New Development Boasts Tallest Building in Wisconsin

Marcus Center garage replacement complex. Rendering by MGA.

No one can ever accuse The Neutral Project of not thinking big.

The Madison-based real estate development firm is pursuing a $700 million, multi-building complex at the site of the Marcus Performing Arts Center parking structure, 1001 N. Water St, according to a press release by the City of Milwaukee.

The multi-building development would include what would become the tallest building in Wisconsin and also the tallest mass timber building in the world.

A rendering depicts three new structures, as well as another: the completion of The Neutral Project’s neighboring The Edison mass timber apartment tower. Construction is expected to begin on that 32-story building this year. Test piles are currently being driven for the building’s foundation.

The new complex would primarily be housing, but also include a hotel, office space, retail space and a replacement parking structure.

“Over several phases, the project could include up to 750 residential units, 190,000 square feet of office space, 40,000 square feet of retail space, 300 hotel rooms, 1,100 structured parking spaces, and public plazas/walkways,” says the press release.

“As Mayor, I have not been shy about my goal to grow our city’s population to one million Milwaukeeans,” said Mayor Cavalier Johnson. “To do that, we need to be aggressive and reach for new heights. This project will help us do just that, literally aiming to set local and global records, but just as importantly add density and activity to an underutilized City-controlled parcel in downtown Milwaukee. It also represents a forward-thinking Milwaukee, open to outside investment and ideas, and I thank The Neutral Project for their confidence in Milwaukee’s future.”

The city released a request for proposals last September to redevelop the 2.45-acre site and parking structure with a “landmark” development. The Neutral Project, which has pursued the neighboring project, The Edison at 1005 N. Edison St. since 2021, previously confirmed it bid on the parking structure site.

The Neutral Project is being granted a one-year exclusive right to negotiate, subject to Common Council approval. A final land sale would also need council approval.

“Neutral is thrilled to embark on exclusive negotiations with the City of Milwaukee,” said CPO Daniel Glaessl and CEO Nate Helbach of The Neutral Project in a statement. “We’ve meticulously assembled a team of international design leaders paired with local specialist consultants. This collaborative approach ensures we deliver an exceptional community-focused urban experience for this pivotal site in downtown Milwaukee. Our focus on vibrant urban activation aligns seamlessly with achieving internationally recognized sustainability certification Passive House and ILFI core, resulting in a low-carbon building. This project has the potential to position the Marcus Center as a groundbreaking model for sustainable development, not just in the United States, but on a global scale.”

The new complex would be designed by Michael Green Architecture (MGA) with support from HGA, Gehl People, CD Smith and Thornton Tomasetti.

The press release did not specify the height of the proposed buildings. The tallest mass timber building in the world, Ascent, is located in Milwaukee, but is expected to be eclipsed by a building under construction in Australia. The Australia building, a headquarters for Sydney-based Atlassian, would stand 600 feet tall, more than twice Ascent’s height.

The tallest building in Wisconsin, the U.S. Bank Center, is 601 feet high at 777 E. Wisconsin Ave. It has held the title since the 1970s.

The Neutral Project aims to eclipse the the Atlassian building and U.S. Bank Center with a new mass timber tower.

Mass timber is an engineered product made by combining layers of wood to create a strong, environmentally-friendly building material.

The Department of City Development, after this article was first published, said the central building is proposed to be 55 stories and 613 feet tall.

“This project is an opportunity to create a meaningful and valuable new center in Milwaukee that also advances important proven building technologies and designs for the future of humanity and our planet,” said MGA architect Michael Green. “It sets a benchmark for achieving urban density and affordability while aligning with our common goal of low-carbon solutions to reduce the significant impacts of our changing climate.”

The structure is owned by the city and leased to the nonprofit Marcus Performing Arts Center, which is located just across the street. A skywalk across E. State Street connects the two buildings. The parking structure opened in 1970 and includes 690 spaces.

