Germania Building to Become Apartments
118-year-old building would be converted to 74 apartments at prominent downtown corner.
Another Westown building is slated to become apartments following the approval of tax credits for the project. The Germania Building at 135 W. Wells St., a classic old downtown building, will be converted from office space to 78-apartments by a partnership of the Endeavour Corp and the Vangard Group. The $14.1 million project will be financed in part by federal tax credits administered by the Wisconsin Housing and Economic Development Authority (WHEDA).
The tax credits are awarded on a competitive basis, with the bulk of awards being issued in April. The Germania Building did not receive credits at that point, but will in a special round to be announced today. The tax credits, which are often sold to other entities, require the developer to set aside a set percentage of the units for residents whose income does not exceed 60 percent of the area’s median income. Those restrictions expire after 30 years, at which point the building is open to conversion to fully market rate apartments. The Germania Building previously applied for $850,000 in tax credits (which can be sold for approximately two-thirds of their value) and in exchange will set aside 72 of the 78 units.
The building has listed on the National Register of Historic Places since 1983, as well as being historically designated by the City of Milwaukee this year (the national designation makes it eligible for the 40 percent historic preservation tax credits we’ve covered before). It remains to be seen if the developers intend to apply for those credits as well. Milwaukee-based Korb Tredo Architects will serve as the architect on the project, while the firm of Schnetzky & Liebert originally designed the building.
The property is currently owned by Equitable Bank following a foreclosure on real estate firm Bando/Chmura, which includes developer Sonny Bando (son of former Brewer Sal Bando) and former Packer tight end Mark Chmura. Bando/Chmura acquired the building in 2007 for $4 million, when it was reportedly 95 percent occupied. In 2013 it was reported the building was 80 percent leased (with it being 70 percent leased during the foreclosure process the year before). Endeavour and Vangard will acquire the property for $3 million. The building is assessed at $3,340,200 ($594,300 land, $2,807,700 improvements). Retail spaces in the Germania Building are currently occupied by Refuge Smoothie Cafe and Drench Fitness, both with addresses at 763 N. Plankinton Ave, as well as the U.S. Marketing Corporation, accessible off the building’s lobby.
Bando/Chmura also formerly owned the four-story, 153-year-old Iron Block Building, which was sold to Dental Associates following a dispute between Bando/Chmura and their lenders. Dental Associates undertook an extensive renovation process and relocated their headquarters from Wauwatosa to the building at the southeast corner of N. Water St. and E. Wisconsin Ave.
The project is yet another win for Downtown, which is seeing a number of major projects moving forward following the recession. The Germania project will have a number of positive side effects. The amount of vacant office space will drop. The number of Downtown residents will increase. The city’s tax base will increase. The west side of downtown, which has big attractions (arenas, convention center), will get another small scale project that will make it a more walkable and inviting area.
Following a 1:30 p.m. press conference today led by Vangard Group’s Kalan Haywood, more details about the project emerged. Lieutenant Governor Rebecca Kleefisch was on hand to award Haywood with $850,000 in tax credits and announce the 73 construction jobs the project is expected to provide. She noted that she looked forward to returning when the project is complete. Kalan Haywood expects the grand opening to come 18 months from now, with construction starting in January.
Vangard is the lead developer on the project now (they had previously been referred to as a consultant), with Endeavour still part of the effort in a role that is undefined according to Haywood. The size of the project is now 74 units, not 78 as was previously applied for. Vangard did not have the number of income-restricted units on hand. Haywood was quick to note that loved the location in the “heart of downtown.” He went on to note that part of the reason they chose the site was that the intersection it sits on was noted in the downtown plan as a target for redevelopment.
Vangard will leverage the building’s historic designation to apply for both state and federal historic preservation tax credits. The credits can total no more than 40% of the value of the project.
Parking for the project will be provided using 27 underground spaces currently in the building, as well as the lot behind the building that is owned by Zilber Property Group. Zilber serves as a mentor to Kalan Haywood.
During the announcement, Lieutenant Governor Kleefisch remarked “this is going to be one of the finest addresses in the city proper.” While this project is in a great, prominent location, it’s unlikely a low-income housing tax credit development will be able to fulfill that lofty goal.
Posner Building Now Under Construction
In May I reported on plans by HKS Holdings to buy and convert the almost entirely vacant Posner Building to apartments. Construction has recently started on that project which will add 105 apartments to Westown. The Posner Building was built in 1908.
The Posner Building is located at the northwest corner of W. Wisconsin Ave. and N. Plankinton Ave.
Other Area Projects
The Posner and Germnia projects are far from the only apartment projects in the area. A proposal to convert the former Blue Cross Blue Shield office building at 401 W. Michigan St. is still pending. Bear Development is converting a 57,000 square-foot office building at 701 W. Michigan St. to 50 apartments (8 market rate) using low-income housing tax credits. Gorman & Company is building 100 market-rate apartments (the Frederick Lofts) at The Brewery on the northeast corner of N. 9th Street. and W. Juneau Ave. And a proposal also was recently recommended for approval at the City Plan Commission for the market-rate conversion of another building at the southwest corner of N. 10th St. and W. Juneau Ave.
Also in the area, more and more proposals for a new arena to replace the BMO Harris Bradley Center continue to come forward. The latest by David Uihlein, whose mother donated the funds for the current arena, would place a new arena on W. Kilbourn Ave. The Shops of Grand Avenue is also scheduled to go up for auction on October 21st. Hotel developers Mark Flaherty and Ed Carow (developers of Aloft Hotel, the Milwaukee St. Marriott and proposed Westin at US Bank Center) are also working to acquire the Commerce Building at 744 N. 4th St. from the Zilber Property Group and convert it to a hotel.
Urban Milwaukee: The Store will once again be participating in Gallery Night & Day. On October 17th and 18th, the store will feature the fun of bicycling. Custom made bicycles will be on display as well as Milwaukee-themed bicycle clothing and bicycle art. A representative from Bublr Bikes will be on hand to demonstrate how to use the city’s new bicycle sharing system. Stop by on Friday the 17th from noon until 10 p.m. and Saturday from 11 a.m. until 4 p.m.