A plan to build affordable apartments at a former Milwaukee central city hotel development site has secured a big part of its financing package.
Known as Sears Market Square, it would create 46 apartments on a large vacant lot next to a historic former Sears store, 2100 W. North Ave.
The Wisconsin Housing and Economic Development Authority on June 3 announced Sears Market Square is among 35 apartment projects statewide that are receiving federal and state affordable housing tax credits.
Developers that receive affordable housing tax credits must generally provide at least 85% of a building’s apartments at below-market rents to people earning no higher than 60% of the local median income for 30 years.
The tax credits are sold to raise cash, with the developers then obtaining bank loans and other cash sources to complete their financing packages.
Sears Market Square is being developed by Haywood Group LLC and Thirty Six Blocks Inc.
An affiliate of Haywood Group, led by Kalan Haywood Sr., in 2019 received a $3.85 million city loan to help convert the former Sears into the boutique Ikon Hotel and conference center.
That development failed to proceed. Haywood and his partners in 2023 instead began pursuing plans for a mix of uses at the 7-acre site, including a brewery, art gallery, offices, and market rate apartments.
In 2025, a third plan emerged to develop affordable apartments as the project’s first phase. That happened even as Haywood’s group, HG Sears LLC, is overdue on repaying the city loan.
A later development phase would involve a mix of residential and commercial uses at the building, according to the Department of City Development.
The department will work with Haywood on obtaining city approval for the apartment development, and “potentially restructuring the existing loan to reflect the current project,” department spokeswoman Madison Goldbeck told the Milwaukee Journal Sentinel.
Haywood couldn’t be immediately reached for comment.
The Common Council voted 12-3 in 2019 to approve the hotel loan. A city comptroller’s report said it carried significant risk, while Mayor Tom Barrett called the hotel an important, catalytic project.
Haywood used the loan to pay the $1.69 million cost of acquiring the property.
Other loan proceeds paid for internal demolition and asbestos removal costs of $1.16 million; $380,000 on architectural fees; $330,000 on property taxes, and $290,000 on utilities, insurance, security and legal costs, according to city records.
Haywood was unable to obtain private financing sources to proceed on the $36.3 million hotel development − which also would have allowed him to tap a second city loan of $5 million.
The pandemic’s effects on the economy, followed by inflated construction costs and higher interest rates, hurt the project, Haywood has said.
(This story was updated to add new information.)
Tom Daykin can be emailed at tdaykin@jrn.com and followed on Instagram,Bluesky, X and Facebook.
This article originally appeared on Milwaukee Journal Sentinel: Apartment plan at central city hotel project site wins financing piece
Reporting by Tom Daykin, Milwaukee Journal Sentinel / Milwaukee Journal Sentinel
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By Tom Daykin, Milwaukee Journal Sentinel | USA TODAY Network
