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The Politics of Real Estate Development – Park East Edition

Apr 22nd, 2009 | By | Category: Eco-Square, Karma, Park East

The tale of the Fair Market Development, LLC Park East development proposal is one already lined with intrigue.  Shortly after proposing the Eco-Square project, they weighed in on the MORE prevailing wage ordinance fight in support of prevailing wages. What wasn’t said was that their proposed development was already subject to a prevailing wage requirement as part of the Park East Redevelopment Compact.  Now, it appears they’re already asking for public money to make the project happen.

With development going so well in the Park East, it was certainly kind of Bob Schultz and Fair Market Development to advocate for more prevailing wage requirements on future projects elsewhere in the city.  It’s not that prevailing wage requirements are killing all Park East development, but they’re not helping.  Additionally, the shtick of developers acting like they’re paying the wages out of their own goodwill in the Park East, as Gatehouse Capital unsuccessfully played with the Palomar project, is getting old.

eco-square2

Careful observers will note the hill is going the wrong way in this rendering (and non-existant in the next), we don't know why that is.

Fair Market Development was the only respondent to a Milwaukee County RFP for a site bordered by North Broadway, North Water Street, North Milwaukee Street, East Lyon Street and East Ogden Avenue.  Their ambitious proposal of 350 apartment units was presumably partially dictated by the lot size (which as covered here before is simply too big), and what appears to be a desire to apply for public financing from the start.

eco-square

If Fair Market Development did intend to apply for public financing from the start, it comes as much less of a shock that they were advocating on the side of labor groups for the MORE ordinance.  The labor groups will definitely be welcome allies when they attempt to apply public pressure on the city for TIF dollars.  A strategy Gatehouse Capital would have certainly loved to play, had they not canceled the project prior to Milwaukee Common Council taking up the issue.

It should be interesting to see how Fair Market manages their push for public dollars.  Gatehouse Capital certainly made their push public.  Will Interim Mayor turned Lobbyist Marvin Pratt, retained by Fair Market Development, make their case as public?  He’s certainly not someone you hire unless you think you’re in for a fight.  How much will the labor groups come to bat for Bob Schultz?  How much are they asking for $1 million or $18 million?

The questions about this project leave some bigger questions to be answered.

How is Park East development going to work on lots this big?

The answer to the question is pretty clear.  Park East development on large lots will only work with big amounts of public money injected into the project.  This is going to be yet another example of a project that will only work with taxpayers helping out.

What are the real effects of prevailing wages?

They’re certainly not helping get projects off the ground.  Every penny in cost they add to a project is going to come straight from the public money in the project.  It’s basic business 101 that increased costs have to be passed on to the customer, and if they won’t pay the government will have to.  And what’s the government in this case?  A roundabout way to get at the wallets of the customer.

The MORE ordinance requires 40% of workers on applicable projects to be residents of the City of Milwaukee.  That’s a positive as it is an incentive for individuals to live in the city.  What are the unions doing in response?  The International Union of Painters and Allied Trades District Council No. 7 is setting up shot on the edge of the metro area in the former Waynz World, and even putting a training facility in.  A lot of good that is going to do students in MPS looking to get jobs in construction.

What can we can expect in the future?

If the lots stay as large as they are (and under Milwaukee County control) in the Park East it appears the only way to get projects off the ground will be to hire lobbyists and ally with local groups in an attempt to apply pressure to elected officials to spend future property tax dollars on Park East projects.

This leaves Milwaukee with 16 acres of land that are going need public financing to be transformed from gravel to buildings.  Using the Palomar’s request for a $18 million TIF for 6 acres as a baseline, it appears there would be an additional cost of $48 million that Milwaukee taxpayers have yet to pay for the Park East redevelopment.  Even worse, using the RSC numbers as a baseline, Richard Curto wanted $9.5 for 2 acres, would put the unrealized public financing cost of the corridor at $76 million.

The Park East lots need to be divided and transferred to city, not the county, management for this to work as a private market development.  Otherwise it’s pretty clear that there isn’t a developer that can pull off a development at requested scale on the Milwaukee County land without taxpayers shelling out more money.  As Department of City Development Commissioner Rocky Marcoux said “However, bigger is not automatically better when the downtown market for hotel, retail, and office does not allow for projects of this size and scale to move forward without significant City subsidy.

