County stands behind Couture project as financing issues continue

Developer missed Friday deadline for HUD loan guarantee

The Couture
A rendering of The Couture, courtesy of Rinka.

Last updated on August 1st, 2019 at 12:37 pm

The head of Milwaukee County’s Economic Development Division says the county still backs the $122 million Couture residential tower project, despite ongoing delays for the proposed building that would be built on a former county-owned site near the lakefront in downtown Milwaukee.

This follows last week’s announcement from project developer Barrett Lo Visionary Development that it was still working to secure financing for the project and would not meet the Friday deadline to apply for an $80 million U.S. Department of Housing and Urban Development loan guarantee.

Barrett Lo has for years planned to construct a 44-story building at the former site of the county’s Downtown Transit Center, southwest of Michigan Street and Lincoln Memorial Drive. The developer acquired the property from the county in 2016.

“Milwaukee County continues to support (Barrett Lo’s) vision for the property and their efforts to secure investment in the project,” Aaron Hertzberg, Milwaukee County director of economic development, said in an emailed statement.

Even so, the county has until the end of 2020 to either deliver transit amenities to that site or pay back a $6.7 million grant it had received from the Federal Transit Administration to build the transit center. Hertzberg said county staffers are working with the FTA “to consider if an extension of the timeline to deliver transit amenities is appropriate.”

The Couture project would include a transit hub featuring stops for both the county’s planned Bus Rapid Transit system and the city of Milwaukee streetcar’s lakefront line extension.

FTA officials did not immediately respond to a request for comment.

Hertzberg said the county still has the ability to take back ownership of the site from Barrett Lo, but declined an interview request to provide further details. Brian Rothgery, a spokesman with the County Board of Supervisors, said in an email that none of the supervisors were interested in commenting on the project.

First unveiled in 2012, The Couture has faced numerous delays, starting with a years-long battle over the development rights of the site.

The FTA in spring 2016 agreed that Barrett Lo could purchase the county transit center at a discounted price of $500,000. At the time, the property had an appraised value of $8.9 million. Today, it is assessed at nearly $12.9 million, according to city records. The FTA had the final say because of a 1988 agreement that helped finance the transit center.

The project reached what Barrett Lo founder and chief executive Rick Barrett described as a “major milestone” in November, after HUD asked the developer to submit additional information for its loan guarantee application. This signaled the project could have soon moved forward with its needed financing.

Since that time, Barrett Lo has sought multiple extensions to its deadline to complete that application. The developer was initially given a deadline of Jan. 26, but was unable to do so and was granted an extension to May 27. HUD then granted another extension to last week Friday.

In a statement issued the day of the deadline, Barrett Lo founder and chief executive officer Rick Barrett said his firm will voluntarily allow the HUD application deadline to expire as it continues working on securing its last piece of financing.

“Once we complete the capital stack, we will resubmit an application through HUD’s Direct-to-Firm Program, which provides for a shortened review timeframe,” Barrett said.

Barrett recently said he needs to secure $15 million in financing to get construction going for The Couture.

Meanwhile, the city faces deadlines of its own related to the streetcar’s Lakefront Line.

Contractors have installed track along Michigan Avenue and Clybourn Street essentially up to the point where the streetcar would turn around at the Couture site. But in order to complete that work, the Couture project would need to have at least reached a point that would allow the city to place a temporary stop on Clybourn Street and run through the site while construction progresses. That’s according to city Public Works Commissioner Jeff Polenske, who briefed members of the Public Works Committee earlier this summer on the city’s options with the lakefront line.

Another option would be to instead extend the streetcar’s Lakefront Line across Lincoln Memorial Drive and have it loop around at the Discovery World museum a block further east. This would require additional planning and engineering work. DPW officials have said the deadline for beginning that work is the end of August.

Polenske said the department still expects the Couture project to move forward, meaning this Plan B for the Lakefront Line would not be needed.

“We remain optimistic that the Couture project will secure the necessary financing to move forward,” Polenske said in a emailed statement. “Once that has been finalized we will continue to coordinate with the developer and their contractor on a schedule to complete the Lakefront Line while the Couture is being constructed.”

Alderman Robert Bauman, who represents the downtown area and heads the Public Works Committee, expressed frustration by what he sees as a lack of preparation from the department on an alternative route.

Bauman said he’s asked about a Plan B with Mayor Tom Barrett’s administration and DPW about in private and public meetings over at least the last nine months. He said he has so far seen nothing, not even a conceptual drawing of an alternative route.

“It is totally incompetent to have not worked on a Plan B starting nine months ago when there were clearly challenges with the financing packages (for The Couture),” he said on Tuesday following a Common Council meeting. “Now we’re up against a deadline, aside from the ridiculous appearance of two stub tracks sitting in the middle of the street, unused. Big money has been spent to build those two lines on Clybourn and Michigan. Probably $10 million has already been spent, and it’s going nowhere. It’s unused. I’m just flabbergasted by it all.”

At least one other city official, Alderman Bob Donovan, has outright called for The Couture project to be abandoned.

“The site should be evaluated, properly packaged, and put out as a request for proposals,” he said. “With all the development going on downtown, surely someone can do better than the nothing we’ve seen for the past seven years.”

Any such reconsideration would have to come from Milwaukee County.

The Couture project is set to receive $17.5 million from the city through tax incremental financing. This money would go toward public improvements such as the public transit concourse, visitor walkways, pedestrian amenities and publicly accessible plazas, according to city documents.

Jeff Fleming, spokesman for Milwaukee’s Department of City Development, said there is no pressing timeline for completing The Couture’s public-infrastructure improvements that the city is financing.

“The Department of City Development believes the project will be completed,” Fleming wrote in an email.

Get our email updates

Alex Zank
Alex Zank covers commercial and residential real estate for BizTimes. Alex previously worked for Farm Equipment magazine and also covered statewide construction news at The Daily Reporter. He graduated from the University of Wisconsin-Eau Claire, where he studied journalism, political science and economics. Having grown up in rural western Wisconsin, Alex loves all things outdoors, including camping, hiking, four-wheeling and hunting.

No posts to display