Bucks arena project anchors hot Park East, North Water Street area

Real Estate & Development

Last updated on July 3rd, 2019 at 07:13 pm

In late October, Alderman Nik Kovac stood in a vacant lot at the northeast corner of East Knapp and North Water streets in downtown Milwaukee pointing to the ground, where it was just announced a five-story office building would be built.

Kovac was standing on one of the last available development sites in the Park East corridor. On that site, Brookfield-based Hammes Co. announced plans to build a $30 million, 94,000-square-foot office building and will move its corporate headquarters there.

The Milwaukee Bucks practice facility will be adjacent to The Brewery complex, connecting the Park East corridor with the former Pabst brewery.
The Milwaukee Bucks practice facility will be adjacent to The Brewery complex, connecting the Park East corridor with the former Pabst brewery.

The site for the Hammes project is at the epicenter of the hottest development zone in downtown Milwaukee, right at the middle of the Park East corridor and North Water Street, where numerous developments have been built recently, are under construction or are planned. The area is transforming dramatically and changing the feel of downtown Milwaukee.

“I think a lot of people were confused for a while because they thought Park East was called Park East for parking,” Kovac said. “We had pretty much torn down a major freeway and all we had was gravel for a fairly long time.”

For too long, Kovac said, downtown Milwaukee was a place known for shutting down on weeknights and weekends. But that has changed with the development along North Water Street and in the Park East corridor.

“In the last 10 years, we’ve really seen the wisdom of that decision (to tear down the Park East freeway spur), which was made before (Mayor Tom Barrett) or I ever entered City Hall as elected officials,” Kovac said. “The Bucks arena is the most prominent example, but you can see The Moderne, Bader Rutter and coming around the curve (on North Water Street) all of the apartments that Stu Wangard and Barry Mandel are developing.”

The City of Milwaukee demolished the Park East Freeway, a mile-long spur that was built as part of a larger plan to encircle the downtown business district with freeways, in 2003 to open up the land for development.

The freeway was replaced with West McKinley Avenue and the Park East corridor now consists of more than 60 acres of land, 24 of which were sites available for redevelopment.

For more than a decade, much of the Park East land, particularly west of the Milwaukee River, remained vacant. City officials tried to convince Menomonee Falls-based Kohl’s Corp. to build a new corporate headquarters campus in the western portion of the Park East corridor, but the company rejected the idea in 2012. A 22-story development that would have included a 175-room Palomar Hotel and 63 condominiums at the northwest corner of West Juneau Avenue and North Old World Third Street died in early 2009.

Some of the first major developments completed in the Park East corridor included the 160-room Aloft hotel in 2009, the first phase of The North End in 2009, and the 30-story Moderne residential tower in 2012.

When Milwaukee County Executive Chris Abele took office in 2011, filling the large amount of vacant land that remained in the Park East corridor was one of the first items on his list of things to do. Milwaukee County owned 16 acres of land in the Park East corridor and set up a website with the city, working with the Commercial Association of Realtors Wisconsin to market the available real estate within the corridor.

Wangard Partners is redeveloping the former Laacke & Joys site at 1433 N. Water St. along the Milwaukee River. Brookfield-based Bader Rutter & Associates will anchor 60,000 square feet of the office portion of the building.
Wangard Partners is redeveloping the former Laacke & Joys site at 1433 N. Water St. along the Milwaukee River. Brookfield-based Bader Rutter & Associates will anchor 60,000 square feet of the office portion of the building.

In 2014, an RFP was issued by the county for 10 acres of land bordered by West McKinley Avenue on the north, North Old World Third Street on the east, West Juneau Avenue on the south, and West Winnebago Street on the west. Two groups responded, each offering $1. The ownership group of the Milwaukee Bucks was awarded the parcel and a $524 million new Milwaukee Bucks arena is currently being built, as is a parking structure and a training facility/health center. The Bucks plan additional mixed-use development in the rest of the Park East corridor, west of the Milwaukee River.

The arena project, of course, was not easy to get off the ground. Abele was criticized for giving the county’s land away. The arena deal also needed state, county and city approval for the various funding mechanisms.

“(The arena project) was a good learning experience,” Abele said. “It helped us learn about partnering effectively. I’m a big fan of when things go right, or wrong, making a concerted effort to learn from it.”

Ken Kraemer, executive director of Building Advantage, the Construction Labor Management Council of Southeast Wisconsin, said when developer Rick Barrett announced the Moderne project west of the Milwaukee River, everyone chuckled, but it proved to be a phenomenal project that finally jump-started development of that portion of the Park East corridor.

“The Bucks, in my opinion, had the right partners with the city, state and county doing the heavy lift and now what they have going on is a three-year project with a $1.3 billion total overall build,” Kraemer said. “For us, it’s a jobs story, and I think that’s been lost a bit, plus all of the other surrounding development – it has been amazing.”

The sale of the Park East land to the Bucks for $1 has an estimated net benefit in direct job creation through construction and new job creation expected to be valued at $400 million, according to Abele’s office.

A total of 15,221 jobs are expected to be created during construction of the arena and the ancillary development. The new real estate pledged or currently under construction totals $234.2 million

As of today, there is only one remaining parcel in the Park East corridor that is not under construction or an option to purchase. That parcel, known as Block 12, is owned by Milwaukee County. The 16,000-square-foot (one-third acre) parcel is bordered by North Water, North Edison and East Knapp streets.

Both Hammes Co. and Milwaukee-based The Marcus Corp. have submitted proposals to purchase and develop it. However, Jon Hammes, company founder, said he and Marcus Corp. have agreed to use the land as a park. Milwaukee County officials would not confirm.

“I think most people would say there is never a deal that couldn’t be improved upon – fair enough – but I also think most people would agree the jobs involved, just the construction jobs alone, with this project are paying thousands of people who are getting paid right now,” Abele said. “I would think it would be difficult to point to any other catalyst than the Bucks arena.”

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