The need for public financing in the Park East can be stopped, lot sizes just need to start small and finish big.



Milwaukee Riverkeeper’s Spring River Cleanup

Apr 22nd, 2009 | By | Category: East Side, Hometown Gas Station, Milwaukee River

If you’re going to go out and enjoy a walk along any of Milwaukee’s rivers, now may be the team to do it. This past Saturday approximately 3,000 volunteers, myself included, descended upon Milwaukee’s river beds to clean up everything we could.

This was the second year I had participated in the event, and I elected to work at the North Avenue/Hometown site again this year.  Our group of 49 aimed to clean the east Milwaukee River bank from the former North Avenue Dam to just south of Locust Street. Walking under the bridge for the first time is always a reality check, especially this year, where it appeared seven individuals had made been living there

It will be interesting to observe how the new UWM dorm on the Hometown site will affect the number of homeless individuals living under the bridge next year (and the amount of garbage).  One would assume it would have the affect of reducing the number living there, and also reducing the amount of garbage.  Unfortunately this doesn’t solve the obvious issue, that there are too few beds for the less fortunate in our community.

Other sites, as the Journal Sentinel story indicates, aren’t about cleaning up the land around the river, but cleaning out the actual river itself.  It appears sites along the Menomonee and Kinnickinnic Rivers are hotbeds for shopping carts and other non-natural things to inhabit the rivers.

If you have a chance to next year, participate in the 2009 river cleanup.  It’s a great opportunity to volunteer, as your hard work is immediately visible.



City Plan Commission April 20th, 2009 Meeting Notes

Apr 21st, 2009 | By | Category: City Plan Commission

Although this meeting of the City Plan Commission was light on large scale development projects, there were two items of interest on the agenda.

First up were long over due improvements, or repairs, for the Schlitz Park Riverwalk  This section of the Riverwalk dates to 1988 and is considered “the original district.”  The plan includes adding a low retaining wall of poured in place concrete that will be landscaped with trees and shrubs along 1100 linear feet of the river.  This file was approved and will now go before the Zoning, Neighborhoods & Development Committee.

The other item of interest was the presentation of the Near South Side Area Plan.  The planning team included members from the Department of City Development, the consulting firm HNTB, and a variety of members from the community.  The group explained that this process has gone on for over a year and that over 140 people attend their March 17th, 2009 public meeting.  The plan included a long list of of catalytic projects, and suggestions to develop the area.  It recommended that S. 2nd St become more of a main street, with narrower streets, improved streetscape, and there should be efforts to attract local retail operators.  In the Mitchell St. area the plan included improving pedestrian access to parking in the rear of the buildings, the development of market rate or subsidized housing on the block, and the possible creation of a Mitchell Street Market.   Another project included the creation of the Ceasar Chavez Signature Development which would be a mixed use building with retail on the first floor and subsidized housing above.  The most significant redevelopment plan involved the Reed Street Yards.  The plan suggested reconnecting the site with the surrounding street grid, providing open space and access to the water, encouraged taller building configurations, and suggested that attracting research based business should be explored.  Other suggestions included improved connections to the Menomonee Valley, a new Urban Ecology branch, the creation of a dedicated non-profit organization to develop the 5th and National cultural, arts, and entertainment district, creation of river node parks, and an extension of the Riverwalk system.

This plan wasn’t without opposition.  A couple of residents spoke in opposition explaining they felt there wasn’t enough community involvement.  One resident asked “why fix something that doesn’t need to be fixed?”  He went on to say that “if you approve it, it will cause a lot of racial and economic disparity in the district.”  Despite these concerns the plan was approved and will now go before the Zoning, Neighborhoods & Development Committee.



Revitalize Broadway with Street Improvements

Apr 20th, 2009 | By | Category: East Town, Seattle

BroadwayBroadway is the center of the action in the Third Ward, it works for business, pedestrians, and even automobiles. But just across I-794 it is a wasteland of surface parking lots and empty storefronts. While there are surely numerous factors in place that have hurt the vitality of this street, an area that can be addressed by the city to make it more attractive to business is to improve the pedestrian environment. Specifically the section of Broadway between Wisconsin Ave. and I-794 is vital because by improving these few blocks it would knit together downtown and the Third Ward.

