Bookends North (Proposed)

Odds of New Land Enterprises project getting off the ground in the next twelve months are slim to none. Probably worse with the recent announcement that New Land satisfied a potential foreclosure by surrendering their Transera/Goll Mansion property.

Brewer’s Hill Lofts (Proposed)

Commonwealth Development Corporation received $1,313,568 in WHEDA tax credits to help finance the proposed 45-unit Brewer’s Hill Lofts on the corner of N. Holton Street and E. Brown Street. No other public details have emerged on this project yet.

Mercy Housing Lakefront – North Avenue (Proposed)

Perhaps the most active of any proposed project in the Milwaukee-area. After a number of revisions by Korb Tredo Architects and Mercy Housing Lakefront, this $8.5 million, 5-story, 54 unit project finally appears ready to seek full Common Council approval.

Mercy Housing Lakefront's proposal

North End Phase Two (Proposed)

The speed at which this $39 million second phase leaves the drawing board and breaks ground appears largely in the hands of the city at this point. Despite the eagerness the city had to finance The Moderne and the Bookends North proposals, the city to-date has not yet pushed through any type of financing the second building at The North End. The project would include two six-story buildings at 1551 N. Water Street. The Mandel Group had hoped to break ground in the spring of 2011.

Park East Commons (Proposed)

This project seems unlikely to move forward in the next twelve months, and may be dead all together. CommonBond Communities had agreed to buy a portion of the Park East block (bordered by Milwaukee, Jefferson, Lyon and Ogden) that RSC & Associates bought from Milwaukee County. CommonBond’s proposal was for 87 apartments, 61 underground parking spaces, and street-level retail (11,000 square-feet, owned by RSC). CommonBond was placed “on hold” by WHEDA for the $1,672,644 in federal affordable housing tax credits for which they applied. Prior to the CommonBond deal, RSC was approved for a $30 million bond issuance by RACM in January. To-date RSC has been unable to develop anything on the land.

The Moderne (Proposed)

The Moderne has had more false starts in the past year than the Chicago Bears. Initially, with financing from the city they hoped to break ground in November of 2009. That didn’t happen, so it was on to a planned December 2009 ground-breaking after the city awarded the proposal financing in early November. December didn’t happen, which led to Developer Rick Barrett believing February would see shovels in the ground, but due to a delay at HUD that didn’t happen. Next up was a September or October groundbreaking, which again didn’t happen because of HUD even though they awarded the project final loan guarantee approval in late August. Technically it could still happen in November, but now it looks like The Moderne will finally break ground in December of 2010 with HUD expected to finally close on the deal.

Nighttime rendering of The Moderne

Wangard Properties (Proposed)

Wangard’s proposal to develop an apartment building next to the HighBridge Condominiums on North Water Street received zoning approval in January of 2010. Wangard, as of August, was seeking a loan guarantee from HUD for the proposed 68-unit building, and had hoped to break ground in October 2010. Similar to the The Moderne, this project is still waiting on HUD to move forward.

Beerline B Apartments (Under Construction)

General Capital Group broke ground on the Beerline B Apartments in November of 2010. The project is financed in part by $2,345,310 in WHEDA tax credits. The project includes 140 units, and will occupy the long vacant corner of Commerce Street and Pleasant Street in Milwaukee’s Beerline neighborhood.

Beeerline B Apartments Rendering

Jackson Square Apartments (Under Construction)

Nearing the completion of construction in the Third Ward is Robert Joseph’s 81-unit Jackson Square Apartments.  When finished the project will feature 100+ underground parking stalls, and 9,000 square feet of retail space.  Rents will range from $800 to $1,600 with units split between one and two bedrooms.

Jackson Square Apartments Construction

National Lofts (Under Construction)

Dixon Development (Tim Dixon, Iron Horse hotel, Kramer Lofts) has begun demolition of the former Barry Trucking facility on the northeast corner of National Avenue and 1st Street. This development will be the first on the site, and will be placed at the back of the lot. It is being financed through $1.5 million in federal affordable housing tax credits.

South Water Works – Building Three (Under Construction)

Lighthouse Development is in the process of building an additional 52-unit apartment building at the South Water Works development. Construction is expected to be completed by March of 2011. Average unit size in the new development will be smaller than the neighboring Bridgeview apartments (800 vs 940 square-feet).

Corcoran Lofts (Open)

Mandel completed the Corcoran Lofts in the spring of 2010. The building is connected to the existing Gaslight Lofts, and includes 76 apartments and 3,400 square feet of retail space.

