The Wisconsin Health and Educational Facilities Authority will issue $75.985 million of tax-exempt bonds for a nonprofit developer to convert two Milwaukee apartment buildings to affordable housing, after an earlier plan was rejected by Milwaukee's city council.
The original plan had been to issue revenue bonds through
The city council vetoed that plan in May, with all but one alderman opposing it at a hearing required under federal tax law.
Wisconsin law "separately requires Common Council approval before the PFA can issue bonds for any project located in Milwaukee," according to
A spokesperson for the developer, the Beverly Hills, California-based
The exact closing date of that transaction and the bond issuance date are "to be determined," said the spokesperson, who declined to be named.
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WHEFA was not "made aware of any actions undertaken by the city of Milwaukee before WHEFA was contacted to be the proposed issuer of tax-exempt bonds," Executive Director Larry Wiemer II said by email.
WHEFA held a public hearing on June 25, Wiemer said. "No one provided any oral testimony, and no written testimony was received," he said.
The federal law requires public notice of a hearing at least
The conduit issuer is required "to ensure all of WHEFA's statutory requirements for the issuance of such bonds are met," Wiemer said. But its authority is limited to bond issuance for projects deemed eligible under the agency's relatively broad mandate.
"Any time you're doing tax-exempt bonds that fall into one of the categories of private activity bonds, like these do, you have to do a TEFRA hearing" as required under federal law, said bond counsel Ray Jones of Parker Poe Adams & Bernstein LLP.
There are two types of TEFRA hearing: a host hearing and an issuer hearing. Depending on which state you're issuing in, "if you work with a statewide issuer like WHEFA, you can hold a single public hearing that serves as both the host and issuer TEFRA," Jones said.
A jurisdiction like the state of Wisconsin qualifies, and WHEFA as a state agency counts as a statewide issuer. So on June 25, "WHEFA was able to hold a TEFRA hearing under the federal rules that satisfied both requirements," he said.
Bedford was formed in 2025, and provides affordable housing for low- to very low-income residents, according to
The spokesperson said that Bedford registered two new LLCs, Bedford Arbor Ridge LLC and Bedford St. James LLC, on July 30 because "the lender requires that title to these communities be taken via a special purpose vehicle (LLC) that is 100% owned by the nonprofit."
Alderman Alex Brower said the plan presented to the city council in May called for the buildings to be converted to affordable housing and for some of the units to be remodeled. He said it was his understanding that the conversions would happen through tenant attrition.
"As leases expire, they were going to non-renew leases and upgrade some units that needed it, and then rent those at an affordable rate," he said.
Asked whether there was any possible scenario under which current tenants could be pushed out of their apartments, the Bedford spokesperson said, "It is our policy not to displace residents from our communities" except in the case of "standard material lease violations."
Brower, the lone vote in favor of the original plan, said Milwaukee desperately needs more affordable housing "given the fact that we have so many people who are on the cusp of homelessness in this economy and across this city.
"There's a shortage of all kinds of housing," he said. "Maybe the only level of housing that there's not a shortage of is for the richest 1% or the highest income earners. I do have a property in my district that's, I believe, on the market for $4.1 million, that's been on the market for at least a couple years."
But in his conversations with developers, Brower said he's heard the affordable housing most needs tax-exempt financing to incentivize development. When developers "can charge exorbitant prices, they can recoup their money as soon as possible," he said. "If we want something to be not fully market rate or not luxury, we have to give them a handout… This is just where the market is right now under capitalism."
For the Bedford project, there was some discussion among council members about whether there is already too much affordable housing in that particular district, Brower said. Some aldermen worried that "sometimes concentrated poverty can create a host of issues, which I'm not insensitive to that concern," he said.
But "my constituents and I stand for more affordable housing by almost any means necessary," Brower added. "Whether it's through this kind of program, or through anything we do with the developers, or our own city's housing authority. I do want the city's housing authority to be constructing more buildings, as well."
Alderwoman Larresa Taylor, whose district hosts the targeted apartment buildings, and Alderman Robert Bauman, who also voted against the plan, did not respond to phone calls and emails seeking comment.
At the May 12
She added, "With the number of units that we have proposed, it is not necessary to have these two developments… change into affordable housing units at this time."
"They never came to Milwaukee. They appeared virtually. They never met with the local alderperson," Bauman said at that meeting. "We have seen these out of state schemes before, where there's a nonprofit front, but behind that front is a corporately owned and operated real estate investment enterprise. And we have no idea what their track record has been."
He argued many corporate landlords have "a woeful record" of failing to attend to key details of building maintenance in Milwaukee.
He added that Bedford chose to go to the city council for input to get "some savings on the investment side," and "there's nothing to stop them" from pursuing other avenues of financing, "and providing affordable housing, if that's truly their goal."
Jones pointed out that the apartments are already owned by an out-of-state owner, and argued Bedford would be more, not less, attentive to tenant needs.
"Apartments are bought and sold every day... and there are many different definitions of affordability," he said, noting that "almost 90% of the tenants (in those apartments) already qualify under what a nonprofit has to do from an income standpoint," and 25% of the apartments in the complex can be market rate.
The Bedford spokesperson said, "We have addressed city concerns as they have been presented to us, especially as it pertains to potential tenant displacement."