Improving this section of Broadway will not only improve connectivity for pedestrians, but automobiles as well. The first improvement to this block should be to make it a two-way street all the way into the Third Ward. This will immediately bring new traffic on to the street which will help to make it more desirable location for retail business. The second and more infrastructure intensive improvement would be to remove a travel lane to create a center island with street trees. Now this may on the surface seem like a radical change but it really isn’t all that different from what is seen on the other side of I-794. Further, by placing the trees in the center as opposed to in the more common location of the sidewalks, it will create a environment different than other blocks in East Town. This island would narrow the streets and create a visual appearance that encourages drivers to slow down. The reduced speeds and improved appearance would create a safer more enjoyable environment for pedestrians, which again would encourage more retail activity. Finally, as the trees mature they would act as a screen partially blocking out views of I-794, once again enhancing the appeal of the entire area. The combination of reducing lanes, creating the island, and making the street two-ways through to the Third Ward could help spark the redevelopment of this part of downtown Milwaukee.

Of course beyond completing this street additional measures such as a TIF may be required to encourage the redevelopment of surface lots that border Broadway between Michigan St. and I-794, but the street improvements would play a significant role in bringing retail back to Broadway.

To get an idea of what this change could look like, I’ve included a small gallery of photos of the Pioneer Square area of Seattle, WA as well as photos of the current shape of Broadway in Milwaukee.



Milwaukee Streetcar Round-Up

Apr 19th, 2009 | By | Category: Downtown, Milwaukee Streetcar, Scott Walker, SERTA, Tom Barrett

The Milwaukee circulator streetcar is moving forward, but there is still confusion in the mind of many.  We’ve covered the issue in the past, but this article attempts to bring everything together in one place, the history, the frequently asked questions, and the proposed route.

Timeline

1991 – Milwaukee awarded $289 million for the construction of a dedicated-bus lane in the East-West Freeway corridor (Interstate 94 from Downtown to Waukesha).  When the plan was canceled, the federal government took back $48 million.

1998 – Jim Rowen at The Political Environment has the best summary

Then Gov. Tommy Thompson prevailed on Rep. Tom Petri (R) to allow Thompson to direct the transit funds to other transportation projects, including freeways, because Thompson wanted the money for the Marquette Interchange reconstruction. Intervention by then-Rep. Tom Barrett (D), and Sen. Herb Kohl, (D), prevented that outcome – - and I don’t recall then State Rep. Scott Walker, (R), piping up and complaining that would mean less money for Milwaukee County buses someday.

1999 – A deal between County Executive Tom Ament, Mayor John Norquist, and Governor Tommy Thompson and approved by the federal government diverts $149.5 million to a series projects that include the construction of the new Marquette Interchange, the 6th Street Viaduct, and Canal Street.  The fund (which does not gain interest) is left with $91.5 million designed for capital costs of a downtown circulator starter system.  To access the remaining funds, approval is needed from the Milwaukee Mayor, the Milwaukee County Executive, the President of the MMAC, and the CEO of the Wisconsin Center District (WCD).

2006 – The Milwaukee Common Council approves an electric-guided bus plan, backed by the MMAC and WCD, intending to move it into preliminary engineering.  Mayor Tom Barrett vetos the $300 million proposal, the majority of the Common Council reverses their previous position and upholds the veto.  Plan killed.  Credit the Common Council for trying to do something on the issue, but the system was seriously flawed and I think that was realized at the end of the day.

2007-2008 – Tom Barrett and Scott Walker each pushed the issue of the $91.5 much more publicly.  Barrett unveiled a plan that included a downtown streetcar loop and two express bus lines, and talked of reconfiguring existing bus service to work with new, express service.  Walker unveiled an express bus plan scant on details, but complete with attacks on the Mayor’s plan.  It appeared he had the intention to simply cut all standard bus service in the areas to be served by express buses.  Both, being career politicians, cleverly avoided any mention of the money needed to operate such a system after building it.

