Meet HQ501

Just before Thanksgiving developer Scott Lurie, head of F Street Group, announced his plan to buy the mostly empty Assurant Health office building at 501 W. Michigan St. Now the public has a clearer vision of what Lurie intends to do with the property with a release of renderings from RINKA.

Lurie would add four stories to the top of the building that could contain a hotel and a large sign for a future office tenant. The remainder of the building would be maintained as office space. A large plaza would be replaced with a vehicle driveway.

The complex will be rebranded HQ501.

The five-story building, which includes an attached parking garage with more than 800 stalls, is the last mostly vacant, large office complex in Westown. It includes approximately 370,000 square feet of space according to city records. The building is currently assessed for $17.1 million.

An early 2019 listing for the property indicates that over 180,000 square feet of space could be added to the complex. The listing also says the property has been well maintained.

According to city records, the building was built on a 2.9-acre site in 1978. An 11-story sister building, located to the east, was vacant since Blue Cross Blue Shield left downtown in 2006. It was redeveloped into the 207-unit The Buckler apartment building in 2016. A tunnel connecting the two buildings was filled in as part of the apartment building’s construction.

Assurant shuttered its health insurance business in 2016, resulting in approximately 1,200 job losses in downtown Milwaukee and emptying almost all of the building Lurie will now acquire. The company’s parent has approximately 30 employees in the complex.

A sale price on the property has not been disclosed and the transaction has yet to close according to state records.

For more on the building’s history, see our December “What’s It Worth?” column by Michael Horne.

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A Building With A Steamship Buried Underneath It

It was once home to “the largest hardware store in the world” according to the April 1874 edition of The Milwaukee Monthly Magazine and soon it will be home to approximately 40 Milwaukeeans.

Joseph Property Development is gearing up to convert the former John Nazro & Co. building at 170 S. 2nd St. into a 40-unit apartment building with first-floor commercial space.

Built in 1873, the four-story structure was located near Milwaukee’s industrial heart at the time, a stone’s throw from a railroad depot, a number of other warehouses and lumber yards. But not long before that, the land was a marsh on the edge of navigable waters.

Twenty feet below the building, according to an 1874 report, the hull of the wrecked S.S. Cincinnati rests. The steamship had collided with the S.S. Milwaukie and was stripped for pieces before being dumped on what is today solid ground. But to create that ground, the ship had to have layers of oak ties laid atop it, mixed with layers of sand and cement. A three-layer stone foundation all but ensures that future residents won’t be able to actually see the ship their new home is built atop when they move into the complex in 2021.

With design support from Miller Architectural Group, Joseph will adaptively redevelop the Italianate building with the support of historic preservation tax credits. That includes restoring the facade, including the cast iron, first-floor storefront that has been covered over with drywall for years.

Residents will find a rooftop deck with views of both the Milwaukee and Menomonee rivers. Architect Brian Miller said the deck is being designed in accordance with National Park Service standards that govern the tax credits and won’t be visible from the street. Read more.

Bader Funds 40 New Homes in Harambee, 20 Critical Repairs

Bader Philanthropies decision to relocate to N. Martin Luther King Jr. Dr. continues to pay dividends for the Harambee neighborhood.

Foundation president Dan Bader announced a $1 million gift Thursday morning that will fund the construction of 40 new homes by Milwaukee Habitat for Humanity in the neighborhood and pay for critical repairs for on 20 more, targeted at allowing home owners to stay in their home.

The gift will build capacity for Habitat, allowing it to continue its effort to build or repair 100 homes in the city’s Midtown neighborhood while ramping up its Harambee revitalization campaign. In total the group expects to build, repair or rehabilitate 250 homes by 2023 in Midtown, Harambee and other north side neighborhoods as part of a $18 million campaign.

“We know that one in three Milwaukee renters are spending more than half their income on housing,” said Milwaukee Habitat executive director Brian Sonderman. “That’s unacceptable.” Read on.

Sam’s Place Takes Shape on King Drive

The former Merchant & Farmer’s State Bank in Harambee will soon be home to a cafe and medical office.

It’s yet another project Bader Philanthropies has underway to improve the health and wellness of the Harambee neighborhood and its residents.

The cafe will be known as Sam’s Place. It will be a jazz-infused coffeehouse intended to complement owner and jazz drummer Sam Belton‘s downtown coffeehouse CITY.NET Cafe (308 E. Wisconsin Ave). Both locations will serve food and coffee drinks from Belton’s Abyssina Coffee Roasters.

Holistic wellness provider Shalem Healing, which is currently located in Riverwest, will occupy the second floor. According to a September press release from Bader, the medical care provided by Shalem is at a reduced rate or sliding scale based on the patient’s income. Learn more.

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How Much Does It Cost To Design a High Rise?

The fact that a public entity is seeking to build a downtown high rise means that a number of otherwise private records are available for public review. One of those is the contract between the building’s architect, Korb + Associates Architects, and the Housing Authority of the City of Milwaukee (HACM).

HACM, through its development arm Travaux, announced in April it is seeking to build a mixed-use, 32-story tower on the parking lot and green space immediately south of its Convent Hill senior housing building at 455 E. Ogden Ave. The authority intends to leverage luxury apartments and 40,000 square feet of office space to subsidize affordable housing integrated throughout the building. The Common Council approved a zoning change for the $152 million project in July.

The HACM board approved a $257,080 payment on the first phase of a contract with Korb in October that will ultimately provide the firm and its subcontractors with $3.8 million throughout the building’s development. That amounts to 2.5 percent of the project’s costs, an amount that multiple architects contacted by Urban Milwaukee agreed was fair. “The fee is totally fair, if not low,” said one architect after reviewing the documents.

