Some of the Milwaukee aldermen who voted against providing $41 million, most in the form of tax incremental financing (TIF), for the PabstCity project say they plan to vote in favor of providing $25 million in assistance, most in the form of TIF, for Manpower Inc.’s proposed new downtown corporate headquarters.
However, several other aldermen remain undecided about the project, saying they need more detailed information about the financing plan. Some of those undecided aldermen are also expressing concerns about the precedent that would be set by providing a large subsidy for a major office development.
Five aldermen said they plan to vote in favor of the Manpower subsidy or are leaning that way. Five others said they are undecided and five could not be reached for comment.
Manpower plans to move 900 employees from its offices in Glendale and Brookfield to the new $63 million, 290,000-square-foot building, which would be constructed by developer Gary Grunau on vacant land east of North Dr. Martin Luther King Drive and south of Cherry Street, along the banks of the Milwaukee River. Manpower says it plans to increase its workforce at the downtown facility to 1,200 in a few years.
The Manpower building would be part of Grunau’s RiverBend Place development, which would also include a $10 million remodeling of a former power plant to the south, creating 60,000 additional square feet of office space.
The Common Council is expected to vote on the project in March or April, said Common Council President Alderman Willie Hines.
Hines is one of the aldermen who voted against the TIF funding for the PabstCity project but is now supporting the TIF funding for the Manpower project.
Those aldermen say the Manpower project is a better deal for the city than PabstCity because it brings an established Fortune 500 company to downtown Milwaukee and a large number of well-paid employees.
By comparison, the proposed $41 million in city financing for the $317 million redevelopment of the former Pabst brewery into a complex of stores, office space, housing and entertainment venues was a risky investment for a project that may not have been successful over the long haul, those aldermen say.
"We’re looking at 1,200 or so jobs in the downtown area (with Manpower)," said Alderman Tony Zielinski, who opposed PabstCity, but supports the Manpower TIF. "I think that’s going to be important to help revitalize the downtown area and the surrounding neighborhoods. You’re looking at a guarantee of 1,200 jobs, a Fortune 500 company. The spin-off benefits to the downtown area are going to be far in excess of the $20 million plus of TIF money."
Having Manpower’s headquarters downtown would provide more customers to downtown stores and restaurants and could attract more residents to the downtown area, supporters say.
"The project makes financial sense for the city," Hines said. "The multiplier effect is tremendous. To be able to attract the corporate headquarters of an international Fortune 500 company to our downtown is a tremendous boost to Milwaukee and would be a tremendous boost to any city."
Alderman Robert Donovan and Alderman Terry Witkowski said they are leaning toward supporting the Manpower project.
"You’re sort of damned if you do and damned if you don’t," said Donovan, who changed his mind and voted against
PabstCity after receiving several phone calls from angry constituents. "I do think we need to bite the bullet and do some things to attract business to come into the city."
Witkowski wants to see the details of the proposal, but says he supports the project so far.
"The general concept of bringing a company back into Milwaukee with that many employees, I don’t think you can go wrong," he said.
The lobbyists who led the fight to derail the city financing for the PabstCity project are also gathering opposition to the Manpower TIF. The Manpower TIF would pay for construction of a parking structure, allowing Manpower employees to park for free.
"City taxpayers and downtown office workers are incensed when told of the free parking for Manpower executives," said Craig Peterson, the owner of Zigman Joseph Stephenson, who is leading the Manpower opposition.
However, the city needs to help pay for parking facilities to attract new office developments to downtown, some commercial real estate professionals say.
Unlike the downtown residential market, which is booming, the downtown office market remains weak. Several downtown office buildings are trying to fill vacancies. Residential projects are being built downtown without subsidies because an increasing number of empty nesters and young professionals are attracted to the excitement of downtown living.
The downtown office market is at a significant disadvantage when compared with the suburban office market. Land costs more downtown. Plus, because of urban density downtown, large downtown office buildings need parking garages. In the sprawling suburbs, developers can build office buildings with large surface parking lots that are much less expensive to build than parking garages. That puts downtown at a competitive disadvantage with the suburbs for office building development and office tenants.
Until the downtown office market becomes as strong and self-sustaining as the downtown housing market, aldermen should get used to receiving requests for TIF subsidies for new office buildings, commercial Realtors say.
