The developer of a three-story medical office building under construction in Wauwatosa is seeking financing help through an unusual city bond issue.
The city Redevelopment Authority this week granted preliminary approval to an $18 million conduit bond sale for the 60,000-square-foot building, at 2999 N. Mayfair Road.
The bond issue is not a city loan to building developer Mayfair Medical Properties LLC, said Nancy Welch, Wauwtosa's director of community development.
Mayfair Medical would be responsible for repaying the debt. However, the city's role as a conduit means the bonds would be tax-exempt, allowing Mayfair Medical to pay a lower interest rate to investors who buy the bonds.
The bond sale will require final approval from the Redevelopment Authority board after a public hearing, Welch said. That hearing has not yet been scheduled. It marks the first such bond issue by Wauwatosa since 1998, she said. However, Milwaukee and other cities are routinely involved in such bond sales.
The bond sale was requested by Mayfair Medical, which Welch said is affiliated with VJS Development Group LLC. The building was initially developed for Mayfair Radiology, but work stopped in the spring of 2008 after that medical group was bought by Aurora Health Care Inc.
Mayfair Radiology in January 2009 moved into an Aurora facility at 10400 W. North Ave., as the health care system studied its space needs.
Construction work resumed this winter after Aurora decided to put an outpatient surgey center in the building, along with support services and doctors' offices. The project should be completed by the first half of 2011.
Ald. Robert Dennik is vice president of business development at VJS Construction Services Inc., which is affiliated with VJS Development. Dennik but has not discussed the bond issue with Welch, she said. Dennik is not on the Redevelopment Authority board, and Welch said the bond issue probably will not need Common Council approval, where Dennik has been a member since March 2009.
Dennik told me he's not running for re-election, and will be leave the council in April, when his term ends.
The Common Council had earlier agreed to help finance the building's parking structure. That agreement, approved before Dennik became an alderman, allows VJS Development to recover up to $1.8 million in property taxes in connection with the project.