After a yearlong stall, construction is under way on an $84 million senior housing project in Milwaukee being coordinated by a Madison-based consulting firm.

But it sure wasn’t easy.

Securing financing was the main hurdle for the project, which hit a brick wall in October 2008. That’s when the usual lending markets for senior housing construction — and most any other kind of building — froze up, said Craig Witz, principal and lead consultant for Madison’s Witz Co.

“I’ve never experienced that before and hopefully never will again,” said Witz, who has more than 20 years’ experience coordinating senior housing developments nationwide.

The project, back on track since last month, is a 21-story, glass-and-concrete lakefront tower with 88 market-rate, independent-living apartments and a first-floor wellness area and cafe. It will be run by Saint John’s Communities, a nonprofit group active since 1979 in senior housing, and it’s being built adjacent to the nonprofit’s existing Saint John’s On The Lake senior housing campus — a 10-story building with 185 apartments featuring independent living, assisted living and skilled nursing care options, on Prospect Avenue just north of downtown Milwaukee.

Plans for the new tower were well along last October — with most of the apartments reserved and the project’s construction documents and bids in place — when project developers went to the bond market and found it dry. More than 50 potential bank investors in the U.S. and Europe balked at funding the project, Witz said.

“Any development deal poses challenges, but I’ve never had a situation where basically the whole thing comes to a screeching halt, and with 70 percent of the units reserved,” Witz said this week. “I’ve never had a deal that has basically been put in limbo at that point.”

Senior housing typically has been financed with more affordable variable-rate bonds, but last October that just wasn’t happening, Witz added.

“It was both a frustrating and fascinating process, seeing banks that had been players in the senior living market for years, and a number of them just simply evaporated,” Witz said. “In normal times, this would have been a very easy deal to finance.”

Witz and other project leaders got the project back on track last month, securing financing with fixed-rate, tax-exempt revenue bonds on Oct. 14. At the time, it was the largest fixed-rate senior living bond transaction in the country, Witz noted. The bonds were underwritten and sold by Ziegler Capital Markets of Milwaukee and issued by the Wisconsin Health & Educational Facilities Authority.

But because fixed-rate bonds come with a higher interest rate, a number of changes had to be made to the development plan to save money while not compromising quality or losing potential tenants. “We had to keep our buyers on board and rebid the project while we recalibrated the deal,” Witz said.

Construction finally started Oct. 19, with completion set for summer 2011.

“We are working fast and furiously,” Witz said. “It was a tremendously difficult financing process and we were just glad to be able to finally close. It’s nice to be under construction.”

Witz described his own role as a consultant to developers as a process of systematically working through and monitoring the design, marketing, financials and construction of projects, from concept through completion.

“Basically I’m there to make sure they do the right things at the right times,” Witz said.

Working mostly with nonprofits, recent past projects by the Witz Company include a nursing home in Michigan in 2008; two large, independent-living expansion projects in North Carolina in 2007; and a continuing care retirement community in Phoenix in 2006.

Witz is a Madison native who worked out of state for several years for national development organizations before returning to Madison to start his own company nine years ago.

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