Developer Assembling Land for Ikon Hotel
Kalan Haywood confirms hotel won't be open by DNC.
Developer Kalan Haywood is lining up the property needed to complete the One MKE Plaza – Ikon Hotel project in the former Sears department store at W. North Ave. and W. Fond du Lac Ave.
The developer secured Common Council approval last week to purchase two parcels (2202-18 W. North Ave. and 2228 W. North Ave) from the city and Monday afternoon the City Plan Commission recommended vacating the alley that separates the former Sears from its parking lot.
The Haywood Group intends to ultimately construct a 24,000-square-foot conference center, attached to the former department store, on the land facing W. North Ave. The former Sears, closed for over 30 years, would be converted into the Ikon Hotel, an 80-room hotel. A co-working space and business incubator is planned for the remaining space in the building.
That figure is based on the city’s infrastructure costs to reconfigure the alley to serve only the parcels at the northeast corner of the block. Haywood’s firm has already deposited the funds to acquire the sliver of land. “It’s just one of the many pieces we must get in place for the development,” said Haywood.
The city has committed $9 million to the $36 million project from a tax-incremental financing district. In May it approved $4 million including $2 million to support pre-demolition work and Haywood’s refinancing of a $2 million loan to purchase the department store property. Last week, despite objections from four of its members, the Common Council approved an additional $5 million to close a financing gap. Those funds would only be released if Haywood secures $15.5 million from a bank loan and Opportunity Zone equity investors. The project also relies on the use of historic preservation tax credits, PACE financing for energy efficiency improvements and a deferred developer fee.
When the project was first announced it was a long shot to be completed in time for the July 2020 Democratic National Convention, but Haywood confirmed Monday he was no longer pushing for that goal.
“Even though we would love the boost of the DNC and being open, our idea and our intent is to have this project be here for 150, 200 years,” said Haywood. “We are thinking we will have this total project completed by spring 2021.”
JCP Construction is on-site currently removing asbestos and doing other interior demolition work in advance of starting construction.
The alley vacation must next be approved by the Common Council.
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Related Legislation: File 190523
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Read more about One MKE Plaza project here