Building a New East Side

Last updated on May 13th, 2019 at 02:37 pm

Developers Steve Stewart and Brian Kliesmet have formed a partnership to build a mixed-use high-rise building with a 76-room boutique hotel near the North Avenue entertainment district on Milwaukee’s east side.

Stewart, president of Milwaukee-based New Vision Development Co. LLC, and Kliesmet, president of Milwaukee-based Land Acquisitions & Investments LLC, say their partnership for the project is East Side Hoteliers LLC. Kliesmet is doing some of the design work for the project.

The east side currently has no hotels, but the developers say one is badly needed to serve the neighborhood, which includes the University of Wisconsin-Milwaukee and Columbia St. Mary’s Hospital.

“We just think (the hotel) can be a real asset for everybody,” Stewart said. “I just think it’s going to be really great for the community. I’m very excited about this.”

If approved by City of Milwaukee officials, the building would be constructed on a pair of adjacent parking lots just north of the U.S. Bank branch at 2303 N. Farwell Ave. The lots are located between Farwell and Murray avenues and just south of Thomas Avenue. One of the lots is owned by U.S. Bank, and the other is owned by the City of Milwaukee.

Stewart and Kliesmet have an exclusive option for a long-term lease of the U.S. Bank lot, and they are having discussions with city officials about purchasing the city’s lot.

The hotel might be part of a national chain.

“We’re interviewing flags right now,” Kliesmet said.

The hotel’s features would include a small swimming pool, an exercise area, conference and banquet facilities and a restaurant.

Stewart said they already have letters of intent from a restaurant and an office tenant for the building. He declined to name those potential tenants. The building plans include a 4,000-square-foot, first-floor restaurant at the corner of Thomas and Farwell avenues and a 3,500-square-foot retail space at the corner of Thomas and Murray avenues.

The developers’ plans also include major improvements to Thomas Avenue by adding more landscaping and replacing the street pavement with colored bricks or colored stamped concrete.

“We want to create character on Thomas,” Kliesmet said.

However, Stewart and Kliesmet have had to scale back their plans for the development. Originally they wanted to build a 14-story building with 90,000 square feet of commercial space for retail or office tenants, the 76-room hotel, 15 condominiums ranging between 1,000 square feet and 3,100 square feet in size and 350 indoor parking spaces.

City Planner Robert Greenstreet and other city staffers met with Stewart recently and told him that the originally proposed building was too large for the site.

“We’ve given them some guidance on adjusting their plan to better fit the needs of the neighborhood,” said Department of City Development spokeswoman Andrea Rowe Richards.

Stewart and Kliesmet say they are working with city officials to tweak the project and already are adjusting their plans. They now plan to have three of the parking levels underground, instead of two as originally planned, which will reduce the building’s height by one story. The parking will be used by the building’s tenants, the U.S. Bank branch and customers patronizing other area businesses.

They are also considering plans to eliminate one floor of the condominiums, Kliesmet said.

In addition, they are making architectural changes to the building.

“We’ve got to scale it back down,” Stewart said. “Not a tremendous amount of changes, just a few.”

“Bob Greenstreet is working with us on the design of the building to make it feel more pedestrian friendly,” Kliesmet said. The goal for the project is to help create “higher livable density,” which will invigorate the city and discourage urban sprawl, he said.

The hotel and the commercial space will not be scaled back, Kliesmet said.

The city officials did not provide a height limit for the project, Stewart said. By comparison, the new Columbia St. Mary’s Hospital will be 10 stories and 242 feet high when its $417 million project is complete less than two blocks away from the site of the proposed hotel.

Stewart and Kliesmet strongly believe their project will enhance the east side. The hotel will be especially beneficial to UWM and Columbia St. Mary’s, Stewart said.

“This is going to be the crowning jewel to the Columbia St. Mary’s campus,” Kliesmet said.

UWM, which has about 28,000 students and about 3,500 employees, is located about nine blocks north of the proposed hotel site. A large number of people visit the university each year, including parents visiting their children who are students at the school, parents and potential students taking campus tours, people attending conferences at the university, guest lecturers, athletes and fans attending sporting events, friends and family members attending graduation ceremonies, and people attending or participating in arts events at the university.

UWM does not keep track of how many visitors it hosts each year, said Tom Luljak, vice chancellor of university relations. However, as the school has attracted more students from outside of the metropolitan Milwaukee area, more people are traveling from outside of the area to visit the school, he said.

“I would say (the number of visitors) is enormous,” Luljak said. “We really do bring people in from around the country for various functions throughout the course of the year.”

