Old Sears Building to Become New Hotel
80-room Ikon Hotel and 24,600-square-foot conference center planned for 21st and North.
The hotel, to be known as the Ikon Hotel, would be attached to a 24,600-square-foot conference center. Haywood hopes to begin construction later this spring, with a chance to open the hotel in time for the Democratic National Convention. A co-working space and apartment complex are planned for future phases of the project, which the Haywood Group is calling “One MKE Plaza.”
The city will support the project’s first phase through a tax-incremental financing (TIF) district. An initial loan of $4 million will be used to support site preparation work, including absestos abatement, and repayment of a loan used to purchase the building.
The Haywood Group acquired the building, and the 6.2-acre lot on which it sits, through an affiliate for $1.5 million in 2018. Financing for the purchase included a bridge loan from the Milwaukee Economic Development Corporation, which would be paid back by the TIF district.
Haywood said his firm was drawn to the project by its potential to extend the vibrancy of downtown into the surrounding neighborhoods. The developer, who quickly noted that the development was just four stoplights — or three minutes, 13 seconds of drive time — away from Fiserv Forum, said the location is primed for redevelopment. “It’s historic. People know it. We don’t have to explain the location,” said Haywood.
The developer told Urban Milwaukee that negative stereotypes of the area wouldn’t be a factor, because many guests coming from out of town don’t have those misconceptions. “That’s my job, to make sure that the perception of not being safe is inaccurate,” said Alderman Russell W. Stamper, II. “This community is full of residents that are involved, crime is on the low and investment is on the high.” The city has invested in a number of nearby projects in recent years, including the expansion of the Fondy Market, construction of Legacy Lofts and development of the St. Ann Center. Stamper said he has been working with DCD for three years to redevelop the site, with Haywood’s firm joining the project in the past year.
Marcoux and Stamper said the meeting space in the conference center would create a space for large events outside of a church, something Marcoux said the northwest side lacks.
The Haywood Group would contract with an Illinois-based hotel operator which already has a presence in Milwaukee to manage the hotel. The developer is working with Engberg Anderson Architects on the building’s design and has selected JCP Construction to serve as the general contractor.
The three-story building, built in 1928, contains 211,298 square feet of space according to city assessment records. In recent years the first floor has been used as the Milwaukee Mall, a marketplace for small vendors.
In addition to the city funds, the financing for the project will rely on a mix of federal and state Historic Preservation Tax Credits and New Market Tax Credits. The project is also within the boundary of one of the newly-created federal Opportunity Zones. Federal income taxes can be deferred or avoided by investing in job-creating projects in such districts.
Marcoux said that he anticipates an additional financing deal being struck later this year between the city and Haywood. The commissioner said the city would create a developer-financed TIF district to support the hotel’s buildout. Developer-financed districts place the risk on the developer by rebating a portion of the increased property tax payments over a fixed number years instead of providing cash upfront from the city.
Haywood Group recently completed the development of the first phase of its City Place development on the western edge of Halyard Park. The new apartment building includes 51 apartments, 43 of which are set aside for those making no more than 60 percent of the area’s median income.
In 2017, the firm opened the Germania Apartments downtown in the redeveloped Germania Building.
The co-working space, which would open shortly after the hotel, is intended to focus on entrepreneurs working in science, technology, education or mathematics (STEM) fields. Haywood said he’s working on making it the central space for such activity in the city and is working with Startup Milwaukee on the vision. “Milwaukee has yet to develop an inclusive hub for tech and startup activity and we want to be a part of any discussions about how to achieve this vision,” said Matt Cordio of Startup Milwaukee.
Housing would be built on the vacant land on the north side of the site. “We want to make sure this a 24-hour, live-work environment,” said Haywood.
Stamper is also excited about how the project will help the surrounding area. The alderman had a footnote added to the 2019 city budget that instructs the city to create a $500,000 fund to support nearby businesses in any TIF district created for the hotel project.
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More about the One MKE Plaza project
- Eyes on Milwaukee: Council Okays Subsidy for One MKE Plaza - Jeramey Jannene - May 7th, 2019
- Eyes on Milwaukee: Committee Okays City Funds for Ikon Hotel - Jeramey Jannene - Apr 30th, 2019
- Eyes on Milwaukee: 7 Takeaways From Ikon Hotel Deal - Jeramey Jannene - Mar 28th, 2019
- Eyes on Milwaukee: Old Sears Building to Become New Hotel - Jeramey Jannene - Mar 27th, 2019