City Ditches $700 Million Plan, Wants New Developer For Marcus Center Garage

Marcus Center garage replacement complex. Rendering by MGA.

A proposal to build the tallest building in Milwaukee and the world’s tallest mass timber building has been scrapped.

The Department of City Development will seek a new partner for a city-owned, full-block site at 1001 N. Water St., where it wants a “landmark” development.

The move comes after the developer previously selected by DCD, Madison-based Neutral, encountered substantial financial issues with its neighboring Neutral Edison apartment tower. A $10 million construction lien was filed against the Edison project earlier this month.

“The City remains fully committed to advancing a vision that best serves our community’s long-term interests,” said DCD Commissioner Lafayette Crump in a statement. “Redevelopment of the site was identified in the City’s Connec+ing MKE Downtown Plan 2040 as a catalytic project and is important to the future success of downtown. We look forward to engaging new partners who share our goals for growth and adding density and vibrancy to this key site.”

DCD announced in July 2024 that Neutral was the winner of a 2023 request for proposals (RFP). The company, which then had no major completed projects, planned to develop a $700 million, three-phase complex on the site of the Marcus Center parking structure. The final phase called for a 55-story tower that would have been the state’s tallest building and the tallest mass timber building in the world.

“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,” said a 2024 press release.

Amid opposition from area Alderman Robert Bauman, the council never approved giving Neutral control of the site as DCD requested. Bauman expressed skepticism about the phased nature of the plan and that only three firms bid on the 2.45-acre site.

“People will kind of promise you anything upfront to get their hands on the land and then circumstances change, maybe beyond their control, and then we go to try to claw the land back and ‘oh sorry, we’re going to keep it,’” said Bauman in June. “So I’m very leery of phased deals.”

After CD Smith, the general contractor on Neutral’s 31-story building, walked off the job in September, Bauman introduced a council resolution to find a new developer for the neighboring, city-owned site.

On Friday, he expressed his satisfaction with DCD’s decision. “I’m not surprised,” Bauman told Urban Milwaukee when informed of DCD’s announcement. “That’s good news.”

DCD, which announced the change at 4 p.m. Friday, said it will “initiate the process of seeking new development partners.” The press release does not explicitly state that a new RFP will be issued.

The city could pick another existing bidder, though it’s not clear if either proposal is an option at this point. New Land Enterprises and developer Brandon Methu were the other bidders on the site. New Land Director Tim Gokhman, in July 2024, said his firm had withdrawn from the process.

The department’s decision to drop Neutral sidesteps a potential conflict between the council and administration. A pending council resolution scheduled for discussion at Tuesday’s Zoning, Neighborhoods & Development Committee meeting would order DCD to issue a new RFP.

DCD said it made the decision to seek a new developer “following discussions with representatives from Neutral.”

Crump, in October, said it was too soon to change developers on the site. At the time, he had proposed a maximum of six months.

And even with Neutral out of the picture on the Marcus Center site, the city may still find itself engaged with the stalled Neutral Edison building. The privately financed project includes no public money, but involves leasing city-owned land leasing city-owned land on each end for public plazas and leasing spaces in a city-owned parking structure. A now-blocked riverwalk segment is located next to the site, which is currently a fenced off mix of dirt, concrete and rebar.

The Marcus Center 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. In October, Marcus Center officials said capital investment would soon be needed to keep the structure operational. The 2023 RFP called for the development of the site to include parking for the Marcus Center.

2024 Renderings

Parking Structure Photos

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