Corcoran Lofts Construction

Hide House Lofts (Open)

The Hide House Lofts were completed in November of 2010. The Bay View development features sixty units on four floors. General Capital Group and Joseph Property Development built the apartments after a contentious battle with area residents in 2009, which largely centered around the building’s use of WHEDA tax credits to finance part of its construction. The Hide House Lofts replaced the portion of the Greenebaum tannery complex built in the 1940′s, the portion built in 1898 still stands.

Hide House Lofts Construction

Latitude Apartments (Open)

The Latitude Apartments were completed in August 2010. Originally a project of New Land Enterprises, the Latitude Apartments won full zoning approval from the Milwaukee Common Council in December 2008 and was sold to Dermond Property Investments for $2.1 million in January 2009.  The project is located at the intersection of Kenilworth Ave. and Farwell Ave. just across from the Kenilworth Square Apartments.  The $13 million project features 90 units, and 7,500 square feet of street-level retail.  The units are broken down into 71 one-bedroom units and 19 studios.  Units range in size from 650 to 1,000 square feet.  The project includes 90 underground parking spaces, with 13 reserved for retail tenants.

Latitude Apartments

Nighttime rendering of The Moderne

Following a long-awaited loan guarantee approval from the United States Department of Housing and Urban Development (HUD), construction will soon begin on The Moderne. The $55.2 million tower, which will stand at the southwest corner of Old World Third Street and Juneau Avenue, will contain 203 apartments, 14 condominiums, 204 structured parking spaces (181 apartments, 23 condos), and 7,230 square-feet of first-floor retail.

The City of Milwaukee had previously approved $9.3 million in loans to finance the project, but they were conditional on the approval of a loan guarantee by HUD. The guarantee was expected to be approved in February, but an overwhelming number of applications received by HUD forced an approval slowdown. To gain approval from the Common Council for a loan from the city, developer Rick Barrett (no relation to the Mayor) agreed to increased levels of Business Enterprises (EBE) program participation (25%) and Residential Preferred Preference (RPP) program participation (30%), and a first-lien personal guarantee of $4.35 million.

The majority of the project is being financed by a $41.4 million loan from  Capmark Financial Group Inc and the AFL-CIO Housing Investment Trust.

The Moderne does not fall within the footprint of the former Park East Freeway, but does fall within the tax-incremental financing district setup after freeway demolition (TID 48). Apartment rents are projected to be $1.94 per square foot in 2013. Average planned sale price for the condos is projected at $939,000. Leasing for the retail space is projected to bring in around $22 per square feet.

The Moderne, designed by Rinka Chung Architecture, tower will stand tall over its surroundings at 30-stories, dwarfing the nearby Bradley Center, Aloft Hotel, and Full-screen4th and Highland Garage. Eventually, the development may not stand alone as the remaining Milwaukee County-owned Park East parcels are developed.

Related Links:

• The Moderne website
• City of Milwaukee Legistar file pertaining to city loans
• Moderne high-rise loan guarantee wins final OK, work to begin soon (August 27th, 2010)
• Activity at The Moderne Site (Jan 4th, 2010)
• The Moderne Gains Common Council Approval for City Loans (Nov 3rd, 2009)
• The Moderne Project Held for Special Committee Meeting (Oct 27th, 2009)
• The Moderne Likely to Receive Public Financing (Sep 15th, 2009)
• Aerial Site Photo (with orange shipping containers still in place)

First, up of course is The Moderne, which borders the Park East and is scheduled to break ground in February.  This $56 million, 30-story high-rise apartment project received city financing in late 2009 and when built out could serve as a catalyst to further development in the corridor.

Another significant project that appears to be advancing is the first phase of RSC & Associates’ Park East Square proposal.  This first phase would include a 120-unit apartment building with 4,000 square feet of retail space.  Recently it received assistance from the Redevelopment Authority of Milwaukee (RACM) which would issue $25 million in revenue bonds to help the project move forward with the intent of breaking ground in late spring.  Although, RSC & Associates have failed to meet ground breaking goals in the past with RACM’s assistance it appears this project is likely to move forward.

At a Zoning, Neighborhoods & Development committee meeting in October, 2009 Department of City Development (DCD) Commissioner Rocky Marcoux stated that Mandel Group would be bringing forward the second phase of the North End shortly.  As of yet this hasn’t occurred, but with the success of the first phase, combined with Mandel Group finishing up two major projects, Corcoran Lofts and Cambridge Commons, elsewhere in the city this year, they might look to continue their development within the Park East.

