Mitchell Street Redevelopment Must First Show Financing

A proposal to demolish a historically-protected building on Historic Mitchell Street and replace it with a four-story apartment building now comes with a contingency.

On Tuesday, the Milwaukee Common Council unanimously amended the pending approval for developer Zuwena Cotton to demolish the two-story building at 1101-1113 W. Historic Mitchell St. to require her to present “financing sufficient to complete the project as described” to the Department of City Development and Comptroller. It’s the first time the council has invoked the provision, which was added to the historic preservation ordinance as part of its 2012 overhaul.

The measure is intended to avoid a situation where Cotton would demolish the building, but fail to secure competitively-awarded low-income housing tax credits to develop a replacement building.

Cotton, a first-time developer, is seeking to develop a five-story, 55-unit apartment building that draws design inspiration from the Art Deco-style building she would demolish. Her new building is contingent on receiving the tax credits, awarded on an annual basis in the spring.

The property is part of the Mitchell Street Historic District, but area alderman and Common Council President Jose G. Perez told the Historic Preservation Commission and Zoning, Neighborhoods & Development Committee that he didn’t feel it was an integral part of the district worth saving.

“There are several buildings on Mitchell Street I wouldn’t even consider touching,” said Perez on Jan. 10. “This is one of those buildings that doesn’t meet the criteria of not considering razing and replacing it with something that could have a much greater impact.”

The commission, on a 4-3 vote, denied Cotton’s demolition request in December. But the council’s zoning committee, which under the city’s preservation ordinance has a wider latitude to consider economic factors, recommended the council overrule the commission and grant demolition approval.

Ald. Robert Bauman, who serves on the commission, initially supported Cotton’s demolition request and said he was doing so because of the strong endorsement of Perez. But on Jan. 10 he pushed to make sure Cotton wasn’t going to fail to secure financing and leave the site as a parking lot.

“I am not going to tear the building down and build new without financing,” said Cotton. “I don’t have plans on tearing the building down and just leaving it there.” She said it was a $14 million project, with demolition estimated to cost $500,000.

Bauman and Perez worked with the City Clerk’s Office between the Jan. 10 and 17 meetings to have the clause inserted.

“I can’t believe we haven’t come to this point before,” said Perez on Jan. 10. A year before Perez was elected in 2012, the council actually had. As part of a grand bargain to enable the development of the Milwaukee Marriott Downtown hotel, it added a voluntary agreement that required financing to be proven before demolition commenced. The ordinance revision that came a year later gave the historic commission an explicit lever to pull without the need for bargaining.

Perez said he was moved in part to support Cotton’s proposal because of its design.

The proposed new building, known as The Encore, is being designed by Barry C Yang. “The new design will be a combination of Art Deco and modern chic,” wrote Cotton in her November application. It would include a mix of studio, one, two and three-bedroom units.

Based on a drawing submitted to the commission, Cotton would also develop 11 townhouses on two nearby lots. Neither lot is within the historic district.

Cotton owns one of the lots, 1718-1734 S. 12th St., having acquired it alongside the Mitchell Street property. The other lot, 1747 S. 12th St., is owned by the city and would be sold to Cotton. The space behind the townhouses would be used as parking for the apartment building.

The Encore would include 18,130 square feet of commercial space on its first floor. Most of it, 10,000 square feet, would be reserved for a tenant in the existing building, Mitchell Beauty Supply Store. A “cornerstone” retail space, 2,700 square feet, would be targeted at a cafe. A 3,330-square-foot space would house a dance studio. The remaining 2,350-square-foot space would be used for a flexible space known as the Opportunity Center.

The current structure dates back to 1895 and was long a home for The Grand department store. It was remodeled in the 1930s to its current Art Deco appearance. A preservation report prepared by then-commission staffer Carlen Hatala says the building is an important piece of the history of the store, created by a Jewish immigrant and the first in the city to cater exclusively to women. It also notes the building’s role in the street’s former identity as the premier shopping area.

The department store closed in 1980 and the building has gone through foreclosure twice since then. It housed a Walgreens store for a period before the company constructed a new building. Cotton, citing an engineering report, argued the structure could not be repurposed, while commission staffers have argued that it could be rehabiliated, just not to Cotton’s desired use.

Cotton purchased the property in September 2020 for $350,000. “I got it at a really good price,” she told the commission.

A former educator, Cotton is the owner of local Amazon service delivery partner Legacy Transit. The contracted companies own and operate the vans and other vehicles that make deliveries for the online retailer. Cotton has also engaged in real estate investing.

Cotton is a graduate of the Associates in Commercial Real Estate (ACRE) program. ACRE is designed to train women and minorities for careers in real estate development.

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Related Legislation: File 221062