Michael Horne
The Roundup

Lame Duck Ruffles Feathers

By - Mar 22nd, 2004 12:00 pm
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If you think a shiny new hotel is just the thing for Wisconsin Avenue just across from the Midwest Airlines Center, you are not alone. Proposals to develop the site for that purpose date to at least 1998.

If you think that it is absolutely imperative the city give its approval to sell for $1 a two-acre lot at 401 West Wisconsin Avenue valued at $4 million so the six-story, 253-room hotel can be built, you are also not alone. In the past the Comptroller and the Assessor have approved such a sale to the same organization that plans to build the new hotel.

But if you think it is absolutely imperative that approval of the $1 sale take place before the new Mayor and new Common Council take office – that it be approved while the downtown 4th district is still without an alderman, then you are probably Suzanne Breier, the 14th district lame duck alderman who has demanded a special Common Council meeting at the end of this month just to make it so.

If Ald. Breier had worked equally hard on development issues during her 12-year term on her own district, then downtown Bay View would have a whole new look by now.

What is particularly curious about the March 16th Zoning and Neighborhood Development meeting that discussed the proposal by Hunzinger Construction, doing business as Milwaukee Convention Center Hotel, LLC., is that the city – particularly the Department of City Development – failed to follow its own rules regarding the awarding of subsidies to developers. This is a curious omission that drew the ire of the ordinarily ireproof comptroller, W. Martin “Wally” Morics.

The protocol, in such instances, is that the City Comptroller issue his opinion on “the likely success of the project and the necessity of the above taxpayer subsidy to the developer,” according to a letter signed by Deputy Comptroller Michael J. Daun.

Morics told the panel “this is the first time we have had a project before us without a comptroller’s fiscal study. We have had a protocol worked out for years,” he said about the notification process.

Michael “Wiz” Wisniewski of the Department of City Development explained, rather lamely, since the $1 sale to the same developer had been approved by the Comptroller in 1998, he figured a new study would not be required.

Morics did not respond to that statement with much more than a snort, whereupon Ald. Breier said that surely his office could prepare a complete fiscal impact study for the $30 million project within a few days.

Morics would not have his staff be rushed, necessitating the special meeting, to be held on March 31, just days before Breier would leave office, and before the downtown 4th aldermanic district would get its own alderman for the first time since Paul Henningsen went to prison last summer.

“This project has a lot of moving parts to it, “ Morics said, refusing to be rushed.

In an interview, Morics, who also serves on the Wisconsin Center District Board that regulates the Midwest Airlines Center, said, “if I put on my convention board hat, well, then, we certainly do need another hotel downtown, no question about it.” He said his study of the $1 property sale would focus on four questions – would the project happen without the subsidy? Is the subsidy too much, or too little? Is this the best deal for the city? Will it pay itself back?

According to Deputy Comptroller Daun’s letter, “Since the appraisal value of this property totals $4,000,000 the transfer price of $1 constitutes a major taxpayer subsidy to this project.” [Emphasis original – Ed.]

“… For projects involving such a substantial City subsidy, the Department of City Development normally provides the proposal with all supporting material to our Office at least three weeks before the project is to be considered by your Committee to allow us to review the project and report to your Committeee.

“In this case, due to an oversight by DCD, no materials were provided to us until we requested them upon our review of the ZND agenda yesterday [March 15th]. We therefore had no opportunity to provide your Committee with any independent examination of this proposal.”

A February 16th letter from Assessment Commissioner Mary Reavey to DCD Commissioner Patricia S. Algiers was not copied to other officials like the Comptroller, but Algiers sent it on to Wisniewski and to Gregory J. Shelko, Assistant Executive Director-Secretary of the Redevelopment Authority of the city of Milwaukee, the property’s owner.

