Wisconsin

Historic Wisconsin Brewery Becomes Workforce Housing

The Gunderson Lutheran Medical Center here had a difficult time attracting and retaining employees due to the lack of quality affordable housing in its area.

So the medical center sought to convert a 111-year-old building on its campus to rental lofts and turned to Gorman & Co., a 24-year-old tax credit development firm, for help.

The historic building, a former bottling plant for Gund Beer, is also close to other large employers, such as the University of Wisconsin and Viterbo University.

“The development was a priority for the city because of the location, a highly visible spot near downtown,” said Tom Capp, chief operating office of the Madison, Wis.-based Gorman. “And it was a priority for the medical center because they’re competing for employees with other regional medical centers, including the Mayo Clinic.”

The Historic Gund Brewery Lofts includes 86 mixed-income rental lofts: 41 units in the rehabbed building, and another 45 lofts in an attached, newly construction three-story structure.

While the lofts are open to anyone, Gunderson Lutheran employees make up the bulk of residents and now enjoy a walk-to-work commute. That’s no surprise, given that Gunderson Lutheran uses the development as part of its recruitment and marketing efforts. And the development mixes incomes to great effect. “We have maintenance workers living in the same development as the assistant director of surgery,” said Capp.

The building opened in 1897 and served as a bottling plant for the John Gund Brewing Co. until it shut down on the eve of Prohibition. The building was eventually bought by the Sara Lee Corp. and used as a warehouse until it donated the building and surrounding five acres to the medical center in 2003.

Gorman figured that receiving historic tax credits would be easy, based on the city’s history as a brewery town. But the initial application was denied because the building was a bottling plant, not a brewery. So the company hired a historic consultant who found that innovation in the bottle washing and sterilization techniques were first introduced at the building. A second application was then approved.

Gorman received more than $7.7 million in equity from the sale of low-income housing tax credits and netted another $1.5 million in historic tax credits, both syndicated by Alliant Capital. The project was also financed with a first mortgage of more than $3 million provided by the Wisconsin Housing and Economic Development Authority.

In the original, building, Gorman converted a large loading dock into a patio for residents. The project includes a solar hot-water system, for which Gorman received a $48,000 grant from Focus on Energy, a consortium of local utility providers.

“The advantage of having the new addition was the historic tax credit restrictions didn’t apply,” said Chris Laurent, Gorman’s Wisconsin Market President. “So, the solar hot-water collectors, for example, are around the new edition.”

Gorman replaced a parking lot with green space and a tot lot. The company also dedicated a portion of that green space to the extension of a hiking and biking trail that connects with the nearby Mississippi River.