Anatomy of a deal The Pabst redevelopment

But the path to the redevelopment of the expansive complex appears to have come about incredibly quickly, especially by Milwaukee standards, according to information SBT gleaned from those now working to advance the resurrection of the site.
In a little less than a year’s time, a coffee-shop conversation appears to have fostered what could become one of the city’s largest real estate deals ever, with Milwaukee Bucks basketball coach George Karl and his Friends of Hoop organization playing a key role in the deal.
Karl founded his nonprofit corporation in Seattle, and it has since developed centers for basketball, education and career exploration in Columbus and Toledo, Ohio.
He hired Erin Broome-Shelton to be the executive director of the organization, which he brought to Milwaukee when he became head coach of the Bucks.
Karl and Broome-Shelton set out earlier this year to explore the feasibility of building a center to serve the community in Milwaukee. Ultimately, their quest for a site for the center led to a planned $300 million redevelopment of the Pabst Brewery.
The following is the timeline and anatomy of what is now being proposed:

During a conversation over coffee at Starbucks on Water Street in Milwaukee’s Historic Third Ward, a friend suggests that Broome-Shelton contact Steven Chamberlin, president of C.G. Schmidt Inc., Milwaukee, to learn more about the local real estate market. The friend also suggests she contact David Uihlein, an architect who happens to be the son of the late Milwaukee philanthropist Jane Bradley-Pettit.
Broome-Shelton and Karl meet with Chamberlin at Miss Katie’s Diner near Marquette University.

Chamberlin contacts Uihlein and arranges a meeting with Broome-Shelton and Karl.
"I couldn’t reach David, but Steve Chamberlin did," Broome-Shelton recalled.

Uihlein delivers his first sketches of a Friends of Hoop Center in Milwaukee to Karl, Broome-Shelton and Chamberlin at the Cousins Center in St. Francis.

With a willing construction partner and an architect’s sketch in hand, Broome-Shelton begins scouting the city, trying to find the perfect site to build a center in Milwaukee. She seriously considers Northridge Mall and a site in the Menomonee River Valley.
"The city …. No one wanted us in the valley," she said.

Broome-Shelton overhears some real estate developers from Florida talking in Starbucks on Water Street.
"Because I’m so nosey, I just butted in and said, ‘Hey, can you guys build me a building?" she recalled.

The developers decline her overture, but they tell her that if they were going to build such a center in Milwaukee, the Pabst Brewery would be the perfect site.

Terry McMahon, broker with Grubb & Ellis|Boerke Co., arranges a Pabst site showing for Broome-Shelton and Karl with Jim Haertel, who had formed Brew City Redevelopment Group to redevelop and market the site.

Broome-Shelton and Karl tour the site with Haertel.

Karl immediately likes the site’s potential, but he’s thinking solely in terms of his center, not a major urban redevelopment project.
"I’ve always driven by this (site) when I’m bringing people through town, and I always said, ‘That should be something there," Karl recalled. "MATC is right here, and Marquette is a driver and a pitching wedge away."

Afterward, they go to Club Garibaldi on Milwaukee’s south side for a beer to further discuss the potential.
"George saw that I was an underdog who needed help. I needed a bigger player. And, he said, ‘I know this guy from when I was coaching in Cleveland," Haertel recalled. "When George Karl invites you out for a beer, I think you should go. There was like a family reunion going on in the back room, and people were like, ‘I can’t believe there’s George Karl sitting at the bar having a beer like a regular guy.’ But he is."
Broome-Shelton tells Karl she believes the Pabst site would be the ideal "non-territorial" location for the center. When Karl realizes it could be a major redevelopment project, he calls John Ferchill, founder of The Ferchill Group in Cleveland.

Karl and Ferchill had met when Karl was coach of the Cleveland Cavaliers and Ferchill was considering buying that franchise. The two had dinner in Cleveland on March 3, after a Bucks’ loss to the Cavaliers, and Ferchill had told Karl that he was redeveloping the former H.J. Heinz Co. complex in Pittsburgh.
Karl recalls the conversation and convinces Ferchill to "come take a look" at the Pabst site.
"When we had met for dinner, I wasn’t in a good mood. We had just gotten beat by about 15 points. But I remembered him telling me about the Heinz thing. I thought, ‘Well, this is a lot like the Heinz project,’ so I called John," Karl recalled. "I think he was really on top of it right away."

Ferchill comes to Milwaukee and tours the site with Haertel. Ferchill "falls in love" with the Pabst site.

Officials from Wispark, the real estate development arm of Wisconsin Energy Corp., and the Milwaukee Redevelopment Corp. tour the Pabst site with Haertel. Broome-Shelton again "butts in." She calls Ferchill and tells him he better move quickly if he’s interested in the Pabst site, because she fears Wispark will make an offer.

Ferchill returns to Milwaukee and meets with Uihlein, Chamberlin and Dan Davis, vice president of C.G. Schmidt. He also meets with Karl and Jerold Franke, president of Wispark. The notion of a partnership to buy and develop the project is discussed.

Ferchill sends a letter to Franke, saying The Ferchill Group is interested in partnering with Wispark. The parties agree to equally divide their ownership shares, with a 5% share going to Haertel’s Brew City Redevelopment.

Wispark delivers $500,000 in earnest money to meet the terms of the purchase agreement. The agreement allows for 90 days of due diligence, in which the parties can back out of the deal.
As Broome-Shelton describes it, "THE meeting" takes place at the University Club downtown between Ferchill, Franke, Karl and other players in the project to clarify roles. During some moments of the discussion, Karl and Broome-Shelton tell them, "Come on you guys. Let’s get this done."

The partners agree to finance the construction of Karl’s Friends of Hoop Center in Milwaukee at the site and give the building as a gift, or a "finder’s fee," to an LLC to be formed by Karl, who will then lease it to his nonprofit corporation.

The Ferchill Group and Wispark close on the purchase of the Pabst site for $12 million from S&P Co., the Mill Valley, Calif.-based parent company of Pabst Brewing Co. Ferchill and Wispark hope to attract $300 million in mixed-use development at the site.

Sept. 27, 2002 Small Business Times, Milwaukee

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