Reuse remains king in the city; urban areas remain active development spots
Downtown Milwaukee has seen significant investment in housing and high-tech office space as well as retail and commercial developments, Department of City Development spokesman John Bratina notes.
"Milwaukee has been successful in reusing its built environment. Many older buildings, warehouses and factories are highly conducive for high-tech business development. Over the past year, several buildings have attracted technology-based companies and investment," he said.
Notable developments include:
– The Blatz Warehouse on Market Street that now houses TCG Group, a subsidiary of AT&T.
– The Wells Building, located on East Wisconsin Avenue, houses numerous high-tech companies such as Colo.com, a California-based telecom company.
– The Dye House on East Buffalo Street has recently been sold to a Los Angeles real estate investor who specializes in leasing to data service providers and other high-tech firms.
– The C. Coakley Relocation System Building on South 2nd Street recently became home to Williams Communications.
While many new developments feature information infrastructure like redundant fiber optic suppliers, Bratina said that Milwaukee’s old-style architecture lends itself just as easily to high-tech uses.
"Milwaukee’s classic structures offer advantages to high-tech companies that aren’t available in new modern office towers and business parks," Bratina said. "These structures offer high ceilings that better accommodate telecom equipment, floors that can support more weight per square foot to handle switching equipment and, since these high-tech companies can ill-afford downtime during power failures, space for backup power supply systems.
"These physical characteristics are complemented by the fact that they are strategically located along underground fiber optic lines. Since most of these lines have originated in the downtown area, they provide the connectivity that is critical to high-tech companies."
The $170 million investment in the Midwest Express Center is also paying off for the city, Bratina said, as redevelopment spurred by the promise of increased convention traffic is revitalizing West Wisconsin Avenue, and has led to a 40% increase in hotel rooms in the area.
Riverworks works
Another redevelopment hotspot cited by Bratina is the Riverworks industrial corridor located along East Capitol Drive between the Humboldt Boulevard and I-43.
"The redevelopment of Riverworks began in 1993 when the Northeast Milwaukee Industrial Development Corp., in partnership with the City of Milwaukee and developer Wispark Corp., purchased the former AMC/Chrysler site and created a 33-acre business park," Bratina said. "To date, this public/private partnership has seen 31 of these 33 acres fully redeveloped, representing more than $25 million in new investment and creating or retaining nearly 900 jobs. Riverworks has landed new developments such as Production Stamping and Milwaukee Protective Covering. This year, the City of Milwaukee is expanding the TID to cover four additional parcels that have been targeted for redevelopment. It is expected that these four parcels will attract at least four companies and create more than 100 jobs in the near future."
And in Milwaukee’s industrial valley, redevelopment is taking on a mixed-use flair thanks, in part, to convenient T-1 Internet access.
The intersection of 6th and Canal streets in the Menomonee Valley sits between three emerging areas of Milwaukee, the Third Ward and the emerging neighborhood of Walker’s Point.
Once home to junkyards, bulk storage and other such uses, the east end of the Menomonee Valley promises to be a prime location for business expansion and development.
"In recent decades, the valley has been filled with degrading land uses and proven difficult to navigate," Bratina said. "The current reconstruction of the 6th Street viaduct will slope to the valley floor to form an at-grade intersection with Canal Street, the valley’s main thoroughfare. With this improved access, new development opportunities will be created. Zoning from the I-94 ‘high rise’ bridge to the ‘river’s end’ area to the east has been changed from manufacturing to mixed use. The valley’s land use plan envisions a mix of commercial and residential uses, with supporting retail along the 6th Street Viaduct."
Atlas Development Corp., which was responsible for The Tannery redevelopment at 6th and Virginia streets, recently purchased the vacant 17-acre Reed Street Yards on the other side of the viaduct. That, according to Bratina, will enable high-end development.
"Residential units could be coupled nicely with live-work opportunities, service businesses, ‘back office’ space and even high-tech manufacturing that could make use of T-1 lines buried along the adjacent railroad right-of-way," Bratina said.
Downtown Cudahy set for development
Just south of Milwaukee in Cudahy, spring construction is expected on a $9 million downtown redevelopment project. In addition to a new $3.2 million library in the 3500 block of Barnard Avenue and condominiums, the developer is examining the feasibility of several commercial buildings. The Lakeside Commons project will be designed to create not only a commercial redevelopment district, but also an area of residential development that can support the business base.
"In addition to residential condominiums, we’re building a library connected to condos by a winter garden – a 4,500-square-foot enclosed glass lobby," Paul Votto of Burke Properties said.
"It will connect the two buildings with a meeting/lobby area," Votto said. "That is all in the first phase, which encompasses the 72-unit condo, library and a series of for-sale town houses. On the commercial side, we are doing a feasibility market analysis for the development. We want to determine the marketability of two buildings that would be retail on the first floor and two or three stories of residential above on Packard Avenue. We are the ones doing the feasibility study. But first we are working with our architectural consultant, Engberg-Anderson Design Partnership, to prepare a conceptual plan for the building and the floor space.
