Dave Reid

No no no… No!

By - Mar 2nd, 2010 10:54 am
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Demolition

Demolition

Next Generation Real Estate Inc. recently proposed a $35 million 6-story mixed-use building with 130,000 square feet of class A office space, 270 parking spots, and 17,000 square feet of first floor retail at the southeast corner of Wisconsin Avenue and Broadway.  To accomplish this it would require the tearing down of 60% of the buildings on Broadway, and 90% of the buildings along E. Wisconsin Avenue.  A $35 million development is not something we would normally oppose, but this project is a non-starter.

It’s a non-starter for a variety of reasons.  This demolition would include at least four buildings with historic designation, some of which have received both local and national historic designation, but it isn’t as simple as to say that these buildings are historic and therefore shouldn ‘t be demolished.  Often hardship or deterioration is an unfortunate but acceptable reason for demolition, though in this case Next Generation Real Estate Inc. has been involved with these properties throughout much of their decline, so that hardship is at least partially self-inflicted.  Finally, the designation and history is an important factor, but it goes beyond that.  These buildings are part of the fabric of downtown Milwaukee.

Demolition of these buildings will remove an opportunity for Milwaukee to have another unique, vibrant, and urban street.  Just ten years ago the great buildings on Milwaukee St. sat nearly vacant, while today it has become one of Milwaukee’s great streets.  What would downtown look like had the buildings on Milwaukee St. been torn down?  Further from our memory, is that this almost happened to Brady St., and just what would the East Side be without Brady St.?  Thankfully, both Milwaukee St. and Brady St. were saved, and are now two of Milwaukee’s great streets.

Regardless of how this development plays out, the various scenarios don’t point to a positive outcome.  The worst case scenario is the project falls during apart during demolition leaving new surface parking lots or worse yet an empty pit, like the failed Terraces at River Bluff project at 1339 N Milwaukee St., right on the corner of Wisconsin Ave. and Broadway.  The best case scenario for this project brings a loss of history, uniqueness, and opportunity right in the heart of downtown Milwaukee.  Further, if this project were to move forward it might snap up the potential tenants that the Rainier Properties II LLC’s Park East office building proposal is attempting to sign.  This would be a significant loss for Milwaukee as the Park East proposal has a clear chance of catalyzing further development in the Park East, and fill in what is already vacant land, while adding new value to the city’s tax base instead of simply replacing what already exists.

Hopefully, Next Generation Real Estate Inc. will realize what they have, forget about these plans, and work with the city, much like Compass Properties did with the Historic First Wisconsin building, to obtain financial assistance so they can improve and rehab their existing buildings, bringing life back to Wisconsin Ave. and Broadway.

Categories: Real Estate

43 thoughts on “No no no… No!”

  1. @ Dave,
    I don’t usually like pointed posts, but this one is right on the money. It is absurd to be tearing down buildings with all the vacant land downtown. If we keep doing that we will just another anywhere USA city with no history. Using new buildings that enhance Milwaukee’s history and image by responding to their context, not destroying it, is where we need to go.

  2. Jim Tarantino says:

    What about building on the millions of sf of parking lots on Michigan? They’re closer to the on/off ramps of 94.

  3. spencer says:

    NEEDS TO BE STOPPED! What do we need to do to stop these developers from destroying these buildings. Can’t we write a letter to the historical society? If you get a chance pick up a book by H. Russell Zimmermann he is the best author to showcase all of milwaukees architecture.

  4. Tim says:

    I think they should do it, the city has to grow, plus 3 floors for downtown isnt much at all. Its helping to build the skyline, and bringing new safer buildings to the city. Lets me honest it is kind of an eye sore downtown with the way it looks anyways sure it is historic but lets be honest. Sometimes newer is better. Chicago wouldnt be the way it is today if it wasnt for tearing down older buildings.

  5. Sal says:

    Those buildings are an eyesore. I say tear them down. There is a big difference between antique and old. These buildings are old and frankly ugly. Milwaukee should welcome a developer whose project can actually have an impact on our downtown. One, it completely revitalizes Wisconsin Ave and two it helps connect downtown to the Third Ward. If anybody hasnt noticed Wisconsin Ave is almost entirely vacant. How many new class A office buildings have been built in Milwaukee in the last 20 years? This is a blessing for the city.

