This meeting had a couple of topics of particular interest, the use of eminent domain, and TIF policy.

The first file of interest involved the possibility of the Redevelopment Authority of the City of Milwaukee utilizing eminent domain to acquire two properties and convey them to Pete’s Marketplace, Inc. which would expand its facilities and add between 30 and 40 new employees.  Alderman Murphy expressed his concern over the City of Milwaukee taking such an action saying “I’m very reluctant to support the use of eminent domain.”  Despite offers of $275,000 for the vacant lots, at 1443 and 1445-47 S. Muskego Ave., the properties were recently appraised at approximately $15,000, because the owners, the Cetina family, had over the time they’d owned the property been required to demolish the existing buildings on the site due to their conditions.  The Cetina family had attempted to construct a new building for the purpose of opening a restaurant or nightclub, but neighborhood opposition stopped them from obtaining a liquor license.  This file was approved and will now go before the full Common Council.

There was also a communications file reporting about activities related to the City of Milwaukee’s Tax Incremental Financing Districts.  The report predicted that in 2010 the city could close three more districts, unless they are extended, including district 56 which is notably “extremely lucrative,” and five districts appear they could be closed in 2011.  It also showed that districts 20 and 21 are currently under-performing and will need to receive donations.  Finally, it also pointed out that in 2008 there was $1.2 billion in increment which represents 3.7% city’s total equalized value of $32.3 billion.

During this discussion Alderman Bauman seem to argue that city needs to utilize TIF more often and with more projects during this downturn when he asked “what precisely are we doing to prime the pump?”  He brought up New Land Enterprises’ proposed building at N. VanBuren St. and E. Kilbourn Ave. and expressed his concern over the Department of City Development not pushing projects that request TIF funds.   Specifically, he said we have “put a big bucket of cold water on the project behind closed doors,” and added that “if you don’t bring the project forward we can’t have the debate.  James Scherer, of DCD , responded that “my concern with it, was that it had no equity in it at all.”  Alderman Murphy agreed expressing that “if nobody has any skin in the game there is no reason to have them as a partner.”

Planning for the future of Milwaukee as the Fresh Coast appears to be moving ahead.  Over one hundred companies and five of the largest water companies in the world have a presence in the Milwaukee area.  The City of Milwaukee and UWM are working to tap into this resource by creating a water research district and in UWM’s case establishing a new School of Freshwater Sciences.  A first step in this process was represented by file number 081544 which will create a boundary area for the redevelopment plan and designate the area blighted.  The boundary area can been seen on this map and includes the Port of Milwaukee, the Great Lakes Water Institute and properties in the vicinity.  Dan Casanova, from the Department of City Development, explained that this plan will allow them to “create jobs, remediate brownfields, and improve access to the water” and added that it will “further the mission of the M7 Water Council.”  He pointed out that the designated area has a defective street grid, and numerous deteriorating sites and structures.  Alderman Murphy spoke of the value of water to Milwaukee’s economic future and summed up his support for the project saying “I think we have a great opportunity here in the city.”  Showing this efforts widespread support the entire committee was added as cosponsors.  This file was approved and will now go before the full Common Council.

The City of Milwaukee is moving to foreclose on the Esser Paint property within the 30th Street Industrial Corridor.  Once that process is complete the approval of file number 081542 will assign a blight designation to this property and allow acquisition by the Redevelopment Authority of the City of Milwaukee. Benji Timm, from the Department of City Development, explained the site has a multitude of environmental and safety issues, but that the department believes a solution is manageable.  These issues included, contamination, underground storage tanks, asbestos, and that some of the buildings are collapsing.  The plan is to utilize HUD, EPA, and Wisconsin DNR funds to cover the cost of site cleanup which would include $500,000 for demolition, $50,000 for site assessment, and $100,000 for underground tank removal.  This file was approved and will now go before the full Common Council.

Even during this economic downturn the City of Milwaukee continues its efforts to cleanup environmentally contaminated sites within the city and prepare them for redevelopment.  Superficially, this file would give blight designation to six city owned lots, in the Riverworks area, which will allow the Redevelopment Authority of the City of Milwaukee to obtain EPA funds to conduct remediation efforts.  Once completed it would be the goal to put these lots out for possible redevelopment.  This file was approved and will now go before the full Common Council.

