolhouse in Oregon.

Given all that success, Gorman could be throttling back and  spending more time with his family, but says he is looking forward to watching  Union Corners unfold.

“I know there is some history there, but it’s still a great site,” he says. “We’re also getting a lot of interest from businesses who want to locate there  and that is very encouraging.”

Although it’s been a while since Gorman has worked with the city, his  reputation for being a tough negotiator hasn’t changed. It took nearly six  months of discussions before the city and Gorman finally reached a deal on the  Union Corners property.

Under the plan approved by the Madison City Council July 16, the city will  sell the property to Gorman for $1 in lieu of making a TIF loan to the  developer. The city then hopes to recoup its estimated $6 million in land and  infrastructure costs through new property taxes generated by the  development.

Plans call for development in four phases: The first is 60,000 square feet of  medical clinic space with parking at the corner of East Washington Avenue and  Milwaukee Street, followed by 50 to 100 residential units. Phase 3 calls for  retail, a public library and office space. More retail, a restaurant or  additional housing are eyed for phase 4.

The deal includes exceptions to current city TIF policy, including allowing a  corporate rather than personal guarantee for repayment and no requirement that  the city take a share of the profits if the project is sold before the city  recoups from the developer the $6 million it has already invested in the  site.

Former east side Ald. Brenda Konkel, who went to bat for Gorman on his 800  East Washington proposal during her days on the council, says she always  respected him as both a quality developer and tough negotiator. But she worries  that Gorman’s arrangement with the city signals a worrisome trend.

“This is a really good example of how lax our TIF policy has gotten,” she  says. “The last time (with Gorman) the personal guarantee was a deal breaker but  this time no one even batted an eye. The candy store is wide open.”

Still, city officials say they are comfortable with the plan since it also  includes a caveat that the city could reclaim any undeveloped property back for  $1 after five years if Gorman does not develop the entire parcel.

“It’s an unusual case,” admits city economic development director Aaron  Olver.

Soglin says he is confident that Gorman can pull everything together and  doesn’t anticipate any future setbacks.

“I don’t think Gary would have invested this much time into it if he didn’t  intend to take it all the way through,” Soglin says.

Watching with mixed emotions as the plan unfolds is Lance McGrath, who has  taken over management of McGrath Associates following the illness of his  brother, Todd. The family firm took a body blow with the Union Corners meltdown  but has gotten back into the development game of late with several smaller  apartment projects.

“We have moved on but wish Gary nothing but the best,” says Lance  McGrath.

Meanwhile, plans are now moving forward on the same site where Gorman’s  earlier plans fell through.

In June, following a quick negotiation, Gebhardt Development and Metcalfe’s  Market reached a tentative deal to purchase land from the city for a $65  million, 10-story mixed-use project. That deal calls for the city to sell a  4.5-acre site on the north side of the 800 block of East Washington Avenue for  $3.15 million.

Plans there call for a 50,000-square-foot Metcalfe’s grocery with a rooftop  garden, along with up to 240 residential units, including 45 low-income units. A  second phase calls for 22 condominiums, 65,000 square feet of commercial space  and more parking.

The project has generated a lot of support from the adjoining neighborhood  and city officials anxious to move vacant property onto the tax rolls.

But here’s the kicker: The new developers are looking for $7.9 million in TIF  to make it happen. That’s $100,000 more than Gorman had sought seven years ago,  but Gorman’s “Avenue 800″ was valued $20 million higher.

Gorman a leader in using visa program to attract Chinese investors

Gorman & Company has long been known for using government tax credits to  finance real estate developments with an affordable housing or historic  preservation component.

And now the Oregon-based firm is tapping foreign investors hungry for green  cards.

Using an arcane government program that offers visas to foreigners who invest  money in targeted areas in this country, Gorman in 2011 secured $11 million from  Chinese investors for the 90-room “Brewhouse” extended-stay hotel at the Pabst  brewery site.

Run through the U.S. Immigration Service, the EB-5 visa program provides two  years of residency to foreign nationals and their families who invest a minimum  of $500,000 in cities with high unemployment or “Targeted Employment Areas.” The  investment must help to create or preserve at least 10 jobs for U.S.  workers.

To arrange financing for the Pabst project, Gary Gorman made four trips to  China over six months to work out the details. He is now so bullish on the  program his company has applied, and was recently certified by the federal  government, to be one of some 330 regional centers nationally — six in Wisconsin — to handle investor visas, allowing Gorman to collect a fee for the effort.

“It’s a complicated process but more people are starting to use it,” says  Gorman.

The EB-5 visa program has been around since the Immigration Act of 1990. A  2005 audit, however, found the program was not getting as much use as Congress  had anticipated. So in early 2011, the Immigration Service streamlined the  application process to attract more participants.

By the end of 2011, more than 3,800 EB-5 applications had been filed compared  to fewer than 800 applications in 2007, according to the Government  Accountability Office.

But don’t expect Gorman to tap Chinese or any other foreign investor for the  Union Corners project.

“It’s more likely we’ll raise our money for that one,” says Gorman, noting  that Madison’s unemployment rate is also too low to allow investors to take  advantage of the $500,000 limit.

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