  6. Tim says:

    @Sal, I am happy to know someone is on the same page I am. Thanks!

  7. Jeramey Jannene says:

    @Sal

    Is it possible that the buildings are an eyesore because of the lack of maintenance and tenants? You could make Milwaukee Street look hideous pretty easily, simply quite spending anything to upkeep any of the buildings.

    What do you mean “welcome” in regards to the developer? They’ve already been here for years, owning those very buildings. They haven’t substantially invested in them in that time (compared to their peers on Milwaukee Street or Brady Street), and have failed to attract many tenants. Are those two things possibly related?

  8. Jeramey Jannene says:

    @Tim How much impact would a six-story building have on the skyline? How are the old buildings unsafe?

    In regards to Chicago, their situation is quite unique thanks to the fire.

    I will definitely agree with you that newer is sometimes better, but that doesn’t make an old building bad. What about this project for one of the many surface parking lots downtown?

  9. Sal says:

    @Jeramey

    Obviously you do not own commercial real estate. Milwaukee has a 25%
    or more vacancy rate for Class B and C office space. That means that nobody
    in their right mind would finance and/or invest in a speculative class B
    office project. Im assuming that the owners continuously try and attract
    tenants. So there has to be a reason they havent had any success. My guess
    is that the buildings are completely inefficient, cost too much to improve
    and have ZERO parking. I have an idea…all of you that want to save these
    god awful buildings and let our city continue to struggle should put your
    money together and make the owner an offer and you save them. Otherwise let
    progress take its course it is time for some serious change in that area.

  10. Jeramey Jannene says:

    @Sal Why does that situation you described as so dire work so well a block over on Milwaukee Street?

    If you look back at the Milwaukee Street district’s history you’ll find that the buildings were bought from someone who wanted to cash out as a group and subsequently parceled out to individual owners. It took someone in the middle to purchase the buildings and piece them out, that hasn’t happened on this site, at least not yet.

    This project is looking for a TIF, if I’m an alderman, I might look to improve a parking with TIF dollars before I razed a bunch of buildings to make way for one of barely more size. A TIF seems to make much more sense for the Rainer Properties project.

    I happen to believe if they brought their buildings to the Common Council for financial support via a small TIF for repairs (exactly what was done at 735 N Water, a building with no parking) that Alderman Bauman would go to bat to preserve the buildings. I don’t think there is any evidence that that has been tried for these buildings yet.

  11. Alex says:

    maybe some of the building should not be torn down but other really look ugly and old. We need to build big and modern buildings with glass and steel.

  12. Imani says:

    this corner clearly needs a facelift, it will only help support the downtown bid, not take away from it!

  13. David says:

    Clearly, most of you dont spend much time in downtown Milwaukee..First of all, why are some of you discussing building on parking lots? Hello..There is a parking shortage in Milwaukee..Maybe some “historic” parking structures should be built. I have worked on and around the block in question for 24 years..We have PLENTY of beautiful and historic buildings and I applaud the fact that icons like Chuck Engberg and others fought to keep “certain” buildings..Why? Because they were truly HISTORIC. These proposed buildings ARE NOT. They are just old eysores…And EMPTY. At some point whether it was a consious decison or not, there is a point of diminishing returns where a developer can’t afford the “charity” cases such as this and need to move forward. Dave…please..”part of the fabric of downtown”??? The truth is, it should be a higher priority to keep a premier address like E. Wisconsin looking sharp (and occupied) before we worry about the Park East corridor..And lastly, please Dave..Take a walk down Broadway as I do every day..It isn’t and will never be a Milwaukee St. or Brady St. I’m tired of hearing from the vocal minority of why NOT to do something downtown and then it dies..We all need to internalize that downtown Milwaukee is actually a fragile economic gem that is presently tetoring on the edge.

  14. Jeramey Jannene says:

    @David

    If you were to put this project on an equal sized plot of land that was currently a parking lot, you would end up with a net gain of parking stalls. There is a parking garage in the project.

    I’m curious to see if you can find any data that indicates if there is a parking shortage in downtown Milwaukee. Seems to me, as a downtown worker, there are places to park all over, they’re just not free.