September 9th, 2008 – Tom Barrett and Scott Walker debate the merits of their respective proposals at a forum at Marquette moderated by Mike Gousha.  Barrett offers to split the $91.5 million 50/50 in person to Walker (an idea he had been proposing for weeks if not months prior), Walker refuses.

March 2009 – Senator Herb Kohl and Representative David Obey include an earmark provision in the bill that became the Omnibus Appropriations Act of 2009 that divided the $91.5 million between the City of Milwaukee and Milwaukee County.  Milwaukee County received 40% ($36.6 million), with the City of Milwaukee receiving 60% ($54.9 million).  Barrett and Walker are each now free to pursue using their respective allocated funds to build a new mode of transit service in Milwaukee.

More details on the origin of the money, and past issues is available in an article on Milwaukee transit politics.

FAQ

Is the streetcar proposal part of the proposed Regional Transit Authority (RTA)?

No, but in the future it could become part of the RTA.  At this time no serious discussions have taken place between the City of Milwaukee and appointed-members of the RTA (outside of of course the Mayor’s appointee Sharon Robinson).  The RTA is currently being debated in the Wisconsin State Senate and State Assembly after being included in the Governor’s budget proposal.  It would allow the counties of Kenosha, Racine, and Milwaukee to enact a sales tax up to 0.5% to fund transit services (key aspect: it would not enact the sales tax as further action would be needed locally in each county).

Does that streetcar affect the current transit funding crisis?

No, the $91.5 million is not available for operating costs of MCTS.  Nor, despite what Scott Walker advocates, does the implementation of a streetcar compete for funding against the existing transit system.  The key to fixing the existing transit funding crisis is to obtain dedicated funding.  Currently property tax dollars from the general fund of Milwaukee County are used.  These are supplemented by dollars from the state.  When this is not enough (as it not been numerous years in a row) federal dollars designated for capital expenses (new buses) have been used for operating expenses.  This problem has been looming for years, and has been postponed with service cuts and fare hikes.

Does the streetcar stand a better chance of being built with the RTA in place?

Yes.  The RTA would provide a dedicated funding source for transit in Kenosha, Racine, and Milwaukee counties.  It could also serve as the operator of multiple services in place of MCTS and other existing services, this included the KRM commuter rail line and potentially the streetcar.  The streetcar proposal currently has the majority of the funding needed for construction (capital costs), but not for the operating budget.  The RTA is a logical fit for operation of the streetcar, especially since the proposed route would sync with the RTA-proposed KRM commuter rail line at the Milwaukee Intermodal Station.  The RTA is likewise a good choice for the operator of the region’s bus transit services as centralized branding, route planning, and uniform ticketing will lead to the attractive and cost-effective intermodal transit system.

Where would the streetcar run?

On steel rails embedded in the road in the same lane as traffic runs on.  The rails would not damage cars or cause a bumpy driving experience.  Unfortunately for road bikers, narrow tires may get stuck in the space between the rail and the road, but there isn’t a shortage of streets in downtown Milwaukee that bikers can utilize.  Portland, perhaps the most bike friendly city in America, has avoided this problem by dedicating space for bike lanes or having bike lanes intersect streetcar tracks perpendicularly.  The streetcar would also have signal priority, so it won’t get stuck at stop lights.  An example image from Portland is included below.

portlandstreetcar

Would the streetcar eliminate street parking where it runs?

Rarely.  Depending on the configuration of the street and the location of the stops minimal parking would be lost.  Using the same space for stops as the existing buses do would save stalls (and make logical transferring points) will reduce the need to eliminate parking. Additionally, using streets that don’t have much street parking on them to start (such as Van Buren Street south of Juneau) will make the loss of parking minimal.  An example image of how a streetcar stop may function is included below, remember that the spot is already “unparkable” as it is a bus stop.

streetcarstop

What’s the difference between a streetcar system and a light rail system?

There is a three-fold difference between streetcars and light rail.  The first is the intended users, streetcars work within a handful of densely populated neighborhoods circulating people (light rail connects location at least a couple miles apart (downtown to the airport, UWM, or Miller Park, with maybe one stop inbetween each).  The second difference is the type of track such a system would need, to go longer distances a light rail system a dedicated right-of-way is needed where no other vehicles can run.  Longer travel distances also yields itself to bigger and longer trains, bigger trains mean bigger stations.  Streetcars, as their name, indicates run in the street, with traffic and are much shorter (and smaller) than light rail vehicles.  The third difference is the cost.  Light rail costs more, at least $10 million more per mile, Tucson, AZ estimates light rail would cost $30 million more per mile than a streetcar (numbers will vary based on size of system, need for land acquisition, and road configuration).  At the end of the day it’s an apples-to-oranges comparison though as they serve different purposes.