Reavey’s analysis of the $1 sales price says “stabilized net operating income for this project is sufficient to support the development of $30,616,250 for the improvement” – that is the building itself. “However, there would be no residual net income to support an expenditure of the land. … Another observation is that the pro forma appears to be aggressive in terms of occupancy and revenue projections. These factors further support our conclusion that there is not sufficient net operating income to support land expenditure. … A 1998 Milwaukee feasibility study commissioned for this same site actually projected a higher net operating income. It was deemed at that time that a $1.00 land investment was justified. It would seem that the same market forces are in effect now.”

Once the hotel would be built, the land and improvements would be valued and taxed at full market value.

The 253-room hotel, which we will call the “Hunzinger Haus,” since it has no official name at this time, would be a “full-service, six-story, four-star hotel,” of 150,000 square feet, with approximately 6,600 square feet of meeting space, valet parking, a full-service destination restaurant, swimming pool, health club and “a full-service-business center.”

The question is, is this enough of a hotel for such a prime location on Milwaukee’s main street?

“I’d rather see a 500-room hotel,” said Ald. Bob Donovan. Such a size would put it on a par with the Milwaukee Hilton, the city’s largest, located immediately to the west.

The hotel is one of many projects that are coming up before various city committees, boards and commissions, as developers try to take advantage of the brief Pratt administration to push through projects that the Norquist administration would have not supported.

[Milwaukeeworld has asked Ald. Breier, via e-mail, for her reasons for so vigorously championing this project at the tail end of her career. We will carry her response if it arrives before her term expires.]

Tax-Free Housing for Wealthy: Alexian Village plans Suburban Haven for Elderly in City

Thirty-four acres of the Alexian Village senior housing complex at 9301 N. 76th Street will house 30 “cottages” according to a master plan for the facility dated January 29th. The City Plan Commission conditionally approved the development on March 8th. Each single-family cottage will have two bedrooms and an attached two-car garage with driveway space. (This is not your grandmother’s nursing home.) The cottages will be constructed “to respond to the growing, evolving marketplace demands in the senior retirement community housing market,” according to a proposal by Kahler Slater Architects. Among the evolving marketplace demands: tax-free living. According to Peter Weisenfluh, Deputy Commissioner of Assessments for the City of Milwaukee, these luxury units will be tax-exempt. His department has fought – unsuccessfully – to tax similar senior housing properties.

Bear in mind that these are not “nursing home” rooms, or hospice facilities for the infirm. Each will include a kitchen, baths, the aforementioned two-car garages – everything one would find in an upscale condominium development, except that they are single family (even better!) and tax exempt.

The development is another in a series of similar projects, including Eastcastle Place, marketed to wealthy suburbanites and empty-nesters. Unlike plans for the taxable Park East redevelopment, there seems to be no call that the facility include “affordable housing.”

The first phase of the development, approved during the Norquist administration, included quarters for the Alexian Brothers. Nobody really minds tax-exempt monks’ cells. But should taxpayers subsidize “individual homes in a secure, village-like and welcoming environment?” Should we permit “village-like” development in a city? Do we really need a development in the failed Northridge area that “will be compatible with the adjacent neighborhood?”

From the appearance of the plans, the development will be more suburban than “village” or “urban.” The new plan calls for culs de sac, winding roads, and an arrangement of the housing units in that goofy, staggered fashion that characterizes subdivisions in the burbs. There is not a right angle in sight, and this in a city that is otherwise so proud of its grid.

Nobody will complain if members of the clergy inhabit tax-free housing (unless you’re trying to build a God-awful parsonage in River Hills); the infirm elderly and the soon-to-die, should also be given a tax break for their housing, which does not include fully-equipped kitchens and attached two-car garages. But all communities in the area should be concerned about the long-term consequences of permitting tax-free, luxury housing. Imagine the outcry if tax-free public housing for the needy were on the agenda.

Riemer: Walker Faces own Pension Mess

According to a St.Patrick’s Day statement by County Executive candidate David Riemer, “Scott Walker has a pension scandal of his own.”