File number 081419 proposed that the often delayed and long awaited missing link in the Beerline section of Riverwalk to be funded through the Department of Public Works and reimbursed by the property owner.  The construction of this link, that abuts the Brewers Point Apartments, would be carried out by Titan Builders for $250,000 and should begin construction this spring with the intent of being completed within the year.  This file was approved and will now go before the full Common Council.

Martin Collins’ retirement left the Department of Neighborhood Services with a significant leadership gap.  Art Dahlberg, from Richmond, VA has been tabbed as the person to replace Mr. Collins as the Commissioner of Neighborhood Services and clearly the committee was cautiously optimistic.  He expressed his understanding of the position he’s walking into saying that “I recognize I’m filling some very big shoes here”.  Alderman Bauman asked about his philosophy regarding the demolishing of older housing stock and if he felt this was a good or bad choice.  Mr. Dahlberg indicated that it was to be used as a last resort saying “it is not a broad solution, it is a fine tool that we have to use”.  The committee approved his appointment and it will now go before the full Common Council.

Another item of note was the potential city land sale of 3427-3429 West Villard Avenue.  This land sale would allow the Northwest Side Community Development Corporation to move forward on a four-story mixed use development that would include the Villard Library moving in to the first floor of the new building.  In addition to the library the upper floors would include 47 affordable housing units targeted at “grandfamilies”.  The project will be developed by Gorman & Company utilizing low-income housing tax credits and new market tax credits.  This item was approved and will now go before the full Common Council.

We had originally speculated about the origins of the ban on carry-ins at Jazz in the Park.  Our speculation was that it was really a money issue, but that we thought the East Town Association had the right to and should attempt to generate money from the event.

Today we received just about all we needed to confirm our suspicions, a couple of great quotes from the Milwaukee Chief of Police Edward Flynn courtesy of the Journal Sentinel article Jazz in the Park fans have a whine and cheese party.

“It’s the first time I’ve been thrown under a bus by a wine-drinking Brie-eater,” he said.

“Listen, I can’t tell you the Police Department is not going to enforce appropriate laws. I will tell you that when it comes to an event like this, we’re going to respond to conduct. We’re not doing anything pro-active.”

Translation: The police don’t care if you uncork your own bottle of wine or pop a few carry-in beers at Jazz in the Park, as long as you’re peaceful and behave.

Flynn communicated this to Kate Borders, East Town’s executive director, when he saw her at the fest last summer. “Against the backdrop of 19 years of no major incidents there, I certainly assured her that we weren’t suddenly going to become revenuers,” Flynn said.

It’s perfectly reasonable for the East Town Association to want this event to break-in, or even generate a profit to support area businesses, no one should complain about that.  What is a shame is how this whole thing has been handled.  The East Town Association has done nothing to help itself here, failing to control and soften the reaction at every step of the way.  The statements from Chief Flynn, that contradict earlier reports from the East Town Association, are just another step in this saga that probably isn’t over.

Let’s at least give it a catch title.  Jazzgate?

The Northeast Side Area Plan which will lay out the vision and guidelines for development within this a large portion of the city was brought forward for approval.  Alderman Bauman proposed two amendments both of which impacted the location of future University of Wisconsin-Milwaukee expansions.  One amendment would of made it part of the plan that the City of Milwaukee wouldn’t support construction of new UWM dormitories on the East Side with the possible exception of the former Columbia St. Mary’s Hospital site.  The other amendment would suggest that UWM build future dormitories in downtown Milwaukee.  Alderman Bauman added that “they should re-double their efforts to locate these dormitories in the central business district”.  Alderman Zielinski felt the plan didn’t included enough of the proposed Milwaukee River Overlay District, saying that “I was hoping to see something more concrete”.  Further discussion explained that the plan included a high level summary of the overlay district and that the specifics are still being worked out between property owners and neighborhood residents.  This file was held to allow for more discussion regarding the possible amendments and to add additional content to the Bronzeville section of the plan.

Also of note was Neighborhood House’s appeal of the Historic Preservation Commission’s denial of approval to demolish a pre-1850’s home in the Historic Concordia neighborhood.  Neighborhood House had purchased the house to add parking spots and build a bus turnaround.  Numerous community members spoke out in opposition to this proposal and the committee seem to recognize their concerns.  Alderman Wade stated that “I’m probably not looked at as a friend of the historic preservation folks, historically” but went on to explain that he was glad to be on their side on this issue in this case.  Other committee members indicated they were swayed by the citizen reaction and felt there were other options that could be explored to facilitate the bus.  This resolution was denied.