The $76 million Eco-Square at Park East proposal by Fair Market Development would build out 400 residential units and 10,000 square feet of retail space in Block 22 of the Park East if it were to move forward this year.  Unfortunately, as there hasn’t been any recent news regarding this project it seems like the least likely of the projects to move forward in 2010.

Finally, Rainier Properties II LLC’s office and movie theater proposal looks promising as Marcus Corp., has formally committed to the $100 million project.   The potential time-line for this project probably will push it beyond 2010, as various approvals, financing, and a likely city funded TIF will need to be worked out prior to ground breaking.  If it is able to meet those requirements this project could dramatically change downtown Milwaukee for the better.  Because, it is one of the key sites in the Park East corridor, would fulfill the long talked about downtown movie theater need, further extend the Riverwalk, and be a socially diverse meeting place that Milwaukee needs.

Certainly, there will be plenty of land in the corridor to develop post 2010 and only a couple of these projects will actually break ground this year, but with the addition of new density, new entertainment options, and new office space, it might just be that 2010 is remembered as the year of the Park East.

The project is being funding with $9.3 million in loans from the City of Milwaukee and a $41.4 million loan from the AFL-CIO Investment Trust.  The city loans were approved despite concerns over the potential risk to the city, and the potential for over-saturation within the residential market in downtown Milwaukee.  To obtain the city loans the development team, led by Rick Barrett, agreed to an Emerging Business Enterprise goal of 25%, a Residents Preference Program goal of 30%, and secured the personal guarantee with a first lien on assets of $3.3 million.

So we should ask if the Park East Freeway spur was worth keeping or is the long-term benefit more worthwhile than the long-term costs.  One of the big concerns regarding the removal of the Park East Freeway spur was that congestion would increase, but the numbers show that traffic delays peaked after the removal and have settled back to 2001 levels, the last full year of regular operation of the freeway spur.  Access to downtown Milwaukee has actually been improved, because the new street level boulevard allows drivers to turn on to more streets than the freeway spur allowed.  Simply, looking at it from a cost point of view, the freeway spur’s repair costs at the time of its removal were estimated at $100 million, clearly this is significantly more expensive to maintain than a street level boulevard.  From a tax base point of view, the freeway limited development of property, not just under it, but near it, and although it has yet to develop, the potential is at least there, and some neighboring properties have added to the tax base.

The big complaint in regards to the Park East is that development has been slow to take hold in the area.  Unfortunately, there is truth to this, but looking at the edges of the Park East corridor it is clear investment is starting to take hold.  Developments such as the North End, the Flatiron, the Aloft, the Brewery, and the soon to break ground Moderne are a direct result of removing the Park East Freeway spur.  These would of been undesirable sites to develop, because of limited access, a perceived disconnect from downtown, and the blighting influence of locating in the shadow of a concrete ramp.  Finally, Milwaukee has already proven it can fill-in underutilized land. The Park East Freeway was supposed to extend to the lakefront and the land was cleared for it, but the freeway never happened and the land sat vacant for years (east of the spur that was built).  That land now contains a long stretch of residential apartments, a Pick ‘n’ Save, and fits in the neighborhood fairly well.  It’s unfortunate that this land was ever cleared, but it shows Milwaukee can reclaim once underutilized land and can do it again.

There is no question that there are a number of factors that have slowed development in the Park East.  The lot sizes that Milwaukee County is attempting to sell are too large, which limits the number of developers able to participate and forces the scale of the development to a point that requires very significant financing.  It’s also possible Milwaukee County’s PERC regulations have limited the number of developers interested in developing within the Park East.  Further, these regulations may have played a role in developers requesting TIF’s from the City of Milwaukee to finance projects, though the existence of a direct relationship isn’t clear.  The problem that has come up more than once is developers having to deal with two levels of government with differing goals.  A clear example of this is RSC & Associates’ Park East Square proposal.  Milwaukee County closed on the land sale, despite RSC & Associates lack of financing, fluctuating plans, and continued attempts to gain City of Milwaukee financing for the project.

The opportunity lost had Milwaukee not removed the Park East Freeway spur was simply too great to miss out on, but it does seem it’s time for Milwaukee County to get out of the way and allow the City of Milwaukee to control the land in order to expedite development.

