Jeramey Jannene
Eyes on Milwaukee

The Couture Construction Begins May 5th

After years of delays, financing secured for complicated project to build 44-story lakefront tower.

By - May 3rd, 2021 01:18 pm
The Couture. Rendering by RINKA.

The Couture. Rendering by RINKA.

Construction on Milwaukee’s most anticipated real estate development will begin May 5th.

Barrett Lo Visionary Development closed Friday on a $104.7 million loan to support the development of The Couture. The approximately $190 million, 44-story tower will include 322 apartments and 40,000 square feet of commercial space.

The loan comes from Old National Bank. The U.S. Department of Housing and Urban Development is providing a guarantee on the loan.

“This is the largest FHA loan amount HUD has executed in the state of Wisconsin and the largest amount for HUD’s Midwest region since the year 2000,” said HUD spokesperson Gina Rodriguez on Monday.

First proposed in 2012, the building will be located on a 2.2-acre site at 909 E. Michigan St. near Milwaukee’s lakefront.

“We are thrilled to have closed on the site and to enable the Findorff team to begin construction work for the Couture, a transformational project for our community,” said developer Rick Barrett in a statement. “I want to thank the Department of Housing and Urban Development, the City of Milwaukee, Milwaukee County, and all of the partners who have worked so hard alongside us to ensure that this important project has been able to move forward.”

The tower is being designed by RINKA and will be constructed by J.H. Findorff & Son.

Initial site work will be underground, including construction of a multi-level parking structure, with vertical construction beginning in early 2022. The Downtown Transit Center previously occupied the site and was demolished in 2017.

Barrett, no relation to Mayor Tom Barrett, has struggled since 2018 to secure the necessary equity in a HUD-defined time window to access the federal loan guarantee. At the same time, construction costs have increased. Sources familiar with the project indicated that after a 2018 approval, the amount of equity required was effectively doubled.

Barrett Lo ultimately failed to meet a HUD deadline, letting the initial loan guarantee lapse. The company announced last June it had secured the necessary equity and was reapplying for the guarantee.

The delays have caused issues for the City of Milwaukee. A lakefront extension of The Hop streetcar line has been delayed for multiple years as it is to loop through the base of the building. As a result of the delay track abruptly terminates in the middle of the street on both E. Michigan St. and E. Clybourn St.

A $14.2 million federal grant from 2015 to partially fund the extension could need to be repaid if the line is not completed by summer 2022.

Earlier this year, the city approved a new agreement with Barrett Lo that has the developer and business partner Tan Lo personally guaranteeing the $1.41 million balance on the grant should it be clawed back. The structure creates a liability shield for project investors with the city also waving the right to pursue a claim against Barrett Lo or its investors for the full grant amount.

Barrett Lo must provide the city $100,000 to hire a consultant to monitor the developer’s progress in delivering the public transit concourse.

But an amendment to that liability shield caused an issue at City Hall. The Common Council added a $100,000 contribution by Barrett Lo to a new anti-displacement fund. City Attorney Tearman Spencer refused to sign the agreement, stating that he believed the council was overstepping its authority. A compromise was ultimately reached, with the money going into escrow and retired judge Chuck Kahn hired to determine the legality of the deal.

The city, through tax incremental financing, is providing $19.5 million to build the three-story transit concourse and relocate a sewer on the site at 909 E. Michigan St. The funds, plus interest, will be repaid through increased property tax revenue generated by the development.

Milwaukee County‘s East-West bus rapid transit line will also use the transit concourse. The county sold the site for $500,000 to Barrett Lo.

The streetcar and BRT lines will open in the concourse before the tower above it does. The building is to be completed by fall 2023. The first apartment units in the building will open before the building is completed.

Under the latest agreement, Barrett Lo must begin construction by July 1st. The developer has 42 months to complete the tower once construction starts.

Renderings

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