Two significant East Side projects, New Land Enterprises’ Kenilworth apartment building and Mandel Group’s dormitory proposal, were on the agenda for this committee meeting.

First up was New Land Enterprises’ Kenilworth apartment building proposal.  This proposal had been held at the previous committee meeting to allow for an “informational” meeting with the neighborhood.  As the committee had indicated at the prior meeting they felt that overall this was a positive development for the city.  It was approved and will now go before the full Common Council.

Bob Monnat, the chief operating officer of Mandel Group, pointed out four items of note regarding the proposed UMW dormitory project.  First, he noted that this project has received unanimous support from the East Side BID.  Secondly, he explained that UWM has as of the time of the meeting, committed in writing to expand several safety programs.  Thirdly, he noted that Mandel Group has voluntary offered to met at least an 18% EBE requirement and he referred to how bad the economy has been for contractors when he said, “Boy do these guys need it.”  Finally he pointed out that they’ve been working on this plan since June, and having spent a considerable amount of time engaging the neighborhood, wish to move forward so they can begin work in the next ninety days.

Each year 90% of incoming freshman at UWM apply for university housing but because of the shortage of beds thousands are turned away each year.  David Gilbert, UWM Foundation President, pointed to national research that indicates, as he said, “student success is directly tied to the ability to live in university housing.”  He went on to explain that because of this potential positive impact on student grades this is one of the driving factors behind the efforts to build new dormitories.

Tom Luljak, Vice Chancellor of University Relations and Communications, stated that “we believe these investments are already making a difference,” and pointed to their research that indicates that there are 300 fewer students living in the neighborhoods since the opening of the RiverView dorm.  He added that  “we, like the neighbors believe that quality of life is absolutely essential,” and went on to explain how the university views the East Side as a recruiting tool.

Alderman Bauman said he would support this project but wondered why the university wouldn’t even consider building a dormitory downtown.  He pointed to a part of downtown Chicago that is home to 50,000 college students explaining that this student population supports retail and improves downtown Chicago’s vibrancy.  He took the opportunity to express his near anger over UWM’s proposed expansion of the Engineering school to Wauwatosa, saying that “I’ve been frankly dying to make these points known.”  He made it clear to UWM that they need to consider downtown for future dormitories and implicitly for the Engineering school when he said that “I will never support another UWM dorm project on the East Side.”

Alderman Kovac reiterated Alderman Bauman’s comments regarding UWM’s expansion plans saying, “build those satellite campuses downtown.”  He then explained the long process that this project has gone through and spelled out the criteria he expected the new dormitory and UWM to respect.

• The setback and height restrictions should respect the overlay district guidelines.
• The building should be LEED certified and has green features.
• The site should include public access to the river trails.
• The PILOTS payment is large enough to cover the city costs.
• UWM would commit in writing to expanding its neighborhood safety programs.

He indicated that UWM and the development team had met these criteria and the project should move forward.

Only Teresa Kinis, the Chair of the Riverside Park Neighborhood Association, appeared in opposition and she reiterated her previously stated reason saying that, “I’m more concerned with the end client.”  Alderman Wade speaking to Teresa and the broader audience, summed up an often forgotten point, when he said that “we never get 100% consensus.” Explaining that sometimes they have to make tough decisions and in this case he was supporting this project.  The resolution was approved and will now go before the full Common Council.

Bob Monnat, the chief operating officer of Mandel Group, gave a short presentation covering the history behind the development of this site.  He explained that Mandel Group had originally planned to take advantage of the stunning views from the site and create a commercial use development.  When UWM put out the RFP for a new dormitory Mandel Group responded after determining this could be a better fit for the site.  Throughout the efforts the building was set back 50 feet and limited in its height.  He explained that as the project evolved through working with the Milwaukee River Work Group and other community members that “we actually ended up with a better project.”

Jim Shields, the project architect, reminded the commission and residents that “one of the big stories here is, I think an environmental or green story.”  He was referring to the numerous green features that this project utilizes to create a sustainable development.  These features include the project being a high-density development, that has good transit access, green roofs and rain gardens.  He also pointed out that project is very likely to receive LEED Silver certification.