"Then we’ll use that plan to do outreach to businesses – starting with those in the area including those who are already affected by the redevelopment. We’ll test the waters in the Cudahy business community itself to determine if there is sufficient demand to go forward with the first building.
"If there is sufficient demand, we would move forward with the first building. Our schedule has us beginning the outreach marketing in April of this year. Hopefully, we will determine the feasibility by the end of summer and determine if we’re going forward. Obviously if we get a strong indication of feasibility, we will move forward even more quickly."
Burke Properties is also involved in the new Cygnet Airport Center building on Pennsylvania Avenue in Mitchell International Business Park -on the east side of the airport.
"We just finished a 70,000-square-foot flex building – multi-tenant industrial building," Votto said. "We entered into a long-term lease for 58,000 square feet with a printing company – Wetzel Brothers, which is currently located in the Third Ward. They will be vacating that space and moving into this facility. There are just over 12,000 square feet remaining. The beauty of these flex buildings is that they are flexible. They could be a warehouse/distribution facility, office space or light industrial. The marketplace is driven by the airport, so naturally we’re talking to small delivery companies."
Design elements in the flex buildings include loading docks at the back, but also a high amount of glass and arch features, Votto said.
"This space can serve as an office, but can also be subdivided," Votto said. "The front can be office space and the back can be manufacturing or distribution. They are built with bays – typically 40 feet wide between columns. That means the space can be divided along those columns. Each section is about 6,000 square feet. That’s what makes it flexible. We can size the space to the needs of the customer."
Speculative coming to West Milwaukee
According to Scott Welsh of Inland Companies, Inland is also involved in a project just off of Miller Park Way and Mitchell Street in the village of West Milwaukee. The 45,000-square-foot office/warehouse/showroom is all speculative, and is being built for Real Estate Recycling, based in Minneapolis.
"We’re not necessarily going for the IT business on this project, but the neighborhood is a little more industrial, and we might get a more industrial type of user," Welsh said. "We hope to break ground in spring."
Inland is also working with Real Estate Recycling on a project near Mitchell International Airport in Milwaukee. The build-to-suit facility on the north side of the Airport Spur near 6th and Grange would be a 100,000-square-foot distribution facility. Start of construction will be market-driven, according to Welsh, and could be as early as fall of this year or as late as early 2002.
Dickman Company is involved in a 30,000-square-foot building in St. Francis, which is also driven by ready access to the airport.
"We’ve got industrial/office space – divisible down to 5,000 square feet," Sam Dickman said. "We’re going for people who service the airport – next to the Airport Spur and the Lake Park Arterial. Construction will start in March, and we’re expecting completion in July.
"We are providing parking for two cars per thousand square feet. That’s a lot for a building of this type. The building is tall enough to accommodate a crane in the building if necessary. One tenant we’re looking at needs it, so we may include one."
Dickman is also involved in a development in Oak Creek at the dead-end of Forest Hill Avenue.
"The building is now being constructed at Bell Court in Oak Creek – the project was undertaken on behalf of local investors. There are 6,000 square feet remaining out of 24,000 square feet. So far as tenants, we have Rehab Technologies and Hellmann Worldwide Distributors, Inc. This would be a good home for service-type guys who need warehouse/office space with a dock and a drive-in. We are currently pouring floor for Hellmann – the remaining space is not finished yet."
Franklin park does well
In the city of Franklin, the Franklin Business Park is about 80% sold out, according to Barry Chavin of MLG commercial. But there is still plenty of interesting development activity taking place there.
While a project under way in Franklin by Gleischman-Sumner Co. is not tremendously large, it should be of great interest to small businesses interested in having their own facility. According to Mark Sumner, Gleischman-Sumner created a division called GSSB, LLC, in order to help small business owners get into their own building.
"The idea behind the company is to make available to small business owners the ability to own their own building at a cost to them where their debt service for the project would be comparable to what they’d have to pay in rent," Sumner said.
The company acquired six acres in the Franklin Business Park and subdivided it into four parcels with a total of four buildings. One building is completed as a model and, according to Sumner, a company is already interested in purchasing that model. Construction will be initiated on the remaining buildings this spring.
"We built a city street called Airways Court that serves this four-building campus. We want to give small business owners the chance to build some equity, get some appreciation and enjoy the pride of ownership. Each lot will allow for future expansion space. Based on the people we’ve talked to, there’s nobody that doesn’t like it. We’re targeting anyone who currently is an office user who wants a full office buildout or a mixed-use partial office/partial warehouse or full warehouse. One potential user wants a showroom, a conference room and a warehouse.
"These are quality masonry buildings in any one of a number of material styles, atrium styles, and a choice of different entrances. We offer a full-service building program and arrange financing up to 100% for qualified credit. These buildings will run between 6,000-11,000 square feet. We did market research and no one else is doing it. We had an Internet search done, along with market research in several areas of the country and Wisconsin. Most real estate developers aren’t interested in this segment – they say they can’t make any money doing it. But this is a segment of the market that needs to be served – a segment that includes most of our office tenant companies."
GSSB is undertaking a similar project in Colorado, just south of Denver, Sumner said.
