Last June, a collaboration of city, county and state officials and the Commercial Association of Realtors Wisconsin (CARW) unveiled a new streamlined development approval process for the long vacant western section of the Park East corridor.
The Park East Freeway spur, located on the north side of downtown Milwaukee, was torn down about 12 years ago in hopes of opening up massive amounts of real estate for new development. But most of the Park East corridor, particularly the area west of the Milwaukee River, remains vacant.
Development proposals for that portion of the Park East corridor have been few and far between. City officials tried to convince Kohl’s to build a new corporate headquarters campus in the western portion of the Park East corridor, but the company rejected that idea in 2012. A 22-story development with a 175-room Palomar hotel, 63 luxury condominiums, restaurant and retail space planned for the northwest corner of West Juneau Avenue and Old World Third Street died in early 2009 when the capital markets for commercial real estate development froze during the Great Recession.
The initiative announced last June sought to improve the process in hopes of finally attracting development to the western portion of the Park East corridor. But at the press conference, nobody addressed the elephant in the room: what are the future plans for the nearby BMO Harris Bradley Center and where will a new arena be built for the Milwaukee Bucks?
That day, James T. Barry III, president of Milwaukee-based commercial real estate firm DTZ Barry (then known as Cassidy Turley Barry) told me he was convinced that a new arena for the Bucks would be built north of the Bradley Center.
“Mark my word,” he said.
Now almost a year later, after considering a handful of other possible downtown sites, the Bucks have finally announced that they do plan to build a new $500 million, 17,000-square-foot arena just north of the Bradley Center. The preliminary arena plans include the closure of North Fourth Street between Highland and Juneau avenues to create a public plaza between the arena and an “entertainment live block,” which could include sports bars and a beer garden around the plaza with a large video screen for public gatherings to watch events. Plans show that the plaza would be outdoors, but much of it would be covered and could have fire pits for heating. An extension of the planned downtown streetcar could run through the plaza.
The Bucks’ plans also include parking structures and a practice facility for the team at the west end of the Park East corridor.
The funding deal for the arena is still being negotiated between the Bucks’ owners and state, city and county officials.
In addition to the arena itself, a key component of the project is about $500 million in ancillary development that the Bucks say will be built around the arena in the Park East corridor and on the current site of the Bradley Center. The ancillary development is expected to be built by the Bucks’ owners and other developers. The Bucks offered few specifics about the ancillary development except to say that it could include retail, entertainment, office and residential development. They also said they expect the ancillary portion to be developed over a 10 year period.
Mike Fascitelli, a co-owner of the Bucks, is “quarterbacking” the arena and ancillary development project, Bucks president Peter Feigin said. Fascitelli is a member of the board for New York-based Vornado Realty Trust, a real estate investment trust. He was formerly president and CEO of the company. During his tenure there, the company purchased the Merchandise Mart building in Chicago, several office buildings near Madison Square Garden in New York, and developed the Bloomberg headquarters in New York. Fascitelli also previously was the head of the real estate investment banking business of Goldman, Sachs & Co.
“This (arena) to me is an engine for future development and growth,” Fascitelli said. “It would not be a successful thing if we just built an arena. We are trying to build a community center that has a lot of uses at various times, including on the non-game days. As you know, most of the land (in the arena and ancillary development project) has been vacant for quite a while. We think this arena will have a huge impact around those surrounding areas.”
The first phase of the project, including the arena, plaza and parking structure, will be about 1 million square feet of space. The ancillary development could total 2 million square feet of space, Fascitelli said.
Leading the design for the arena project and the ancillary development concept is Populous, a Kansas City, Mo.-based architecture and planning firm. The Bucks have appointed Populous to oversee a group of global, national and local architects, including HNTB, also of Kansas City, and Milwaukee-based Eppstein Uhen Architects.
“Our team feels a little like we have been shot out of a cannon,” said Brad Clark, senior architect and senior principal of Populous. “It has been an intense process. It was clear to us at the beginning that the Bucks ownership has a tremendous vision. This really isn’t just about designing an arena. This is more than just that. It’s a bigger and broader vision.”
If successful, the arena project and ancillary development could fill a huge gap between the former Pabst brewery complex, the Haymarket neighborhood, King Drive, Schlitz Park, the Wisconsin Center District and the rest of downtown Milwaukee. Not included in the Bucks’ vision are several other nearby vacant lots, including sites on Old World Third Street, Fourth Street and Juneau Avenue, that could attract new development if the arena project is successful.
“From a real estate development standpoint this is the thing that would knit everything together,” Barry said. “There’s no doubt it will have a catalytic effect.”
But it remains to be seen if a new arena can actually attract the ancillary development the Bucks envision.
The Commercial Association of Realtors Wisconsin says the arena can be a catalytic project for ancillary development and is lobbying hard to convince elected officials to support it.
“This is the single most catalytic project for downtown Milwaukee in a generation, with the prospect of $1 billion in new real estate development,” said Paul Galbraith, CARW chairman and regional manager for Somerset Properties.
Barry said he has reviewed the Bucks’ plans in more detail at their offices and considers the ancillary development plans “realistic.”
“It’s ambitious by Milwaukee standards. But if you break it down into pieces it’s a fairly modest and therefore achievable plan,” he said. “I don’t think they are over-promising anything on this. I think they thought this out very thoroughly. I think they have a good plan that they can execute on.”
The ancillary development could be a critical component to the financing for the arena project. Gov. Scott Walker and Republican leaders in the Legislature are putting pressure on the city to provide more funds for the arena. Mayor Tom Barrett has said the city will make a contribution worth about $25 million, including infrastructure improvements and a city-owned parking structure that would become the site of the “entertainment live block.” The city cannot provide tax incremental financing for the arena because the arena will be tax-exempt and will not generate property taxes, Barrett said.
However, the ancillary development planned by the Bucks would generate property taxes. Patrick Curley, Barrett’s chief of staff, said it was too early to consider TIF financing for the ancillary development until the Bucks provide more specifics.
“I think in the next two to three weeks we are going to work through that with (the Bucks),” Curley said. “We have to have the conversations about the details, about the timing of the ancillary development. Until we get there, there is nothing to TIF yet. The Bucks are very open to having those conversations. We all know we need to get closure on the financing piece.”