Currently, out-of-town visitors to UWM are mostly staying at hotels in downtown Milwaukee or in Glendale, Luljak said. Those visitors would likely prefer to stay at a hotel closer to campus.

“For the people who have some connections to UWM, a facility that is within walking distance or a short car ride away from the campus would appeal to a certain segment,” Luljak said.

Near Stewart and Kliesmet’s proposed hotel site, Columbia St. Mary’s construction project will consolidate the Columbia and St. Mary’s hospitals. The project includes the five-story Prospect Medical Commons building, which will provide space for a Whole Foods store and medical offices.

Out-of-town visitors of patients at Columbia St. Mary’s usually stay at hotels downtown or in Glendale, said Paul Westrick, vice president of external and government relations for the hospital.

“Having (a hotel) within walking distance, or a short cab ride (to the hospital) would be a real benefit,” he said. “It’s something we are really interested in seeing develop in the area.”

About 10 to 15 percent of the hospital’s inpatient visits are people from outside the area, he said.

“The burn center draws from northern Illinois, most of Wisconsin and the upper peninsula of Michigan,” Westrick said. Some of the hospital’s specialty programs draw people from around the country.

Other development in the growing east side area includes Park Lafayette, which will have about 290 condominiums in two 20-story buildings. They will be built by Renaissant Development Group LLC on a vacant lot at Prospect and Lafayette avenues, located about five blocks from the proposed hotel site. Construction is expected to begin this year and be complete by 2008.

In addition, Weas Development Co. and the Milwaukee Development Corp. are converting the Kenilworth Building into two buildings with space for the UWM Peck School of the Arts, UWM student housing and retail space. The buildings are located at 1925 E. Kenilworth Place, about a block from the proposed hotel site. The $68 million Kenilworth project is expected to be completed later this year.

UWM also plans to build a six-story student apartment building just north of North Avenue, about one block east of Humboldt Boulevard. The building would have 119 units and could house up to 488 students.

As the east side and the area near North Avenue continue to grow, some say the neighborhood needs a hotel. Business owners in the area respond favorably when they hear rumors about a hotel development on the east side, said Jim Plaisted, executive director of the East North Avenue Business Improvement District (BID).

“If you are looking at a regional map of hotel locations, you are looking at a big gap between downtown and Glendale,” Plaisted said. “I think (the east side) is a great market for a hotel.”

Stewart and Kleismet are not the only developers thinking about bringing a hotel to the east side.

Ogden & Co. wanted to build a 43-room boutique hotel, with 10,000 square feet of retail space, on a city-owned parking lot at 2574 N. Downer Ave. The site is about half a mile northeast of Stewart and Kleismet’s site.

Ogden responded to a request for proposals (RFP) from the city seeking development proposals for the property. However, staff at the Department of City Development decided not to recommend any of them, including the Ogden hotel proposal. City officials balked at Ogden & Co.’s request for about $1.5 million in tax incremental financing (TIF).

By comparison, Stewart and Kliesmet are, “not asking for any public assistance” for their project Kliesmet said.

The Downer Avenue hotel project is dead for now, said Tom Neubauer, an associate with Ogden Development Group. The company may tweak and re-submit its proposal to the city once another RFP is issued for the property.

“We may take another swing at it,” Neubauer said. “We think that for the area from UWM south to the new Columbia St. Mary’s Hospital, and institutions in between, (a hotel) would be a very welcome addition, especially at the scale we were proposing.”

An east side hotel would not compete with the downtown hotel properties that rely on tourists, business travelers and convention attendees, said Doug Neilson, president and chief executive officer of Visit Milwaukee.

“I’m not sure (if the east side needs a hotel),” he said. “I would think there would be a niche for it.”

The east side hotel project is not the first that Stewart and Kliesmet have worked on together. They also are partnering to develop an $11 million, five-story building at the corner of West Greenfield Avenue and South 64th Street in West Allis. The building will have 22,000 square feet of retail space on the first floor and 42 condominiums on the upper floors. The condos will be priced between $164,000 and $349,000. Construction is expected to begin this fall and be completed in the fall of 2007.

Stewart is also a partner with the River Renaissance development in Milwaukee’s Historic Third Ward and the City Center development in New Berlin.

River Renaissance is a seven-story building under construction at the corner of Water and Erie streets and along the Milwaukee River. The building will have 80 condos and 20,000 square feet of retail space. Construction began last year and is expected to be complete next year.

For the City Center project, located at National Avenue and Coffee Road in New Berlin, Stewart is handling development of 70,000 square feet of retail space, a 30,000-square-foot medical clinic and 20,000 square feet of office space.

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