Wauwatosa may finance Mayfair hotel development with $9 million

Editor's note: The article was changed on Jan. 31 to remove an inaccurate statement. The city is funding $9 million in today's dollars, but that would increase to almost $14 million at the end of the loan in 2035 dollars.

Plans for an office tower near Mayfair mall to be converted into a four-star hotel could receive around $14 million in funding from Wauwatosa.

Mayfair Hotel LLC would convert and expand an 11-story, 150,000-square-foot office building, near the northeast corner of N. Mayfair Road and W. North Ave., into a 12-floor, 196-room hotel. 

Wauwatosa would help finance the hotel with $13.8 million, according to Community Development Authority documents. 

The money would be provided through a tax-incremental-financing district, which needs Common Council approval.

That TIF would assure private development within the district is consistent with the city’s development and redevelopment objectives, according to authority documents. 

In a TIF District, the city agrees to designated public improvements in an blighted area to encourage development or growth.When that development occurs, the increase or increment, in taxes on the district's tax base no longer goes directly to the city, school, county and other taxing entities. Instead it is used to pay off the debt for designated public improvements in that district. Once that debt is retired and the district is closed, as long as 27 years later, the tax entities resume collection of any added taxes generated by the development.

The city projects that additional land and improvements worth approximately $53 million would be created as a result of new development, redevelopment, and appreciation in the value of existing properties.

That would be accomplished through the hotel financing, as well as $5.8 million in public improvements.

Among the biggest public improvement are proposed bike/pedestrian connections, estimated at $2.5 million, according to authority documents. Other proposed projects include rebuilding part of West North Avenue 

The proposal, which originally surfaced this fall, would create an upscale hotel featuring a restaurant, a 4,500-square-foot ballroom and a 2,200-square-foot rooftop event space with an outdoor terrace.

The possible hotel brand isn't yet being publicly identified. It would target business travelers who want to be in Wauwatosa, but are staying in nearby communities, such as as Menomonee Falls, Brookfield and Waukesha.

The hotel's estimated property tax value would be more than $27 million, according to the term sheet.

Based on the Economic Feasibility Study. the district would be expected to generate sufficient tax increments to recover all project costs by the year 2040, seven years earlier than the 27 year maximum life of this district.

Journal Sentinel reporter Tom Daykin contributed to this article.