  15. Dave Reid says:

    @David First, Other then living, working, and playing downtown, I guess maybe no I don’t spend enough time in my neighborhood.:) Secondly, I’ll point out the buildings in question are designated both locally and nationally as historic so it appears on a few levels these are in fact historic structures. Thirdly, people are discussion building on parking lots because downtown Milwaukee is massively overparked.

    Further it certainly won’t be Brady or Milwaukee St. if they demo these buildings, and that would be a shame as Broadway could be redone in likes of the streets around Pioneer Square in Seattle.

    Finally, I’m not sure if you’re new to the site if so welcome, but the vast majority of the time we are all for things getting things done, but this project is well… poor.

  16. David says:

    Jeramie & Dave..Regarding parking, it is simply a matter of supply and demand relative to pricing..In the areas where people WANT to park, it is all north of $100/mo. It has been our #1 hiring issue all along..If we are truly overparked, it would be half that. Additionally, we are talking EAST WISCONSIN AVENUE, not west Clybourn. Its a whole different market in my opinion..No one wants a view of the freeway either, so many of these areas simply arent “downtown” in the scheme of things. One only needs to look at the rent commanded to understand what IS and ISN’T desirable in downtown Milwaukee..Again, this is a prime address and a good opportunity for revitalizing the highest yield area of downtown. I’m sure they would be happy to sell it to someone that would like to rehab it…It’s simply not going to happen. Mark my words, if this isnt built, I will be staring at this “Historic” wreck 5 years from now….Or, perhaps parking free and paying LESS in Bishops Woods?

  17. Jeramey Jannene says:

    @David – How does The Loop in Chicago function? Your logic implies that parking costs would keep anyone from being able to hire anyone else.

    It is entirely possible the owner will do nothing, as that has visibly happened in the past. Streets where investment has happened, like Milwaukee Street, have managed to find economical use for historic buildings. Milwaukee Street is just across Wisconsin and functioning quite well.

    Even if they were to build this, parking would likely still cost near $100/month. It would only contribute to what you view as a “parking shortage”.

  18. John says:

    This project won’t get approved. There is no way the city will settle for a building so generic on its most
    important street. As for people saying there is not enough parking, you guys are seriously out of your mind.
    The reason so many people think Milwaukees downtown looks ugly is because of the over abundance of parking
    structures. Its like you cant walk one block without 2 parking structures uglying up the street.

    Let Milwaukee do whats best for Milwaukee and not the inhabitants of the suburbs to the north and west.

  19. MilwaukeeD says:

    David, you are saying that parking should be $50/month downtown? Shouldn’t the price for parking be closer to the actual cost to provide parking?

    Say you were to take out a 30-year mortgage to purchase a downtown structured parking space. Your typical space costs $25,000 to build (on the low end). Let’s say 5% interest. That means your monthly payments should be $134.21, not even including the cost of property taxes and maintenance. With those, you are easily approaching $200/space.

  20. Beria says:

    “Next Generation Real Estate Inc. has been involved with these properties throughout much of their decline.” I can hardly wait to see how long it takes these morons to run this proposal into ruins as well.

  21. J says:

    Just take a look at the rendering of the new structure in David’s link to Biztimes. It’s an uninspiring, squat little building that somehow still demands the demolition of most of the block at Wisconsin and Broadway.

    If Levine’s proposal were even a little more significant, then maybe it would merit the number of buildings he’d like to raze. The way it stands now however, it’ll just use up valuable land on Wisconsin Ave that deserves something much bigger and better.

  22. Jeff says:

    I’m not in love with those buildings–their historical significance is debatable, they’re not great architecture, and their small size is out of place on the main street of a major city. That said, tearing them down for a six-story building makes no sense. I know times are tough, but why are developers thinking so small? (Another example: the suburban-like Aloft Hotel.) This is a city that once built the third-tallest building in the country (City Hall); now–with some notable exceptions–developers no longer think big, they think “Green Bay.” Is the area’s risk-averse mind-set limiting the city’s potential?

  23. Nick Aster says:

    Great article! Pass it on to the JSOnline.

    I’m constantly amazed at the people who think there’s a parking shortage in Milwaukee. You’re being sarcastic right?

  24. Dave Reid says:

    @Nick I think that the commenter @David believes there is a shortage of parking in Milwaukee. But *I* (Dave Reid) definitely do not think that’s is the case at all. We are massively over parked.

