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Avalon development has city, residents optimistic about Allied revitalization

By Samara Kalk Derby
The Capital Times, March 26, 2007

Cheryl Lewis feels right at home in her three-bedroom Avalon Madison Village loft apartment.

It’s roomy, with a washer and dryer and two full bathrooms.

“The neighborhood is nice. There are lots of kids, and it’s quiet over here, too,” said Lewis, a Madison Area Technical College accounting student and single mom whose three kids ages 3, 5 and 9 often watch movies in the complex’s mini-movie theater while she does her schoolwork in the building’s computer lab.

This happy picture is a snapshot from the low-income Allied Drive neighborhood, which tends to generate a lot of bad news. For the past decade, it has been a major focus of attention for city officials and police as well as civic organizations.

But the story of Avalon Madison Village is a good one, say those who have a stake in the project, although others maintain that it doesn’t do enough for the poor people already living in the neighborhood.

Lewis moved into the development in September from a duplex in the Foxwood Trail-Moorland Road area.

The $14.7 million project in the Allied Drive neighborhood on the long vacant site of the SuperSaver grocery off Verona Road has all kinds of amenities, including a kids’ splash area and a fitness room, which Lewis has yet to use.

“I need to, but I haven’t,” she said with a laugh.

Lewis works part-time in MATC’s day care center and, like many in the development, gets rental assistance through the Section 8 housing program. She shied away from disclosing her full monthly rent in a newspaper article, but noted that what she pays for rent will go up as her income does.

Seventy percent of the units in Avalon Madison Village are affordable to people who make 60 percent or less of Dane County’s median income, which amounts to about $44,000 for a family of four. The remaining 30 percent of the apartments are rented at market rate.

The development’s 104 units are 95 percent rented, which is considered full occupancy. That stands in stark contrast to other Allied Drive apartment buildings, whose high vacancy rates led city planning department director Mark Olinger to say earlier this year that Allied Drive will be abandoned in two years if left to its own devices.

About the Avalon project, developer Gary Gorman said: “It was successful in revitalizing that area, bringing people back to that area, and sending a signal that revitalization projects can be successful in that area.”

Gorman is president of Gorman & Co., one of the largest providers of housing in low-income neighborhoods in Wisconsin for the past few years.

“There is a focus on the negative and I think that our project and the $14 million that were invested there is extremely positive,” Gorman said. “I hope it encourages other people to invest in that area.”

Mayor Dave Cieslewicz has made investments in the Allied area, too, including leading the city to spend $4.35 million at a foreclosure sale in May to buy nine rundown apartment buildings on Allied Drive formerly owned by Troy Hauk.Cieslewicz also helped Gorman get financing for Avalon Village.

The city bought the 6.7-acre site in December 2004 for $3.5 million, using $1.5 million in tax incremental financing money and borrowing the other $2 million, which will be repaid with TIF. The City Council approved the project in February 2005 and sold the site to Gorman for $1.56 million.

“Avalon Village is an example of a real partnership between the city, the developer and the neighborhood,” Cieslewicz said. “This is the gateway to Allied Drive, and we have replaced an abandoned shopping mall with quality, affordable housing.”

Does it go far enough? The project was controversial in its planning stages two years ago. Some Allied Drive residents protested the development, saying it would begin the process of pricing them out of their neighborhood.

Alice Howard, president of the Allied Drive Neighborhood Association, was one of the most vocal critics, and she hasn’t softened much since the complex opened last July.

She acknowledged that some residents from Allied Drive have moved into the development, but she said most of the units are still out of the price range for many in the community, particularly the elderly.

“It is a start but for everyone who needs an apartment it is not for everyone, no. There are still people who cannot even get in there,” she said.

One-bedroom apartments start at $815 a month, two bedrooms at $980, and three bedrooms at $1,140. The affordable rent program, which lowers prices based on a renter’s income, brings rents down by hundreds of dollars a month.

Besides city assistance, the project got $7.4 million in Section 42 tax credits over 10 years from the Wisconsin Housing and Economic Development Authority (WHEDA). It also got grants from Madison Gas & Electric and Focus on Energy to help ensure the project was energy-efficient.

Howard said only six of the units are rented at 30 percent of the Dane County median income, adding that Allied Drive residents need apartments priced at 10 or 15 percent of the median income.

WHEDA supplies money for affordable housing but “affordable” doesn’t meet the needs of low-income people, Howard said.

“Anyone with a minimum-wage job or a job paying about $10 an hour cannot afford those apartments,” she said, adding that the crucial Section 8 vouchers are hard to come by.

Ald. Brenda Konkel, who sits on the city’s Plan Commission, voted against the Avalon Village proposal twice.

She objected to the amount of tax incremental financing involved in the deal and is still critical of the way the TIF was arranged. Still, Konkel says now that Avalon Village was a good investment.

“I’ve never seen a developer in town get to affordability levels at that rate. It’s not enough for Allied Drive but it’s an incredible project, let’s put it that way.”

Allied Drive needs more than just Avalon Village, but it’s a first step, she said. “I would have preferred it to be more central to Allied Drive but I was so impressed that Gorman & Co. was able to get to the income levels they got to and really make a serious, serious effort to make housing affordable.”

Major amenities: Gorman calls it a $14 million gamble.

“We were confident that the product quality would cause it to succeed. By utilizing the Section 42 tax credits, we can provide really high-quality housing at below-market rents. That works pretty well and it worked in this instance.”

The biggest risk for Gorman was in the market-rate component, he said. He worried that people paying full price might be concerned about the area.

“But I think what really happened was the features of the apartments and the amenities outweighed any concerns that people might have had about the neighborhood. And it worked.”

To Gorman, the biggest advantage of the apartment complex is that each unit has a private entrance. There are no common hallways. Residents on the second floor have their own private stairways built into their units.

Chris Laurent, president of the Wisconsin market at Gorman & Co., said Avalon Village offers a housing choice that people in the Allied Drive neighborhood haven’t had before.

“We’ve had success with that building type before. We have individual entrances, we have a high amenity package,” he said. “Actually, geographically the location is pretty strong for access to the downtown, with shopping nearby.”

Jessica Martin, 19, who does secretarial work for the University of Wisconsin physical plant, moved in to her one-bedroom unit last July.

“I love it here. The management is awesome. They adapt to your needs,” she said. “The community is really friendly around here.”

Martin enjoys the fact that her apartment is brand new. She noted the underground parking and the washer and dryer in her unit.

She qualifies for low-income housing and pays $526 a month. It is her first place since leaving her parents’ home near Muir Field Road. She considers it a lot of space for the money.

Martin said she was worried about the neighborhood before she moved in. Her boyfriend knew someone who was renting a unit and suggested she take a look. When he told her that the apartment was right by Allied Drive, she hesitated.

“But I changed my mind as soon as I walked in,” she said. “Nothing falls over from Allied. We don’t really have any problems over here. It’s really comfortable here.”