More discussion on this issue can be found in a previous article on transit technologies.

Why not a bus instead of a streetcar?

Quality of the ride, and the chance of sparking investment.  Riding on steel rails provides a very smooth ride, on top of having curb bump-outs at stops so there isn’t weaving in and out of traffic, and signal priority to avoid waiting at stop lights.  Second, investing in the steel rails in the ground has a great chance of sparking development nearby as has been shown in numerous other cities where modern streetcar systems have been built.  It’s a show of confidence that a bus can’t deliver.  There is also an unfortunate reality that there is a stigma attached to standard bus service, and that people will ride the streetcar that would rarely, if ever, ride a standard bus.

No one would ride the streetcar

False.  The 78,000 or so people that work downtown along with the 15,000 that live downtown are likely riders.  That’s before entertainment is considered, to which the streetcar would enable people to avoid paying for parking next to the Bradley Center or other venues and park in other areas of downtown.  It would be a boost to downtown businesses, as it would encourage people to move about the area after parking.  Current MCTS riders would also have their ability to move about the downtown extended, which might allow some to take a bus downtown and the streetcar to their ultimate destination (or save someone currently taking a long walk).  Riders of the future KRM commuter rail line will be able to get off at the station and ride the streetcar to their ultimate destination.  The last and final obvious group of potential riders is tourists, who stay at all the various hotels around downtown or drive into downtown to the convention center and currently don’t go elsewhere in the city.

Why Only 3 Miles In Length?

Money, money and politics.  The federal money was donated to create a starter system.  At a cost between $18-$30 million per mile, three miles would keep the cost below $100 million and provide a starter system with obvious routes to UWM, the west, and the airport as potential future extensions.

Looking at various routes, also yields the reality that three miles is about as short as one can go before the system doesn’t connect anything.  It won’t be easy for the city to obtain the remaining money to build the system, but it won’t be impossible either.  To put it in perspective, the final cost of Miller Park is four times that of the streetcar proposal.  Still, it’s a lot to swallow politically, so as Barrett says “it’s the goldie locks plans, not too big, not too small, just right.”  If you disagree, run for Mayor or County Executive, just don’t be surprised when you get laughed out of the room.

Who is going to pay for the rest of the capital costs?

The portion the city received for the streetcar from the $91.5 million was $54.9 million, which is a significant amount, but not enough to cover the costs of Tom Barrett’s proposal.  That leaves options to fund the remainder.  The likely funding option is that the city bonds the money to build it, and it is paid back through the general property tax fund.

Another possiblity is that a benefactor or two could fund the system. Michael Cudahy has been an outspoken advocate of a streetcar system, flying Walker and Barrett around the country (and to Ireland) to look at different systems.  He had mentioned funding the capital costs for his own route, so there is an outside chance Barrett could convince him to fund some portion of the ultimate route.

Using the RTA’s potential bonding ability (as derived from its sales tax collections) is extremely unlikely, but is technically a possibility.

Theoretically one could also put together a series of tax-incremental financing districts to pay for the capital costs, but that would hamper the city’s ability to collect the increased property tax revenue that the line would generate through transit-oriented development.

Winning Route of the Urban Milwaukee Streetcar Contest

We held a contest seeking out the best possible three-mile streetcar route, and a clear winner emerged.  We’ve included that route below as the Mayor’s route isn’t final until there are rails in the ground.