A group of residents spoke in opposition to the project for a variety of reason including, parking, protecting the river, and concerns over too high a “student density.”  Teresa Kinis, the Chair of the Riverside Park Neighborhood Association, spoke in opposition of the project because of her concerns over the impact of the new students on the river saying it is “the problem of student density” that she is concerned about.  Pam Frautschi, spoke in opposition with her concerns revolving around the potential impact of the increase in population density on the neighborhoods.  Else Ankel was opposed to density as well arguing that it would hurt the river and then directed her comments to Alderman Kovac saying, “I urge you to listen to the people who elected.”  Joe Klein, who was representing a new coalition of neighborhood association’s called 3DNA, argued that “this is the wrong building, in the wrong place.”  He explained that the group felt this would be precedent setting and that the dorm would be too dense.  He also remarked on the process saying “we don’t feel that we’re fully engaged with the university.”

Sura Faraj appeared to insult commission members saying “I’m not sure why each of you are on the commission, perhaps it’s because you truly want to see better development in this city, and give a voice to the citizen perspective, or maybe it’s just to put another notch in you resume belt.”  Although she has been a member of the Milwaukee River Work Group, she questioned the group’s efforts saying they held “closed door meetings” with the developer regarding the project.  She went on to say that “high density development should never abut a primary environmental corridor” but didn’t give any reason as to why this would negatively impact the river.  She ended with a long rant about the need to protect water because it is the new oil but again didn’t explain how this project would negatively water quality.

On the other side there were a variety of residents, local business owners and contractors that spoke in favor of the project.  A number of local contractors explained that the recession has had dramatically negative impacts on their business and employment levels in the city.  Tony Arteaga, the Owner of Artega Construction, spoke in favor of the project explaining that his company has gone from 150 to 30 full time employees and as he said “a project like this is desperately needed in the City of Milwaukee.”  Two other contractors indicated that the are experiencing the same issues and added that as EBE certified contractors these job would help central city residents.  Sheldon Opppermann, a resident of Cambridge Woods, lent his support to the project explained that “the university is what attracted me to the neighborhood” and that “this is the best answer to absentee landlords.”  Ann Brummitt, Coordinator of the Milwaukee River Work Group, expressed some concerns but did express that “yes it [the project] does indeed respect the guidelines.”

Jim Plaisted, the East Side BID Executive Director, explained that the BID board of directors voted unanimously to support this project and they are working to negotiate a voluntary donation from UWM to the East Side BID.  He also presented a letter from the owners of Ma Fischer’s Family Restaurant explaining how their business has increase significantly since the opening of the Kenilworth dormitory.  He argued that this increase in business wasn’t about more students but was about more population density in the general.  He summed up the importance of this project to the retail business on North Avenue saying “retail, follows residential its not the other way around.”

This change in zoning was approved by the commission.

Milwaukee should explore how land sales are managed in order to achieve the highest and best use.  If Milwaukee can become better at converting land from public and vacant to private and developed it will only be a benefit to the entire city by building a better urban fabric and raising the city tax base.

Currently land sales in Milwaukee, be it those executed by the state, county, or city, don’t allow for speculation and restrict developer freedom with the current purchase options/request for proposal process.  The process currently in place is designed to protect the interests of the city and to attempt to create a level playing field for developers.  It succeeds, sort of.

The current request for proposal (RFP) process involving publicly-held land works by announcing a request for development proposals, judging the replies, and granting a time-limited purchase option for the land to the winning party.  The system is not without flaws.  Submitting the proposals is burdensome for developers and requires a clear picture for the use of all of the land in the parcel before ownership is even granted.  If a developer wins the option to purchase the land, there is very little control on their execution of the proposal.  The option contracts also are often structured as such that the time component is virtually meaningless as they are frequently extended to avoid having to restart the process.  The final large problem is that the process is slow and does not allow a market to form around the land as it would for private land.

The Changes

Applying more market principles to the RFP process might speed the transition from public and vacant to private and developed for publicly-held parcels.

The first of such adjustments should be to allow speculators into the market.  With the current process, developers are effectively the only parties that can buy parcels with a requirement that a proposal be submitted first.  By regulating the use of land with zoning the desired use can be created flexibly after the sale of the land.  Zoning codes would need to become more detailed to include explicit minimums (and potentially maximums) along with use types to ensure that any development of the land benefits the area around it.