"I know of three other (downtown office) projects in the pipeline that have similar concerns," said Alderman Michael Murphy, who said he is undecided about the Manpower subsidy.
Murphy and some other undecided aldermen acknowledge the benefits the city would gain from having a Fortune 500 company like Manpower move downtown, but they are concerned about the need to subsidize new office building development downtown and the precedent the Manpower subsidy would set for other projects.
"What’s the future hold for other projects?" Murphy said. "It’s a complicated issue."
"Is the city of Milwaukee going down the slippery slope of having to finance parking at every turn?" said Alderman James Bohl Jr., who also says he is undecided about the Manpower subsidy. "I have a hard time believing it’s in our best interest to do that unless a real beneficial case can be made."
Aldermen Robert Bauman, Willie Wade and Joe Dudzik also said they are undecided and need more information about the project.
Bauman said he wants to see an economic impact report that shows the benefit of bringing Manpower downtown.
"I will support this development if it is demonstrated that there will be more economic benefit generated than the cost of the (city’s) investment," he said. "Show me the return on a $25 million investment, and I will support it."
Bauman said the city funding for the project should have been considered a general subsidy and should not have been presented as a subsidy to provide free parking to Manpower employees. The city should not be subsidizing parking, especially at the same time it subsidizes mass transit, he said.
"We’re subsidizing opposites," he said.
But if the city refuses to provide subsidies for downtown office development, those projects may be built in the suburbs instead, and the city would miss out on the benefits that office tenants and their employees could bring to other downtown businesses.
"I think (the opposition to the Manpower TIF) is short-term thinking," said Alderman Michael D’Amato, whose ward includes the Manpower site. He opposed the PabstCity project, but supports the Manpower TIF. "To add 1,000 to 1,200 jobs downtown for the next 20 years is going to help the housing market and the retail market in the downtown area. It’s a tremendous shot in the arm for the City of Milwaukee. If the city did not provide some incentives, they would have chosen to go someplace else."
More Milwaukee news
So far, buyers have reserved seven of the 38 condominiums planned in Deerfield, Ill.-based Legacy Real Estate Partners LLC’s Flatiron project in the Park East Freeway corridor. Construction will begin once 10 units are reserved, said Rod Engel, a principal of Legacy Real Estate Partners. Construction is expected to begin in late spring and be completed by the summer of 2007, he said. The five-story building will be built on a sloped, triangular-shaped lot at Water, Jefferson and Pleasant streets. Legacy won a design competition and purchased the lot from the city for $230,800. The starting price for the Flatiron condos is $169,900. Shorewest Realtors is marketing the condos. The building will also have 2,800 square feet of retail space, Engel said.
Caledonia
Caledonia-based Legacy Development is planning a mixed-use New Urbanism development for 320 acres of farmland located east of the intersection of County Highways K and V. The development, to be called Twelve Oaks, would have 950 homes, about 70 percent single family and 30 percent multi-family townhomes, priced between $250,000 and $500,000. There would be up to 200,000 square feet of office space and 270,000 square feet of retail space, including a grocery store. A home built in the 1880s would be converted into a bed-and-breakfast inn. The compact, pedestrian-friendly development would also have athletic fields, a homeowners association-funded community center with a swimming pool, natural areas and possibly a church and a school. The project was designed by Shorewood-based Studio 1032. The development will create sort of a downtown or town center for Caledonia, said Legacy Development president John Helding. The development would occur in phases from 2007 to 2012. The project is yet another sign of the development potential of the vacant land along the Interstate 94 corridor between Milwaukee and Chicago. "Being one mile off the Interstate is critical," Helding said.
Franklin
Equitable Development LLC plans to build five, one-story retail buildings with a total of 41,420 square feet of space and a two-story office building with 20,000 square feet of space at 5610 W. Rawson Ave. The property is a narrow, but long 10-acre site. The Guarantee Landscape building on the property would be demolished.
Kenosha
Chicago-based Corretti Development is planning a three-building commercial development at the southwest corner of 30th Avenue and 18th Street on the city’s north side. The six-acre site is currently vacant. Corretti plans to build a 8,000-square-foot Walgreens store and a 4,300-square-foot McDonalds restaurant on the site. The third building will likely be a bank, Corretti has told city officials.