View Transit Idea A in a larger map



Weekly Bookmarks – Monday, 20. April 2009

Apr 19th, 2009 | By | Category: Bookmarks


Upcoming Events for the Week of April 20th, 2009

Apr 19th, 2009 | By | Category: Weekly Events
April 20, 2009 1:30 pm
The City Plan Commission (CPC) is the City’s official planning body established under State statute and is responsible for master planning activities. The CPC advises the Common Council on a variety of land development issues including zoning map changes, revisions in the zoning ordinance, subdivision approvals, business improvement districts, street and alley vacations, public land [...]
April 20, 2009 3:00 pm
The Milwaukee Historic Preservation Commission (HPC) administers Milwaukee’s historic preservation ordinance, adopted in 1981, which provides certain kinds of legal protection for buildings or sites that have been declared historic by the Common Council. The HPC is responsible for designating historic landmarks and historic districts and for approving Certificates of Appropriateness (COAs) for permission [...]
April 20, 2009 5:30 pm
The American Recovery and Reinvestment Act (ARRA), also known as “the federal stimulus,” is an unprecedented opportunity for the City of Milwaukee. To date, the City has been notified it will receive just over $33 million in funding for projects and programs ranging from public safety to energy efficiency to workforce and economic development initiatives. [...]
April 23, 2009 6:00 pm to 8:00 pm
The City of Milwaukee is updating its downtown master plan to guide development over the next decade. All residents, business-owners, employees, and anyone with an interest in the future of the downtown is invited to participate in a downtown community workshop. The two-hour workshop will provide an opportunity for you to meet the downtown plan [...]
April 23, 2009 7:00 pm to 8:30 pm
Speaker: Timothy Beatley, the Teresa Heinz Professor of Sustainable Communities at the University of VirginiaThis lecture will explore the meaning of resilience for cities and urban populations, the challenges faced ahead, and some of the important planning and policy strategies that will help cities become more resilient. Mr. Beatley will review key findings and recommendations [...]


City of Milwaukee: Downtown Plan Workshop

Apr 19th, 2009 | By | Category: Events

The City of Milwaukee is updating its downtown master plan to guide development over the next decade. All residents, business-owners, employees, and anyone with an interest in the future of the downtown is invited to participate in a downtown community workshop. The two-hour workshop will provide an opportunity for you to meet the downtown plan team and to envision the future of downtown with a hands-on table top exercise. We want to use your knowlegde and experiences as the city strives to provide a framework for development that encourages investment and builds a unique sense of community and place. The Downtown Plan workshop will be on Thursday, April 23rd, from 6-8PM at the Todd Wehr Conference Center on the MSOE campus at 1047 N. Broadway.

Click on the link below for more information:

http://www.mkedcd.org/planning/plans/downtown/index.html



Citizens Town Hall Meeting

Apr 19th, 2009 | By | Category: Events

The American Recovery and Reinvestment Act (ARRA), also known as “the federal stimulus,” is an unprecedented opportunity for the City of Milwaukee.  To date, the City has been notified it will receive just over $33 million in funding for projects and programs ranging from public safety to energy efficiency to workforce and economic development initiatives.

Please attend this important Town Hall meeting to:

  • Learn how City government is working to access and spend stimulus funds.
  • Learn how Milwaukee residents will receive substantial and direct benefits from these funds.
  • Share your views about stimulus funding.

April 20, 2009—5:30 p.m.
Central Library—Centennial Hall
733 N. 8th Street

Questions? Contact the Office of Mayor Tom Barrett (414) 286-2200



2009 Charles Causier Memorial Lecture: Planning for Resilient Cities

Apr 19th, 2009 | By | Category: Events

Speaker: Timothy Beatley, the Teresa Heinz Professor of Sustainable Communities at the University of Virginia,

This lecture will explore the meaning of resilience for cities and urban populations, the challenges faced ahead, and some of the important planning and policy strategies that will help cities become more resilient. Mr. Beatley will review key findings and recommendations of his recent book “Resilient Cities: Responding to Peak Oil and Climate Change” (with Peter Newman and Heather Boyer), and will present promising examples of North American, European and Australian cities taking steps to move in the direction of resilience.

This presentations will take place at the UWM School of Architecture and Urban Planning (SARUP) from 7:00 – 8:30 pm in Room 170. SARUP is located at 2131 E. Hartford Avenue, Milwaukee, WI.

This lecture will be registered with the APA for 1.0 CM Credits for AICP Members in attendance.

The attached brochure contains further details, including a speaker biography and brief abstract. As always, if you have any questions, please do not hesitate to contact me at griepen4@uwm.edu.

Brochure