Kettle Ridge Case Study
Whitewater, Wisconsin • Walworth County
About the Project
Kettle Ridge (formerly known as University Gardens) was built in 1972 as subsidized Section 8 Project-Based Rental Assistance housing in the City of Whitewater in southcentral Wisconsin. The 108-unit, two story property features 44 one-bedroom and 64 two-bedroom apartments. Kettle Ridge is situated on about seven acres near the University of Wisconsin–Whitewater and the Southern Kettle Moraine State Forest.
WHPC acquired the property in 2007 to preserve its affordable housing status. By 2023, Kettle Ridge was showing its age and required significant improvements to the building. Due to its similar name and proximity to the university, the former University Gardens was sometimes mistaken for student housing. WHPC initiated a rebranding process to better reflect the building’s revitalization and geographic location in the Kettle Moraine. In 2023, University Gardens was officially rechristened Kettle Ridge.
The Challenge
After years of deferred maintenance, the 50-year-old structure required a significant renovation inside and out. Every apartment needed to be rehabbed, creating a logistical challenge of performing construction work while residents remained on the property.
In addition, rising construction costs and operating expenses, paired with volatile interest rates since the COVID-19 pandemic, required innovative financial strategies and public-private partnerships to fund and maintain the Kettle Ridge renovation.
To accommodate residents who had to move during renovation, WHPC needed to convert six vacant apartments into temporary housing, providing furniture, kitchenware, and bedroom and bathroom linens. A relocation specialist was engaged to help residents move their belongings to a storage pod and back into place when construction was completed.
Our Solution
WHPC applied for Low-Income Housing Tax Credits (LIHTCs) through the Wisconsin Housing and Economic Development Authority (WHEDA). WHEDA awarded WHPC competitive 9% LIHTCs in 2022 in the amount of $8,653,686 over 10 years.
Because the property is in a Qualified Census Tract, WHEDA also provided a 15% boost to the amount of eligible basis used to calculate the tax credits awarded.
A Section 8 Housing Assistance Payment (HAP) contract was in place for 101 of the 108 apartments. The U.S. Department of Housing and Urban Development approved two items required for the LIHTC transaction: 1) the assignment and assumption of the HAP contract by WHPC and 2) the amendment of the Low-Income Housing Preservation and Resident Homeownership Agreement. WHPC renewed the Section 8 HAP contract for 20 years to 2043, preserving another two decades of affordability at Kettle Ridge.
WHPC worked with a team of national and local financial partners to fund the balance of the construction costs. WHPC selected National Equity Fund (NEF) to purchase the tax credits. NEF currently has 99.99% ownership in the transaction with WHPC assuming the remaining 0.01% as a managing partner. At the end of the 15-year tax credit compliance period, WHPC will have a right of first refusal to purchase the property for a price of all outstanding debt and taxes.
WHPC also leveraged a Capital Magnet Fund loan and Federal Home Loan Bank of Chicago Affordable Housing Program grant to complete the rehab financing.
PROJECT TYPE
Family Housing
LOCATION
Whitewater, Wisconsin
COMPLETION DATE
Spring 2024
SITE SIZE
Seven Acres
BUILDING SIZE
108 Apartments (101 affordable and seven market-rate)
With $7 million in improvements, WHPC and our partners transformed Kettle Ridge from a 50-year-old property with dated interiors, inefficient mechanicals, and no shared amenities into a Green Built Home-certified property with refreshed interiors, outdoor gathering areas, and a rejuvenated sense of community.
WHPC RESPONSIBILITIES
Acquisition, Asset Management, Financial Management
FINANCIAL PARTNERS
National Equity Fund
First Business Bank
Capital Magnet Funds
Federal Home Loan Bank of Chicago
ARCHITECT
Dimension IV
CONSTRUCTION MANAGEMENT
Friede & Associates
The Outcome
WHPC approached the renovation through a lens of resident health and infrastructure sustainability. The rehab scope included new roofs, windows, energy-efficient mechanicals, kitchen cabinets, appliances, flooring, lighting, and painting, among other things. Outdoor gathering spaces were revitalized and a playground, bike racks, and a photovoltaic system were installed.
Three apartments were converted into Type-A Accessible for people with disabilities, including structural work to widen doorways and halls to make the apartments easier to navigate in a wheelchair. Parking lots were downsized by 40 spaces to allow for more green space. The project is designated as Wisconsin Green Built Home certified.
By renovating the entire Kettle Ridge property, WHPC rehabilitated an aging 108-unit building into a healthy, sustainable, and accessible living environment for families, and has repositioned the property for success in the coming decades.