  25. Chris says:

    Nice article and dead on. If this design wasn’t so completely generic, I may support the adaptive reuse of these buildings. However, this could be placed in Anywhere, USA and not miss a beat.

    I’ll second Nick’s comments… a parking shortage? I guess there’s a parking shortage if you’re expecting to drive your car directly to your desk.

  26. David says:

    A couple points for all of your youthful comments..I’m sorry I left out the work affordable in the parking discussion..I’m not arguing anything about capacity..I am simply trying to help everyone understand the problem (It’s called Economics) Parking is very tight in and around NICE buildings East of the river. I’ve parked in all of them..They are expensive and drive people to make alternate decisions regarding where they locate. Ponder my real life math..I have 50 spots at $100/mo.=$5000/mo…My rent is $15,000/ mo. Actual occupancy cost is now $20,000/mo…Yup..it drives up my cost to be here 33%..Putting it another way, my $18/ft rent is effectively $24/ft. This is what drives people to look outside the city.. The 3rd ward addressed this with a large public ramp..Still inconveint to many locations, but reasonable. If the flat lots to the south get taken, costs will increase. The agument that new buildings have lots in them is not valid because they get eaten up by the new tenants who get preference.

    Another important point to the New Generation property just for everyones info..They have only owned these buildings for a year..They are not the ones that let these buildings decline..They bought them on spec..They are now actually for sale..My suggestion to the historic building committees is: Find a buyer and restore them if that is your passion…And park 4 blocks away..Under the freeway?

  27. Jeramey Jannene says:

    @David – I don’t get your point as it applies to this project. The buildings have no parking right now, which is a huge problem in your mind. The new building will have parking, but it will cost an amount you appear to believe to be too significant.

    The Third Ward ramp still costs money. You have to pay to park in it (and the city had to spend a lot of money to build it).

    How does this apply to this project? You describe it as lose or lose situation.

  28. Dave Reid says:

    @David A couple things. All the information I have been provided is that they have been involved in these properties for longer than a year, though I will double check that tonight, and if need be I’ll make a correction. That said they purchased buildings that have been in a historic district since at least 5/1/1995 i.e they knew what they were getting in to.

    … youthful? ok sure I’ll take that:)

    As far as parking… I’ll chat more on that later.

  29. David says:

    Hi Jeramey..Yea I got off track on parking here..I was responding to someone way back suggesting building new buildings on existing flat lots rather than tearing down buildings.

    Dave..Regarding ownership..You should ask them..I know they owned it a long time ago (when it was fully rented out) then sold it…Then I believe they bought it back (or maybe “got” it back) But it is definitely on the market..I asked a broker friend about it and due to the condition buyers so far have had no interest…Its sad..its just going to sit and get worse..

    My point about the ramp in the 3rd ward is it is public (and subsidized) and is an economic stimulus of sorts to an area that truly DOES have a prking problem..It also creates price pressure on the private lots which is good.

  30. Aaron says:

    A majority of the buildings on Milwaukee St, Brady St, Third Ward, and Fifth Ward looked unappealing at one time. Now these are some of the most popular place to be in the city. Interesting that the some of most popular places to be in the city are in old buildings and districts. I am sure under the paint and facades is cream city brick. Just look directly next door to how well the building that houses the Johnson Bank looks today. I am all for progress but we need to continue to maintain a balance of old and new. There are many parking lots around the city that need to be developed and parking lost is usually included or more added in the development.

  31. Dave Reid says:

    @Aaron Exactly.

  32. Beria says:

    @David According to the City of Milwaukee, the buildings have had the same owner since 03/16/2007. That’s nearly three years, according to my math. From what Dave Reid says, it sounds like they have actually owned it longer.

  33. Tim says:

    @Everyone.. why do we all keep complaining about this? Its bringing newer buildings into the city. I am pretty sure we can all agree that the current buildings are not doing much for us. Admit it they are vacant and have been since I can remember. There is an ethnic food place in one of them.. do any of us ever see it busy? I sure do not.

    So why don’t we all just calm down and accept that people still want in Milwaukee enough to keep building downtown. Sure its no soaring skyscraper like everyone wants but its still something, and it is better then what we have.