A rendering of The Moderne

The Moderne development received approval for $9.3 millions in loans from the City of Milwaukee that led developer Rick Barrett had been seeking.  At last week’s Zoning, Neighborhood & Development Committee three significant concerns were expressed by committee members, all of which were worked out prior to today’s Common Council meeting.  Committee members felt the levels of Emerging Business Enterprises (EBE) participation and Residential Preferred Preference (RPP) participation were to low and needed increasing.  The levels were raised to 25% and 30% respectively to address the concerns of the council.  Additionally, the developer improved the level of securitization of the personal loan guarantees at the request of the committee.  Finally, the committee had raised concerns over the terms of the default provision in the agreement.  These concerns all appear to of been addressed as it was approved by the Common Council with only Alderman Hines and Alderman Davis voted in opposition.

The proposed $55.2 million 30-story high-rise building would include 203 apartments and 14 condominiums.  It will be located on the edge of the Park East at the corner of N. Old World Third St. and W. Juneau Ave. across the street from the failed Palomar project.

The project’s most vocal opposition was Alderman Davis who argued that “there is no job training, no business development dollars attached” and that without these funds residents of Milwaukee don’t receive enough of benefit.

Alderman Bauman explained that the credit industry essentially locked up for any real estate development, no matter how good a project.  He added that this project has “outstanding architecture and design,” and could be an “iconic building,” but that this development “is a stimulus effort, we have to look at it from that perspective.”  Alderman Kovac threw his support behind the project saying that “extraordinary times, call for extraordinary measures,” and added that “I think the risk has been mitigated as much as possible.”

The proposal now awaits Mayor Barrett’s sign-off, which if received could allow The Moderne to break ground shortly thereafter.

Related Articles:

Moderne loans win full council approval – Journal Sentinel
Milwaukee council approves loans for The Moderne – BizTimes.com
Milwaukee council approves Moderne loan – Daily Reporter

Rocky Marcoux, the Commissioner of the Department of City Development, explained that similar rental units in Milwaukee have an occupancy rate of 97 to 98% and that “we believe the current credit crunch necessitates a short term change in policy,” indicating that generally DCD wouldn’t support this type of city financing for residential units, but that on a limited scale during this time in the market it was open to funding a few projects.  He added that “I believe it will jump start the west end of the Park East.”

It came out during the meeting that Phase II of The North End project would likely be seeking some sort of city assistance as well, and that the city believed the three projects, The Moderne, the Bookends, and Phase II of the North End could receive city assistance as multiple market studies indicated a demand of approximately 600 of these type of units in the near downtown area.

Alderman Bauman explained his point of view saying that “this is a highly risky project, everybody understands this,” then added that “this is basically a stimulus project.”  He indicated that if the developer could secure his personal guarantee then he would be open to the project.  Alderman Wade stated “I have some issues with participation,” referring to the RPP levels proposed for the projects.  Alderman Witkowiak stated that “in my case I’m looking for the personal guarantees to be shored up a little bit,” but added that “the benefits of doing this project, far far outweigh the risks.”

The Committee generally indicated that the primary issues revolved around the better defining of the default clause, securing the developer’s personal guarantee, and improving the RPP numbers.  The project was held until by the Committee, until a special meeting immediately prior to the November 3rd Common Council meeting, with the intention that these three main issues could be resolved, and the project could possibly receive approval.

A rendering of the Moderne

The Moderne, the long awaited project on the corner of 3rd and Juneau, is moving ahead.  The City, through RACM, is aiming to provide $10,000,000 in financial assistance to the project.  A deal that is very likely to be approved.  The building is to be largely an apartment building with first floor retail and a few condos at the top three floors.  Originally intended to be 80 condos, the project is now 154 apartments and 33 condos spread over 30 floors.

To demonstrate how long the project has been in the works, it won zoning approval in 2007.

Developer Rick Barrett reported that he had a difficult time finding financing, stating that he had talked to hundreds of banks.  It’s no secret why that might have been, with hundreds of units available on the condo market in Milwaukee (largely collected in a few buildings) and commercial real estate lending virtually non-existent as the economy falters.

Arguments have been put forth by aldermen that the Council should look at providing more aggressive financing for projects to ensure that the Milwaukee tax base continues to grow with no gap after the recession ends and that more jobs are maintained in the meantime.  The proposal to finance The Moderne seems to be a manifestation of that thought, with the knowledge that even if construction were to start today it wouldn’t end until 2011, when hopefully the recession is a fading memory.

The project will easily be one of the most dense buildings in Westown, with its good urban design and small footprint.  As a comparison, The Palomar, which was proposed just across the street, was to occupy an entire city block.  The Moderne will occupy a small plot of land next to Vecchio Bar and Grille.  Hopefully it can serve as a catalytic project to spur more quality urban development in the Park East and Westown.