According to Riemer, Walker pledged in 2002 that if elected, he would “require that any non-union employees under the control of the executive sign … a waiver [of all salary and benefit increases enacted after January 1 2000] as a condition of their continued employment.”

Riemer says sixty-two county employees in so-called “at will” positions, under the control of the executive, have not signed pension waivers. He says the “poster boy” for the non-signers is Terry Kocourek, the head of the new Department of Parks and Public Infrastructure. According to Riemer campaign consultant Bill Christofferson, “as budget director during the pension mess, he arguably should have known about it. He and his wife were huge beneficiaries. She has since retired as head of Information Technology for the county.”

I called Kocurek at home to confirm the Riemer campaign’s statement. “Yes, that’s true,” he said when asked if he had not signed the waiver. Why not? “Why don’t you call me at work,” he said. “I don’t want to answer that while I’m at home.”

Sell Off at Kohl’s: 6 Insiders Dump $37 Million Stock Last Week

Six insiders at Kohl’s Corporation, the Menomonee Falls-based retailer, have sold 726,809 shares of the firm within the last week or so, for a total of $37,572,801. During the same period only one insider purchased stock, for a total of $435,835 – quite a disparity. Kohl’s, once a darling of Wall Street, has not made its numbers lately, and has experienced personnel changes. These things make the big investors nervous, but to have 6 insiders sell such a large amount of stock is somewhat out of the ordinary. Only one firm reported a higher amount of insider sales during the same period. The Kohl’s $37 million figure was nearly twice that of the number three firm in the list of insider sales. The largest number of shares were sold by director John Herma, who offed 250,000 shares for a total of $13,120,000 on March 8th.

Don’t Upset the Vets: Wishy-washy County Board Does Not Rock Boat

Despite the urgent pleas in the final speech of Supervisor Sheila Aldrich, who has made the parks her priority during her soon-to-end career on the County Board, supervisors voted overwhelmingly to permit further discussion of the feasibility of berthing a 716 foot long 1948 warship at Veterans Park. The proposal, if successful, would bring the U.S.S. Des Moines, which has nothing to do with Milwaukee, to the lakefront where it would operate as a veterans’ memorial. Or would it operate as a Bed-and-Banquet? The vote of the supervisors showed that the board does not wish to tangle with veterans, a potent voting force. Many of the supervisors who voted to consider the plan probably did so with crossed fingers, since the likelihood that the supporters could raise the $20-30 million to refurbish the ship is mercifully slim.

The city of Duluth Minnesota, in a 1998 referendum, voted 60% to 40% against berthing the same ship in its harbor, one that is considerably larger and grittier than Milwaukee’s park-lined lakefront. The fact remains that the Great Lakes has not seen a maritime battle since the war of 1812; the ship is entirely irrelevant in this city, and other than its name it also has nothing to do with Des Moines, for that matter. The ship would mar the pristine lakefront of Milwaukee, where it is proposed to remain in perpetuity. It does not seem likely that we would be able to find a place to hide it down on Jones Island, or on the Menomonee River, either. It would be in our face all the time.

Preserve Our Parks, Inc. has sent a letter to parks supporters asking for their “urgent” help. Charles Kamps, President of Preserve Our Parks writes, “The hulking ship with its clutter of lights, signs, roads, utilities, garbage bins, bus turnaround, paving, parking, etc. would blight our lakefront. All supplies for the bed-and-banquet ship would need to be trucked through Veterans Park. … Our harbor would need to be dredged and a protective breakwater installed. The ship would need periodic drydocking. Costs? Staggering!

“The proponents claim this will serve as a memorial to veterans. Many veterans disagree. A true memorial is a peaceful reflective site, not an admission-charging ship catering to parties, weddings, special events, and overnight campouts for as many as 500 guests. Is that an appropriate memorial?”