  34. Dave Reid says:

    @Tim When I first moved to Milwaukee, Milwaukee Street had been vacant for years. Now, it is one the great blocks in Milwaukee. At one time a developer intended to bulldoze Brady St… Well we all know Brady St. Or how about the Third Ward, many of those sat vacant for periods of time.

    Have these buildings been vacant for awhile sure, but tearing them down is not the answer.

    Do I want to see new development in Milwaukee. Yes (and if you look through the old articles on UrbanMilwaukee.com I think that is clear). But sometimes a project is simply a poor one.

    Finally, I’d add you take that same building design, and move it to the surface lots nearby by, and I’m all for it, maybe even with a TIF (which I don’t know if anyone has noticed these folks are asking for on this project).

  35. I think everyone wants development downtown. The question is how do we develop in a way that is sustainable and catalyzes people to live and work downtown? That is what will spur other development, and the benefits that come with it. So 40 years from now we don’t have to talk about tearing down a 6 story glass box that now is an “eye soar” because it is out of style and is not proper for one of our “best” streets.

    Yes, at this point in time it might be better than what we have there. But is it the best we can do? I would have to say no. Right now, we need to get highest value out of everything we build and I don’t see tearing down buildings as the way to do that.

  36. Tim says:

    @Dave Reid,

    I really do see your point about vacant lots. Like I mean I would personally like to see this be put between the hilton and Grand ave. At least that is the first thing that poped into my head. But I don’t think that you can change the developers mind all that much. I guess what I am trying to get at is that something is better than nothing. Hes pouring money into Milwaukee.. its better then him just folding it in and saying forget about it.

  37. Dave Reid says:

    @Tim Of course you can’t tell a developer where xyz project goes, that’s just not how it works (do they own the property or not and so on).

    But in this case something is not better than nothing. Further, those are not the only two options. Drop rent rates, sell off individual buildings, utilize local, state, and federal tax credits for historic preservation, and yes work with the city to rehab these buildings. (just a couple of other options).

  38. Nick Aster says:

    The thing that’s important about those buildings is only partly that they’re historic – it’s that they are individualistic – this means that if and when shops and offices move in, they’ll function in a far more independent and democratic way than as tenants of a larger, more shopping-mall like building. That’s great for small business and creativity.

    Now, if the buildings in question are truly unsalvagable, then so be it, but it seems like these guys are not thinking very creatively.

  39. Paul Zirk says:

    There are a million surface lots in the city. Michigan basically alternates between garages and surface lots. Clybourn is a virtual wasteland. One could debate the historical value of the buildings in question, but the larger question should be why that particular location. I know the developer owns it, but there are are so many opportunities to develop other sites. If they are dead set on the current site, then maybe they need to reconsider a better design that integrates the historic buildings into a better design. There needs to be a line. There is so much empty space downtown for excellent modern glassy, metal, etc wonderful concepts that we should not have to sacrifice any historical buildings. To be honest, I think we could develop for possibly the rest of my lifetime before needing to tear down historic buildings for new.

  40. Peter says:

    I think a lot of people who are for this project don’t realize that the biggest problem with this project is that it lacks substantial size or architecture worthy of tearing down buildings that are so old. The point might less be that these buildings are so valuable in and of themselves, but that this new buildings does not justify tearing down the old ones when there is still so much vacant space downtown. This building,
    (http://www.emporis.com/application/?nav=building&lng=3&id=broadwaywisconsintower-milwaukee-wi-usa),
    as many would agree, would have been much more acceptable in going in at the current location, but it didn’t pass. Which is disappointing.

  41. Matt R says:

    These are all great comments. I agree with Peter’s last post. Providence has done a fantastic job of maintaining historic buildings with new development, and Milwaukee has the architecture to do the same thing.

    These comments should be made not only here, but directly to your alderman and the the mayor.

  42. Mitch says:

    Dave
    I know these buildings very well, having explored them, surveyed every square foot, researching and proposing facade renovations. With that said I also am strongly opposed to their destruction, but they also cannot continue to sit vacant. It might be possible to fill the lower floors, but many of the upper floors have sat empty for DECADES; some of the upper floors where abandoned in the fifties or sixties. They do not have parking and the costs of renovations and code upgrades are huge. The market that these buildings where created for simply no longer exists. We need to find a way to save not just important facades but great buildings as well.

  43. Matt says:

    I would seriously do a credit history check on the parties behind this before entering any venture with them.

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