Oconomowoc
The massive Pabst Farms residential and commercial development at I-94 and Highway 67 has attracted two more retail tenants to the Marketplace at Pabst Farms. Cingular Wireless will occupy 2,600 square feet of space and Barnes Jewelers will occupy 1,476 square feet of space. Mid-America Real Estate brokered the leases. The Marketplace at Pabst Farms is a 118,000-square-foot retail area with tenants providing goods and services for neighborhood residents. It is anchored by a 66,000-square-foot Pick ‘n Save grocery store. Other tenants include a Starbucks cafe, Nick-N-Willy’s pizza, Martinizing and Fantastic Sam’s. M&I Bank is also planning to build a branch in a different part of Pabst Farms. Eventually, Pabst Farms will have a larger retail area with stores intended to draw shoppers from throughout the region.
Lake Geneva
Another grocery store will bite the dust soon, after losing marketshare to a Wal-Mart Supercenter. Richter Sentry Foods on Edwards Boulevard is planning to close before the end of February. The store has been in Lake Geneva for more than 40 years, including 16 at the current location. In 2004, Wal-Mart replaced its discount store, located across the street from the Sentry store, with a Supercenter store. Unlike its regular discount stores, the Wal-Mart Supercenter stores include grocery items and compete directly with local grocery stores. The only other large grocery store in Lake Geneva is a Pick ‘n Save store.
Greenfield
Ali El Hashash plans to move his Holy Land Grocery & Bakery store from 5326 S. 27th St. three-quarters of a mile south to 2765 Ramsey Avenue. The store will occupy space formerly used by a White Hen Pantry. Hashash plans to improve the interior and the exterior of the building. Two other tenants in the building, Buckhorn Guns and Check Into Cash, will remain.
John Paul’s Pontiac Buick, 3615 S. 108th St., plans to renovate a building, which it had been using for used vehicle sales, to provide space for selling new Suzuki vehicles.
Smokers Club, a tobacco products store, plans to move from 4396 Loomis Road to 4267 Layton Avenue.
Editor’s note:
For a viewpoint on the Manpower Inc. headquarters proposal, see page 39. For additional insight on Commercial Real Estate trends, see the video of the recent Small Business Times Commercial Real Estate & Development Conference at www.biztimes.com
Leases
Apex Commercial
Dan Vilione d.b.a. Vilcorp leased 1,085 square feet of office space at 606 E. Wisconsin Ave., Milwaukee, from Olsen Management Group LLC.
Lincoln Creek Development leased 929 square feet of office space at 400 E. Wisconsin Ave., Milwaukee, from Curry Pierce Limited Partnership.
International Institute of Wisconsin leased 6,952 square feet of office space and Jonas Walters leased 1,500 square feet of office space at 1110 N. Old World Third St., Milwaukee, from Riverfront Plaza Joint Venture.
Donaldson leased 2,477 square feet of office space and Lafarge NA leased 1,448 square feet of office space at 150 N. Sunny Slope Road, Brookfield, from 150 Sunnyslope LLC.
Evolution Retirement Services Inc. leased 1,160 square feet of office space at 10400 Innovation Dr., Wauwatosa, from Innovation Point LLC.
Carlson Specialty Temps leased 1,076 square feet of office space and Encompass-Effective Mental Health Services leased 2,774 square feet of office space at 1011 N. Mayfair Road, Wauwatosa, from 1011 Mayfair Road LP.
Colliers Barry
Family Options Counseling leased 4,000 square feet of office space at 3015 N. 114th St., Wauwatosa.
Liberty Tax Service leased 2,000 square feet of office space at 45 Hilldale Road, Hartford.
Osker Ellis leased 12,000 square feet of industrial space at 1929 W. Buffum St., Milwaukee.
Mehmert leased 35,353 square feet of industrial space at 525 Norton Dr., Hartland.
Bluefield Marketing leased 7,000 square feet of office space at 2100 Pewaukee Road, Waukesha.
Dickman Company Inc.
Griffin Ford Inc. leased 4,404 square feet of industrial space at 1511 Pearl St., Waukesha, from The Olson Company.