The project scope document defines Convent Hill South as a 33-story tower with up to 412 residential units, bigger than what was approved by the Common Council in July. A reportfrom Travaux senior vice president Scott Simon said Korb won the contract based on being the highest-scoring respondent to a 2018 request for qualifications (RFQ) and the award was being made as a “piggyback” from prior work related to that RFQ.

Included in the public contract documents are the billable rates for the various Korb employees working on the proposal, ranging from firm principal Jason Korb ($180 per hour) to project support staff ($50 per hour). In between are the billable rates for a host of different positions including managing architect ($140 per hour), project architect ($125 per hour), interior designer 1 ($125 per hour), drafting technician ($95 per hour), interior designer 2 ($80 per hour) and drafting technician 2 ($75). Korb is slated to receive just under $2.9 million (1.91 percent of the project budget) by the time of project completion.

Council Approves Revised Library Deal

Heading into its fourth year, the Milwaukee Public Library hopes a proposal to redevelop the Martin Luther King Library branch at 310 W. Locust St. can secure financing.

Young Development Group won a request for proposals to redevelop the library in December 2016. The firm, formed the same year by Lavelle Young, proposed to use federal New Market Tax Credits to finance a four-story building with three floors of apartments above a new library. But it failed to secure the necessary credits to advance the $15.6 million project.

A revised proposal, in partnership with Haywood Group, would have included the redevelopment of the adjacent Garfield Theatre, 2933-2957 N. Martin Luther King Jr. Dr. The library would have occupied a portion of the building’s first floor, with apartments above. A new building with apartments would have been developed on the site of the current library. But the Milwaukee Public Library Board of Trustees rejected the proposal due to concerns about the per-square-foot cost.

Now Young is partnering with General Capital Group to bring the project to fruition. The new plan includes a four-story building with 44 apartments above an approximately 17,000-square-foot library and 1,400 square feet of commercial space on the site of the current library. An additional five-story apartment building would be constructed at the north end of the block along W. Chambers St. The budget for the project is $28 million.

Construction Starts on Western Building Facility

Without great fanfare, construction is underway on a new warehouse and office building that will bring over 200 jobs to the city.

Western Building Products held a ceremonial groundbreaking in late November on its 326,619-square-foot building at 7007 N. 115th St. The employee-owned millwork distributor is relocating to the city from Wauwatosa as part of a long-term expansion plan. It could eventually construct an addition with 75,805 square feet of warehouse space.

The Common Council approved its final piece of the puzzle on Tuesday, approving a Certified Survey Map that merges parcels needed to form the 31-acre site and clarifies the boundaries of the N. 115th St. right of way.

The complex, which will house all of Western’s 208 employees when it opens in 2021, is being designed and built by Briohn Building Corporation on a site located between the Menomonee River and Interstate 41. Located just south of W. Good Hope Rd., the site has long been known as Joy Farms and was most recently rented by We Energies for equipment storage.

The city will provide $2.45 million via a tax incremental financing district. Those funds, effectively a property tax rebate, will offset the company’s cost in establishing sewer and water service on the site. The district would be developer financed, placing the risk on the developer. Under the deal the funds would be returned to the developer only after incremental property tax revenue is generated by Western Building Products’ development. The financing plan was approved in July.

Read more.

Can Downtown Boom Boost Poorer Areas?

“Since 2005, the tax base of downtown Milwaukee has doubled, it has increased 99.5 percent, while the rest of the city has grown by only 5.7 percent,” said Department of City Development (DCD) deputy commissioner Martha Brown during a presentation on equity strategies to the Common Council.

“What does that tell you?” asked Alderman Russell W. Stamper, II.

“It tells you that you’ve had a lot more investment downtown than you’ve had [in the central city],” said Brown.

“That’s the first point, that’s the obvious point, what else does it tell you,” Stamper asked.

“That’s what it tells me,” responded Brown.

“What it tells me we have had a lack of investment and a lack of attention to the central city. Significantly, that’s what it tells me,” said Stamper.

The amount of attention and funding available for projects beyond Downtown and the nearby neighborhoods has been a frequently referenced issue between members of the Common Council and DCD. The discussion works its way into virtually every city-subsidized project, including the proposed extension of The Hop, the development of Fiserv Forum and the Ikon Hotel deal.

The Common Council tasked Brown and DCD Commissioner Rocky Marcoux with compiling strategies to equitably distribute resources from Downtown to economically-challenged neighborhoods.

Learn what they came up with.

City Invests in 207 Affordable Homes

The city’s Housing Trust Fund, a 12-year-old city program, will provide $900,000 in capital to support developers creating 207 units of affordable housing.

The developers, who will pair the money with funds from other sources, will create housing for everyone from homeless veterans to low-income seniors.

“There is a very competitive application for these dollars,” said Alderman Michael Murphy, who has served as the program’s steward since its inception. He detailed the grant awards to the Common Council’s Zoning, Neighborhoods & Development Committee last week.

The winners include the Old Main Soldiers Home project (101 units, $225,000, Alexander Company & Housing Authority of the City of Milwaukee), Villard Commons (43 units, $315,000, Index Development Group & Brinshore Development), Milwaukee Habitat for Humanity (four new homes, 10 homes in need of critical repair, $50,000), a scattered-site project from Rebuilding Together Greater Milwaukee (critical repairs, accessibility rehabilitation concentrated on low-income zip codes, $175,0000) and the 37th Street School redevelopment (49 units, $135,000, Heartland Housing).

Read more.