City Wins $15 Million To Demolish Northridge, But Still Must Prevail In Court

Northridge Mall in August 2022. Photo by Jeramey Jannene.

Milwaukee secured a major piece of funding to demolish Northridge Mall Friday, but spending the money continues to require the city to prevail in court.

Governor Tony Evers announced a $15 million grant from the state’s American Rescue Plan Act (ARPA) grant Friday that would fund the city’s demolition costs.

“This grant is only the latest example of how we are connecting the dots with our local and federal partners and working to build stronger, safer, and more prosperous communities across Wisconsin,” said Evers in a statement. “This project will remove a blighted property, address safety hazards, and clear the way for the site to be redeveloped into a significant asset for the community, bolstering growth and development for Milwaukee and our state.”

In its now multi-year legal battle to see the vacant mall redeveloped, the city has sought to have property owner U.S. Black Spruce Enterprise Group, a Chinese firm, demolish the building. But, in January, the city switched gears and asked Judge William Sosnay to drop the fines in exchange for giving the city the property. City officials said they had identified a funding source to cover the estimated $15 million cost to clear the 46.5-acre property.

The description of the funds indicated it was likely an ARPA award from the state’s federal grant, but Friday’s announcement is the first official confirmation.

“I greatly appreciate the governor’s allocation of resources to address this significant problem,” said Mayor Cavalier Johnson. “The property is a danger to our firefighters and trespassers. It is a deteriorating building that drags down the surrounding neighborhood. I look forward to finally solving the safety and blight issues associated with this property.”

But the city must still prevail in court.

The legal case appears to hinge on a pending appeals court ruling. According to online court records, each party submitted its briefs by Aug. 16, but the matter is still “awaiting assignment.” On Sept. 2, Sosnay said he is prepared to rule whenever that appeals court ruling comes down, but a Dec. 1 hearing was postponed to Jan. 17. Black Spruce is appealing Sosnay’s 2022 ruling that the city’s raze order for the approximately 900,000-square-foot complex is valid.

The mall, located near N. 76th Street and W. Brown Deer Road, closed in 2003 after 31 years of operation. A predecessor of Black Spruce acquired the property for $6 million in 2008. It has proposed creating an Asian marketplace, but those plans have never advanced.

More than a half million dollars in unpaid contempt fines have been levied against Black Spruce for its failure to comply with a 2019 agreement to secure the property. At least four fires took place at the mall in 2022 and it has been a target for trespassing.

The security incidents at the mall briefly stopped when warehousing specialist Phoenix Investors emerged in March as a potential buyer and secured the property. However, the company terminated a purchase agreement in July and, in doing so, halted the security and maintenance efforts it had undertaken. A fire requiring a Milwaukee Fire Department response occurred in November, and the department said firefighters observed “indications of as many as six other recently set fires.”

City officials opposed Phoenix’s plans. Phoenix wanted the city to forgive delinquent property taxes and fines, drop the long-standing raze order and issue a zoning change to allow a “mega indoor warehouse storage facility,” said Department of City Development deputy commissioner Vanessa Koster at a June 20 court hearing. Its proposal would have maintained the mall structure, while the city has favored redeveloping the much larger property to create more jobs.

The city would typically use tax incremental financing to redevelop such a large, blighted site, but the federal grant eliminates local borrowing costs and the substantial risk of future development not materializing quickly enough to pay off the demolition costs.

Evers, through federal law, has unilateral authority to allocate the multi-billion-dollar federal grant. He has also recently used it to partially fund the Iron District soccer stadium and Bronzeville Arts Center and has made several other grants focused on reckless driving, small business development and violence prevention. ARPA funds must be allocated by the end of 2024 and spent by the end of 2026.

MFD Photos of November 2023 Fire

August 2022 Photos

April 2019 Photos