Grubb & Ellis|Boerke Company
Babies R Us leased 43,196 square feet of space in the former Circuit City location at 18505 W. Bluemound Road, Brookfield.
Inland Companies
Covenant Health Care renewed its lease for
74,965 square feet of office space, Maximus
renewed its lease for 39,569 square feet of office space and Wisconsin Medical Society leased 2,846 square feet of office space at the West Allis Center, 1126 S. 70th St., West Allis.
Manpower Inc. leased 1,464 square feet of office space at the Commons at 5 Corners in Cedarburg.
Mid-America Real Estate
Caboodle Cartridge leased 581 square feet of space and Wisconsin Tax Specialist leased 1,360 square feet of space at Falls Plaza, 14900-15100 W. Appleton Ave., Menomonee Falls, from Falls Plaza LLC (The Cloverleaf Group Inc.).
Texas Roadhouse leased 1.74 acres at the northeast corner of Paradise Drive and Silverbrook Drive in West Bend, from CDC Real Estate Corp.
Dollar Tree Stores leased 11,095 square feet at 2150 W. Silvernail Road, Silvernail Shopping Center, Pewaukee, from United Properties.
Franklin Rehabilitation Inc. leased 1,920 square feet in the Franklin Center at 76th Street and Rawson Avenue in Franklin, from Franklin Centre Wisconsin LLC.
The Hottest Dog leased 1,538 square feet of space at West Village Center, 1130 Miller Park Way, West Milwaukee, from Ogden Development Group.
Barnes Jewelers leased 1,476 square feet of space in the Marketplace at Pabst Farms at Highway 67 and County Highway B in Oconomowoc, from Pabst Farms Development LLC.
Starbucks Coffee leased 1,800 square feet of space at Tri-City Commons, 6525 S. 27th St., Franklin, from Maxim Realty Group LLC.
Polacheck Company
Caffeine Communications Inc. leased 2,715 square feet of space at 306 N. Milwaukee St., Milwaukee, from Leopold/Miller Limited Partnership.
Evolution Retirement Services Inc. leased 1,160 square feet of space at 10400 Innovation Dr., Wauwatosa, from Innovation Point LLC.
Kohler & Hart LLP leased 3,271 square feet of space at 735 N. Water St. #1212, Milwaukee, from Compass Properties North Water Street LLC.
Citi Financial leased 1,600 square feet of space at 819 S. Main St., West Bend, from Wein Real Estate.
Smithyman Enterprises LLC d.b.a. Cartridge World leased 1,400 square feet of space at 12132 W. Capitol Dr., Wauwatosa, from C-Jem LLC.
Sales
Apex Commercial
Oliver Lee Properties LLC purchased 15,300 square feet of industrial space at W137 N5472 Williams Place, Menomonee Falls, from Press-Weld Corp. of Wisconsin.
Colliers Barry
Winkler Real Estate LLC purchased the
10,812-square-foot industrial facility at 6130
S. 13th St., Milwaukee.
Metal Masters purchased the 17,120-square-foot American Bolt facility at 2160 Calhoun Road, New Berlin.
Dickman Company Inc.
SFX Enterprises LLC purchased 16,000 square feet of industrial space at 1827 and 1901 W. Glendale Ave., Milwaukee, from the Barbara Messner Revocable Trust and the Carol P. Martin Revocable Trust for $445,000.
Inland Companies
Valvoline Oil Change Center purchased the 8,194-square-foot building at 2230 Sun Valley Dr., Delafield.
Mid-America Real Estate
Delavan Retail III purchased 23 acres from Household Finance Corp. III at Delavan Crossings, located at Highway 50 and I-43 in Delavan.
Polacheck Company Inc.
Hallie Rapids LLC purchased 2.48 acres of land at 10831 W. Park Place, Milwaukee, from Liberty Property Limited Partnership.
New construction
VJS Construction Services, Pewaukee, recently began construction of Ronald Reagan Elementary School at the corner of Calhoun Road and National Avenue in New Berlin. The 135,000-square-foot, K-6 school will accommodate 750 students.
Creative Constructors LLC, Menomonee Falls, was awarded the contract to do penthouse and mechanical upgrades to the chiller stage 3 at the downtown Milwaukee Area Technical College (MATC) campus.
