Milwaukee Proposes Subsidy For Downtown Office Tower Conversion

100 East tower. Photo by Jeramey Jannene.

One of Milwaukee’s tallest buildings would benefit from a city subsidy in its conversion from office to residential usage.

The Department of City Development announced Wednesday that it is proposing a $14.4 million subsidy to advance the $165 million of the 35-story 100 East tower.

The building, which entered foreclosure in 2021 and is now almost entirely vacant, would be converted to 373 residential units. As part of the city subsidy, 75 of the units would be set aside at below-market rates for households earning no more than the county median income.

The proposal, and a second one for Martin Luther King Jr. Drive, are the first proposals DCD is bringing forward under its new tax incremental financing (TIF) guidelines.

“I want quality, affordable homes for people in Milwaukee. And my administration is advancing that goal with thoughtful investments in new housing options,” said Mayor Cavalier Johnson in a statement. “As our city’s population grows, I want current residents and new residents to have reasonably priced living alternatives in neighborhoods all across Milwaukee.”

“We want to grow Milwaukee in a way that ensures it remains affordable and accessible to all,” said DCD Commissioner Lafayette Crump. “By leveraging tools like [TIFs], we are building both housing and new opportunities. These projects reflect our commitment to creative and quality development, and underscore the work being done every day to make stable and desirable housing available to all Milwaukeeans.”

The 100 East development, being advanced by a partnership of Klein Development and Johnny Vassallo, received a key approval last November when it was designated as historic by the state. The designation unlocks access to historic preservation tax credits, which would cover up to 40% of the cost of making historically-sensitive renovations to the 435,437-square-foot building. The tower was built in 1989.

“This investment demonstrates that the City of Milwaukee is ahead of the curve nationally when it comes to recognizing the need to get creative and find a solution to repurpose obsolete buildings,” said Vassallo in a statement. “Transforming this building into housing reflects a broader vision of how cities can grow thoughtfully. This development would not be possible without the city’s leadership and commitment to the future of downtown Milwaukee. By supporting projects like this, the city sets the tone for what a vibrant city can be.”

The proposal, and a similar one for King Drive, are subject to Common Council approval. But area council members Robert Bauman and Milele A. Coggs, two influential council members, both praised the announcements in DCD’s press release.

The city is relying on developer-financed TIF districts, effectively a property tax rebate. The developer must provide the equity to complete the development and then is paid the subsidy only if incremental property tax revenue from the project exceeds the TIF’s base level within a set period of years.

Compass Lofts Project Also Being Advanced

A second project that would be aided by a city subsidy has also been on the drawing boards for several years.

In a much more traditional aid package, the city would provide $1.37 million to advance the $19.8 million redevelopment of the city-owned site at 3116 N. Martin Luther King Jr. Dr. Fifty-six of the 67 units in the new building, known as Compass Lofts, would be set aside at below-market rates to qualifying households making no more than 80% of the county median income.

The project is to be primarily financed by low-income housing tax credits, which the development team has already secured from the Wisconsin Housing and Economic Development Authority. The credits require specific units to be set aside at rates targeted at 30% of a household’s income.

Compass Lofts is being developed by a partnership of Martin Luther King Economic Development Corporation (MLKEDC), EA Development, One 5 Olive and KG Development. Abacus Architects is leading the design. The city selected the development team as a winner of a competitive request-for-proposals process in 2023.

“Compass Lofts reflects our longstanding partnership with the City of Milwaukee to continue the vision of bringing economic development along King Drive,” said MLKEDC Executive Director Nicole Robbins. “Creating affordable housing is not only important, it is essential. Projects like this are a positive step forward and continue the momentum for a thriving neighborhood.”

100 East Renderings

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100 East Photos

Compass Lofts Renderings

Compass Lofts Existing Site

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