Kamps suggests citizens contact County Executive Scott Walker (414 278-4211) or their County Supervisor (414 278-4222.) Please do!

More Public Art at the Airport

General Mitchell International Airport, our ambitiously-named transportation facility, is planning a new work of public art for the expanded Concourse C. Artist Carlos Alves has been selected to create “a dynamic, holistic space that is unlike any the users of GMIA have previously experienced,” according to Murph Burke, Chair of the Milwaukee County Art Committee. Alves plans a terrazzo floor with “a colorful abstract aerial view of Milwaukee and southeastern Wisconsin that will run the length of the entire concourse. It will be inset with hand made ceramic medallions depicting our area’s special places and activities.”

The work is expected to be completed in fall, 2005. Twelve of the ceramic medallions are available for sponsorship, at prices ranging from $13,000 to $28,000, according to Burke’s fundraising letter of March 2nd. But you better hurry and whip out that checkbook now – “medallions will be reserved in the order in which sponsorship payments are received. Please reply by March 31, 2004.” Thanks for the heads up!

More Interesting News: Wolves Return

The Science Times section of the New York Times carried a front-page story Tuesday, March 16th about the reintroduction of wolves in Wisconsin. The re-emergence of the wolves, now totaling nearly 350, has occurred since their disappearance in the 1960’s with little fanfare or attention, an expert says. Why? According to the article, “because the wolves conducted their own repopulation, public reaction had been largely favorable. No decision was needed to bring them back. They just came back.”

The state has a bounty program for livestock and domestic animals killed by wolves. In 2002, if your calf was killed, you’d get $602. If the big, bad wolf killed your hunting dog, you’d be eligible for up to $2,500.With that kind of payoff, I’m seriously thinking about getting a dog. … A $10 million reconstruction project along Clybourn Street between 10th Street and 16th Street is one of the largest construction contracts in Wisconsin for 2004. “It is, however, one of the smaller contracts tied to the Marquette Interchange project,” according to the state D.O.T. The Clybourn/Story Hill project is preparatory to the highway construction, and is mostly involved with underground utility relocation, including gas, steam, electric, cable TV, telephone, sewer, water, street lighting and traffic signals. Clybourn will be closed for much of the year. The construction is visible to lucky drivers stalled in traffic. … So the Milwaukee Bucks need a new arena. My suggestion? Send a letter to your Senator. See what he can do about it. … The Milwaukee Journal Sentinel, upset that the Doyle administration somehow managed to send over 100 boxes of Tommy Thompson’s papers to a pulp mill rather than to an archive, has suggested that Attorney General Peg Lautenschlager conduct an investigation into the matter. This will certainly increase her popularity with Governor Jim Doyle. Thompson’s spokespeople were quick to blame Doyle for the mistaken destruction, which seems a bit mean. I’m certain there are papers from his past Tommy would love to see destroyed. … SBC and other telecommunications companies are lobbying heavily in favor of SB272, a plan to limit local government activity in the construction of broadband networks. The lobbyists are attempting to dissuade the Pratt administration from allowing the city’s technology experts, like Randy Gschwind, from participating in studies of municipal broadband networks, like one sponsored by the National Science Foundation at UWM. Gschwind is the fellow who gave us the free Wi-Fi zones in the city. SBC is the outfit that would rather have us all pay for our internet, one account at a time.

A Strong Partner for Baird?

Robert W. Baird & Co. executives have been mum about a possible plan to merge the firm with Strong, and then to have the combined firm sold to either Nuveen Investments of Chicago, or Wells Fargo of San Francisco. Baird is a squeaky-clean old-line Milwaukee firm, and Strong, a bit more nouveau, (to say the least) has been up for grabs since the recent problems of its founder Dick Strong. Baird is among the largest of the regional New York Stock Exchange members, and recently bought much of its stock back from Northwestern Mutual so as to provide equity for its key executives and high-performing brokers. A sale or merger could provide a big payday for many at the firm.

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