As the city of Milwaukee moves forward with redevelopment efforts for the Marcus Performing Arts Center parking structure site, Ald.
Robert Bauman, who represents the downtown area, wants to pump the brakes.
Last month,
the Milwaukee Department of City Development (DCD) chose Madison-based developer The Neutral Project's ambitious $700 million proposal for the site at 1001 N. Water St. Built over several phases, the development could include 750 residential units, 190,000 square feet of office space, 40,000 square feet of retail space, 300 hotel rooms, 1,100 structured parking spaces and public plazas and walkways. The development would include a 55-story mass timber tower that would replace the U.S. Bank Center as the state's tallest building.
Bauman has now put forth a resolution requesting that the city hire one or multiple independent consulting firms to study the feasibility of what's been proposed.
Two other firms responded to the department's request for proposals to redevelop the city-owned site: Milwaukee-based New Land Enterprises and The Richman Group, a firm based in Greenwich, Connecticut that was planning on partnering with Milwaukee-based Northernstar Cos., according to DCD.
- Richman Group's $231 million proposal for the site calls for 106 market-rate apartments, 88 affordable apartments, 13,000 square feet of retail space and a 25,000-square-foot amenity area, according to Bauman.
- New Land's $350 million proposal for the site included 192 apartments, a 240-room hotel, 250,000 square feet of office space and 14,000 square feet of retail space, Bauman said.
As the resolution is currently written, the feasibility studies would examine all three proposed projects for the Marcus Center parking structure site, including New Land's, even though the firm
withdrew its proposal from consideration, according to Bauman. New Land withdrew its proposal with managing director
Tim Gokhman expressing frustration and criticism for DCD's handling of the RFP process
"I think (feasibility of The Neutral Project's proposal) is a fair concern, but we have provided our third party market analysis, and it shows a lot of demand for residential units in Milwaukee for 2028 and onwards, for office we have received some calls from potential tenants, there's interest in class A office space," said
Daniel Glaessl, chief product officer for The Neutral Project. "Based on the mixed-use proposal we have in conjunction with the neighborhood that's already there, we can be successful on the site and be very helpful for the city."
Bauman said his primary concerns with The Neutral Project's proposal are related to the development's scale, phasing and The Neutral Project's track record.
Founded in 2020, the firm is currently in the middle of construction on an apartment project in Madison and
began test piles for their downtown Milwaukee apartment project The Edison, located along the Milwaukee River next to the Marcus Center parking structure site. Bauman noted that The Edison was first proposed in 2021 and is yet to start vertical construction.
"I have concerns that project won't even get finished," Bauman said. "Now, to come forward with a project that's substantially larger, I don't think DCD adequately vetted the financial feasibility of what they're proposing. The Neutral Project has basically built nothing anywhere."
Further, Bauman said the city has been burned by phased projects in the past, citing the Harley-Davidson Museum site redevelopment, which was supposed to include 100,000 square feet of office space that never materialized.
“We picked (The Neutral Project's proposal) because we think it’s spectacular," commissioner of city development
Lafayette Crump said. "We want to grow this city. The mayor has said that Milwaukee shouldn’t settle for being stagnant. If that is going to happen, we need to have housing for all those people. It’s been universally talked about how beautiful The Neutral Project’s development is, how it is aspirational for what Milwaukee can achieve. It thinks big, it maximizes tax base, it’s dense, it ties the area together with paths.”
Crump added that
DCD believes the project to be feasible, but that the department has proposed a one-year period of due diligence and negotiation with The Neutral Project to further examine its feasibility.
If an independent review finds The Neutral Project's proposal infeasible, Bauman said he'd like to see the process start over again.
"Go back to the drawing board and issue a new RFP," he said. "I was a little surprised that we only received three proposals. If this site is so valuable and as valuable as everybody claims, then you would have thought it would have generated greater interest nationally than just three proposals."
When asked what he'd like to see done differently in another RFP process, Bauman said, "I'd have to think about that."
Bauman's resolution will likely be examined and voted on by the Zoning, Neighborhoods and Development Committee at its September meeting and, if passed, would go to the Common Council, which could take up to six months, according to Bauman. Mayor Cavalier Johnson could veto the item.
Separately, the Common Council will have to give DCD permission to enter the contractual relationship with The Neutral Project to begin the due diligence and negotiation process.
"I have been given five pieces of paper regarding this process," Bauman said. "I have a rendering of the Richman project, rendering of the New Land project, and two renderings of The Neutral Project's. I have one piece of paper describing the proposals from a 30,000-foot view. I don't think there's eight votes in the council to grant the right to negotiate with The Neutral Project without knowing more information."
The Richman Group and Northernstar Cos. did not respond to requests for comment.
