Jeramey Jannene
Eyes on Milwaukee

Michels Groundbreaking Coming Soon

Company lining up permits for $100 million project to break ground by year's end.

By - Oct 31st, 2018 04:42 pm
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Michels office building in River 1. Rendering by Rinka Chung Architecture.

Michels office building in River 1. Rendering by Rinka Chung Architecture.

It’s full speed ahead on Michels Corp.‘s plan to build a new corporate campus on the north end of Bay View.

The infrastructure contractor hopes to break ground on the project’s $49 million first phase, located on approximately six acres at the northwest corner of N. 1st St. and W. Becher St., by the year’s end according to a company official.

The first phase, which would include an office building for the firm’s new infrastructure division, is planned to house 250 employees when it opens in 2020. Many of the positions in the 250-employee division will be in engineering or other highly-technical fields. “People that, quite frankly, are easier to recruit in Milwaukee than other places,” said firm Chief Legal Officer David Stegeman in September.

The fast-growing, privately-held firm is currently headquartered in rural Brownsville, just outside of Fond du Lac. Firm vice president Tim Michels said at the August project announcement that he envisions eventually having 800 employees at the site, known as R1VER, in addition to a hotel, apartment building and office space for additional tenants.

The first phase of the project includes an eight-story, 130,000-square-foot office building at the northwest corner of the site, a 500-stall, below-grade parking garage and a new Milwaukee RiverWalk segment as well as other publicly-accessible areas.

Michels plans to initially occupy the top three floors of the new building, designed to be highly visible from nearby Interstate 43/94, and lease out the remaining floors. Four additional buildings are planned for future phases of the project, as well as additional parking.

But Michels is already considering expanding the first building. Stegeman told the Common Council’s Zoning, Neighborhoods & Development Committee Tuesday that the firm could build a 180,000- to 200,000-square-foot building.

Stegeman was before the committee to secure approval to acquire a small sliver of city land at the southwest corner of the site. Department of City Development representative Alyssa Remington told the committee that the triangular site was acquired in 1965 as part of the construction of the Becher Street Bridge. “We feel that the better use for that property is going to be in the hands of the developer,” said Remington. The property is .066 acres according to a city land disposition report.

Michels won’t have to pay the city for the very small lot, according to the disposition report: “Due to the significant investment to be made by the developer, the city will convey the parcel at no charge, but the developer will be responsible for all out-of-pocket costs associated with the conveyance.”

The committee unanimously endorsed the deal. The transfer still requires the approval of the full Common Council.

Renderings

Site Photos

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TIF Still Pending

The biggest piece of the city’s share of the deal is still pending before the Common Council. An $8.1 million tax-incremental financing district is proposed by the Department of City Development. The Redevelopment Authority of the City of Milwaukee board has already approved the district.

Almost half of the funds from the district would be allocated towards the city’s 70 percent cost share of a 1,030-foot-long riverwalk segment. An additional $2.5 million would be spent rebuilding W. Becher St. The city would grant Michels $1 million for job creation.

Michels would receive the riverwalk and grant funds ($4.4 million plus interest) from the district as part of a developer-financed TIF where the property owner receives a portion of the increased property-tax revenue generated by the development. The tool allows the city to provide a subsidy to the developer at minimal to no risk, because the developer only receives the funds if the development increases property values. The company must create at least 250 jobs to receive the job creation portion of the funds.

A host of other small changes necessary to form the building site are also underway. Earlier this year the city approved vacating a segment of S. 2nd St. that didn’t really exist, but was listed in city documents.

A file is also pending before the Common Council to unify the five-parcel site into a single, large parcel. The unified parcel simplifies property management and allows for buildings to be built across property lines.

Michels has hired Rinka Chung Architecture to design the project and Gilbane Building Co. to construct the project’s first phase.

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