"In Colorado, they have a very cumbersome approval process," Sumner said. "We found it harder to get projects approved there. Something in Wisconsin that might take you 90-120 days could take a year there."
Gleischman-Sumner is also involved in more than 2.5 million square feet of tenant improvements, as well as other projects regionally.
"At the moment we’re working on a couple of build-to-suits that will roll out in the spring – in the city of Milwaukee and in Brookfield," Sumner said.
West Allis eyes big redevelopment
In West Allis, construction of a new village square, grocery store and hundreds of parking spaces in the Six Points/Farmers Market area could begin this year. The conceptual plan is aimed at spawning new retail business in a 44-acre TIF district along Greenfield and National avenues from about 62nd Street to 66th Street.
"The driving factors behind this project were lack of adequate parking and blighted buildings," John Stipl of the City of West Allis said. "The area was built in the 1900s before the automobile was a major factor in everybody’s lives. We need to revitalize all the deteriorated buildings, and also address the issue of inadequate parking."
Stipl said the city will purchase 38 properties, including some vacant lots, some older industrial buildings and some residences.
"This is the first phase of a four-phase project," Stipl said. "In order for the first phase of the project to begin, we need to wait for Pressed Steel to vacate its property, which should happen by early summer. The demolition of the building and environmental cleanup will commence. Jewel-Osco would then open by summer of 2002. The city is now acquiring additional land needed for this phase. This process will take 12 to 18 months."
The resulting development will be mixed-use in nature.
"To the south will be residential, condominiums," Stipl said. "To the east will be commercial and right at the Six Points intersection, we will acquire parking for the back of the commercial areas."
The project is bounded on the west by the Chicago and North Western railroad spur, on the north by Greenfield Avenue, on the east by 62nd Street a block north of National Avenue, on the south by Mitchell Street and West Lapham.
"The neighborhood needs revitalization. It has gone too long without new development. This is an opportunity to clean it up and bring new life to the commercial and retail businesses in the Six Points/Farmers Market neighborhood," Stipl said. "We have looked at commercial projects, we have looked at residential projects, and now this one. Of all the projects we looked at, this one gives us the most tax base."
Northwest side will get high-tech center
Inland Companies is acting as general contractor or construction manager on a number of projects in Milwaukee County, including a high-tech structure south of Milwaukee’s downtown. Just north of Park Place on the city’s far northwest side, Inland will start construction this spring on a building for Park Place Technology Company. The 186,000-square-foot office/showroom/warehouse project will take place in phases, according to Inland’s Welsh.
"The first phase, which will start construction this spring, will be a 67,600-square-foot building. The project is very close to the Park Place development, and is located off of Bradley and I-45," Welsh said. "We are technically not in the Park Place development – this will be its own little high-tech business park. The other two buildings will encompass the remaining space at 59,000 square feet each, with the construction timeline initiated by demand."
The high-tech business development is a category Welsh thinks will see increasing demand.
"We certainly think that there is a high-tech need. Our client is targeting firms like Time-Warner, GE Medical, M&I Data and Brady Corp. These types of companies are looking for that image, location and flexibility," Welsh said. "All have some relation to the Internet and the related technical component that’s important to today’s business. The project is not completely dependent on this sector, but the design of the building will appeal to these high-tech companies. People coming out of school with technical backgrounds want to be in decent buildings, and this desire is an important factor in building choice. The building is a tool to attract qualified job candidates."
Connectivity is a proven attractor for business, according to Welsh.
"One of our developments landed Time-Warner as a client in a very similar fashion," Welsh said. "Their facility is located a quarter mile away from a hub fireline. Being close to that fiberpoint was very important to them."
Capitol Court will completely change
One of the more interesting projects pending in Milwaukee County is the de-malling of Capitol Court. The shopping center opened in 1955, but had fallen on hard times recently. De-malling is a process used elsewhere in the country where mall developments are essentially turned inside out, creating outside frontages for stores.
The City of Milwaukee will contribute $4.5 million in improvements, including landscaping and the extension of West Hope Avenue, West Ely Place and North 56th Street into the de-malled center.
Mark Brickman, president of Polacheck Company, said work could start in the fall of this year on demolition and re-construction of Capitol Court.
"There will be quite a bit of additional retail space, which could be a supermarket and possibly a home improvement center, a number of outparcels and satellite retail," Brickman said. "The outparcels would be good for restaurants, maybe automotive or financial institutions. Satellite retail would be service stores, and maybe some of the retailers currently in Capitol Court would want to stay in the area."
Brickman said Polacheck is "talking with people right now. Some of the space will be committed before construction gets under way, but not all of it."
The most notable tenant of the de-malled development will be Wal-Mart.
Brickman said Polacheck is also involved in the rejuvenation of another older mall development – Point Loomis, at the juncture of South 27th Street and Loomis Road on Milwaukee’s south side.
"Renovation of the Point Loomis shopping center is expected to include a teardown of part of the shopping center and the addition of a new supermarket in its place. We can’t reveal who will be in there," Brickman said.
Just north of Point Loomis, a Wal-Mart store is under construction at the former site of another aging mall, Southgate. The store is expected to be open by press time.