“We are incredibly excited about The Neutral Project’s transformative development of the Marcus Performing Arts Center parking garage,” said the arts center’s President and CEO Kevin Giglinto. “This project will not only activate this section of Water Street, but will also create a vibrant, dynamic neighborhood that benefits our patrons and the entire City of Milwaukee.”

The site was included as a catalytic site in the 2040 downtown plan, approved in 2023. The lease is currently due for renewal.

The Neutral Project meanwhile has a major project under way in Madison: construction has started on Bakers Place, a 206-unit, 14-story mass timber building.

Renderings

New Land Drops Out

Another developer has publicly confirmed they were one of three firms in the running for the site.

New Land Enterprises, which developed Ascent, also bid on the site.

The firm was still working with the city until voluntarily withdrawing its proposal Wednesday.

“We think that the process is so broken, not just with the RFP, but with economic development [with DCD] in general, that there was no way to negotiate a successful project,” said developer Tim Gokhman in a brief interview with Urban Milwaukee.

The city, according to emails received by Urban Milwaukee, sent out its press release awarding the deal to The Neutral Project less than one hour after Gokhman sent an email withdrawing.

“We did not make this decision lightly. New Land chose to respond to this RFP with optimism about the new administration’s vision for the city, with this critical development site serving as an example,” wrote Gokhman. “Unfortunately, after working with your department on this RFP and other economic development policies over the past year, we see that DCD’s actions are not matching the administration’s rhetoric.”

Gokhman said DCD handled the process similar to how former mayor Tom Barrett‘s administration did: “unprofessionally and inconsistently.” His letter to Department of City Development Commissioner Lafayette Crump said the process following an interview has been “opaque and misleading.”

The developer did not disclose what his firm proposed.

“It also saddens me to withdraw on a personal note. New Land has dedicated itself to Milwaukee even as, over the last decade, most other developers have started to favor projects in the suburbs and neighboring cities,” wrote Gokhman, a Milwaukee resident. “While other communities are demonstrating what it means to be a business partner, the unspoken message being sent in Milwaukee is something much different. I hope you can effect serious changes soon. Without such changes, the city will continue to fail in reversing the population loss that has plagued our city for so long.”

The Edison Public Plazas Advance

On Tuesday, the Common Council’s Zoning, Neighborhoods & Development Committee approved a tax incremental financing (TIF) plan to cover the cost of developing two public plazas next to The Edison, a 383-unit development.

The Neutral Project will be required to maintain the plazas, which will be connected to the Milwaukee RiverWalk.

The $600,000 in funding would come from amending a TIF district associated with rehabilitating the CityCenter at 735 N Water Street. State law allows TIF districts to pay for public improvements within a half mile, and that district is now overperforming its associated debt costs.

The city has already approved leasing the sites to The Neutral Project.

In 2021, the council approved two 50-year, $1 leases for remnant public land abutting the tower site. The northern lease site, 1027 N. Edison St., will be reconfigured to link the riverwalk with the Highland Avenue pedestrian bridge. The much smaller southern parcel will be used as part of a sidewalk network to connect with the riverwalk.

The proposed building would include 6,312 square feet of commercial space, targeted at a restaurant and cafe.

As currently configured, increased tax revenue from The Edison would flow directly into the city’s general fund. The site was previously occupied by a one-story warehouse used by a wholesale florist.

The Edison Renderings

Parking Structure Photos

Marcus Center Site Price, Subsidy

The 2023 RFP said the city would not provide a subsidy for market-rate housing or a hotel. It also didn’t indicate exactly what the land would be sold for, but it suggested several million dollars.

“A December 2022 appraisal valued the property as a cleared development site at $6,375,000,” says the RFP. “The City’s goal is to maximize sale proceeds.” But there are at least two obstacles to the city receiving the full market-rate price: debt and demolitionh. The RFP notes that there is approximately $2.7 million in debt owed on prior repairs to the structure.

“Proposals should include creative solutions to satisfy that debt,” says the RFP. Additionally, the developer must pay to clear the site.

The wide variety of uses proposed by the Madison developer also appears to leave open the door to some level of TIF subsidy, be it for parking, office space or a public component.

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Related Legislation: File 240383