The second of such adjustments should be to make the public land more closely mimic the properties or private property before it is developed.  Currently the RFP process requires land to frequently be bought as a single parcel, with no flexibility to sell portions to others.  Speculators should be able to obtain a contract for a plot of land at auction and have the ability to parcel it out to others to develop.  Parceling of large blocks of land could be done after the contract was obtained, not before as is currently required.

The third adjustment to the RFP process should be to enhance the time-limited option contracts currently created.  Allowing speculators into the market has the danger of creating parcels that remain undeveloped for years, and a safe guard is needed.  To encourage the ultimate goal of getting the land developed, contracts should be granted with yearly fees that grow annually.

A per square foot cost can be assigned to the land, so if a specular wishes to sell or develop a portion of a parcel they may.  When the land is ultimately developed, the portion used should be paid for in full, instead of just the option cost.  However, the amount paid on the option could be applied towards the cost of the land.  This would allow higher option prices to be charged, while further enticing development the longer a parcel is held (coupled with the higher option costs each year).  The price paid on the option will be able to exceed the actual cost of the land, encouraging the land to be developed or to let the contract lapse.

If a contract owner wishes to exit their obligations of the growing annual payments, they can simply sell their contract to another party or notify the land-holding agency that they wish to release their remaining contract options.  This would allow partial development (to corresponding zoning codes) of a parcel, while not forcing other portions to remain undeveloped.  To prevent the building of a structure by a developer and the failure to build any landscaping on small portions of the land remaining (which would then be released back to the government unit undeveloped), the contract would have to stipulate a minimum divided parcel size.

The Intended Effects

How would this change Milwaukee as it is now?  In the past ten years the largest example of the RFP process has been the reclaimed land from the former Park East Freeway spur.  While small border parcels are being infilled, almost all of the land that has come under the ownership of the county has remained undeveloped.  Why?  Simply the lots are too big.

By allowing speculators to buy the land at auction without proposals (but with strict zoning codes) and affording them the flexibility to sell smaller parcels, much of the land may have been developed already. Furthermore, the escalating annual payments would have begun to push developers like RSC & Associates off their block of land, opening it up to the market again.

Developers like Robert Ruvin, who win RFP option contracts, then struggle (or fail) to actually develop the land would be given options to reasonably scale back their projects by using less land (at less cost).

The state of Wisconsin Department of Transportation (WisDOT) will soon begin selling the parcels used during construction of the Marquette Interchange.  Allowing them to use a more market-based approach would allow them to sell options on the land to private interests, begin to see a revenue stream immediately, and have private interests searching for developers.

If you’re questioning the possibly that such a plan allowing subdividing would work, look no further than the former Pabst Brewery.  The Brewery Project stewarded by Joseph Zilber has successfully parceled off buildings that will create an entirely new neighborhood.

New Land Enterprises was before the committee requesting a change in zoning to construct a 5-story apartment building to be located on North Farwell Avenue and East Kenilworth.  Although the current zoning would allow for 33 units New Land Enterprises intends for 91 units to be constructed.  Individual units would range in size from 560 square feet to 850 square feet and would include one parking spot.  It was generally accepted by the committee that this plan for higher density with smaller units would in fact be better for the neighborhood.

New Land Enterprises’ has held three meetings with local stakeholders, including the East Side BID, and faced no opposition at the City Plan Commission.  Jim Plaisted, East Side BID Executive Director, lent his support to the project stating “we feel this is a quality infill development.”

Despite those efforts and overwhelming support by the committee, Alderman Kovac made an unusual move and asked for the file to be held for one cycle.  He stated, “I would like the general residents of the 3rd District to have a chance to see this plan,” and added  that “it’s going to be the policy of the 3rd District going forward” to have public meetings for all development projects.  New Land Enterprises agreed to an “informational meeting” to be held but requested no changes be made to the design due this additional meeting as that would delay the project significantly.  Responding to Alderman Kovac’s request to hold the file, Alderman Witkowiak seemed exasperated as multiple times during the discussion he said “again with all due to respect, I don’t get it.”  Alderman Bauman added that “I don’t want to screw up the financing,” and Alderman Murphy followed up saying that “the worst thing is to have a meeting, and to already know the conclusion of the meeting.”

The committee held the file allowing Alderman Kovac to hold the “informational meeting,” but they clearly indicated that it will be moved forward at the next committee meeting.  Specifically, Alderman Zielinski ended the discussion by stating “when this comes before the committee next cycle we are approving it.”