The revitalization of the Menomonee Valley will take a major step forward this year as the completion of several projects will significantly increase activity there.The most noteworthy development will be the opening this summer of the $95 million, 130,000-square-foot Harley-Davidson Museum, which is being built at the east end of the valley at Sixth and Canal streets. The museum is expected to attract 350,000 visitors each year.
Some of those visitors will likely stay at the Iron Horse, a hotel that developer Tim Dixon is building in a six-story, 100-year-old former warehouse building at 500 W. Florida St., about three blocks south of the Harley-Davidson Museum and just south of the Menomonee Valley. The 102-room boutique hotel, opening this summer, will be designed to appeal to motorcycle riders and other guests.
Also this year, Potawatomi Bingo Casino will complete the $240 million expansion of the Menomonee Valley casino. The expansion project will add 500,000 square feet to the casino, tripling its total size. Like the Harley Museum, the larger casino could help attract more visitors to Milwaukee. The casino will hire an additional 1,000 people to work at the expanded facility.
However, manufacturing remains the backbone of the Menomonee Valley, and the city’s revitalization efforts are finally coming to fruition as several additional firms are expected to move in this year.
Milwaukee-based HSI Development Partners LLC plans to build a 160,000-square-foot facility in the Menomonee Valley for Derse Inc., which will move there from Wauwatosa. Derse, best known for manufacturing high-tech, large-scale exhibition booths, will bring about 160 employees into the valley.
Taylor Dynamoter Inc. will move from New Berlin to a new 43,350-square-foot facility that is under construction in the Menomonee Valley Industrial Center (MVIC) at the west end of the valley. Derse’s facility will also be in the MVIC.
Also this year, Ziegler-Bence Development will complete construction of a 144,000-square-foot multi-tenant industrial building on the former Milwaukee Stockyards property at 1221 W. Canal St. Menomonee Falls-based Proven Direct plans to move to the building and will occupy about 80,000 square feet of space.
In addition, Professional Placement Services LLC recently purchased the 16,016-square-foot building at 272 N. 12th St., Milwaukee, in the Menomonee Valley and plans to move there from its current location in Milwaukee’s Third Ward at 316 N. Milwaukee St. The company, a collection agency, will occupy the 8,000-square-foot top floor of the building. The 8,000-square-foot first floor will be made available for lease.
The valley has added 2,100 jobs since 1998 and developments in 2008 will bring in another 2,000 jobs said Laura Bray, executive director of Menomonee Valley Partners Inc.
“That has (positive) economic ramifications for the neighborhoods surrounding the valley,” she said.
Other significant industrial developments in the region for 2008 include plans by Cudahy-based Steinergroup Inc. to build a 486,000-square-foot distribution center for GE Healthcare in Muskego. Construction will start this year.
Also, WT New Berlin I LLC is building a 360,000-square-foot office and industrial building for Buyseasons Inc. at 5915 S. Moorland Road in New Berlin. The project will be completed this year.
Chicago-based First Industrial Realty Trust Inc. is building a 600,000-square-foot distribution center on a vacant site northeast of 52nd Street and 88th Avenue in Kenosha, for Vernon Hills, Ill.-based Rust-Oleum Corp.
Sacramento, Calif.-based Panattoni Development Co. is building a 626,784-square-foot speculative industrial building on a 38-acre site at 10100 58th Place in the Business Park of Kenosha.
Chicago-based CenterPoint Properties plans to build three more speculative industrial buildings in Pleasant Prairie along Interstate 94. The first building in the development will be a 453,000-square-foot structure that will feature warehouse, distribution and office space on approximately 30 acres of land.
Park East corridor gaining momentum
Development is also expected to pick up this year in the Park East corridor on the northern edge of downtown Milwaukee.
Two major projects are already under construction near the corridor: the North End development at the site of the former Pfister & Vogel tannery and the Pabst brewery redevelopment.
Joseph Zilber, the founder of Milwaukee-based Zilber Ltd., is redeveloping the 20-acre Pabst complex into a mixed use neighborhood. Zilber is cleaning up and gutting several of the buildings in the Pabst complex and is selling them to other developers. Zilber may redevelop some of the buildings in the complex himself.
“We’re doing much better than we anticipated,” said Mike Mervis, Zilber’s assistant. “We have (potential buyers) looking at every building and every building site. We have potential customers for every single piece of the project.”
Zilber has announced sales for some of the buildings in the complex and three to four more deals could be announced this year, Mervis said. The first tenants should move into the complex this year into the former Boiler House building that is being redeveloped by Max Dermond and Charles Trainer. AMB Development Group LLC, Inland Companies Inc. and Albion Group Architects all plan to move into the 55,000-square-foot Boiler House building at 1243 N. 10th St.
Milwaukee-based Mandel Group Inc. is building the North End development, which will have 483 housing units and about 25,000 square feet of retail space when it is completed in five to seven years. Construction on the first phase of the project, with 83 apartments and 15,000 square feet of retail space, will begin this year.
Other ongoing development in the Park East corridor includes the 14-story building under construction at the southeast corner of North Water Street and Juneau Avenue by Fort Myers, Florida-based Development Opportunity Corp. The project will include a 121-room Staybridge Suites hotel, 31 condos and 14,000 square feet of retail space. The project is expected to be completed this year.
Legacy Real Estate Development LLC is nearing completion of its 38-unit condominium development at 1545 N. Jefferson St., called The Flatiron.
Several other Park East corridor developments are expected to break ground this year.
Chicago-based RSC & Associates LLC plans to build a 122-room Hyatt Place hotel and a 102-room Hyatt Summerfield Suites hotel on a two acre site bounded by Milwaukee, Jefferson and Lyon streets and Ogden Avenue in the Park East corridor. The project will also include 6,900 square feet of retail space and 105 apartments, most of which will be built later.
Ruvin Development Inc. and Dallas-based Gatehouse Capital Corp. are hoping to break ground this year on a pair of Park East developments at Old World Third Street and Juneau Avenue. At the northwest corner of the intersection the developers plan to build a 176-room luxury boutique hotel, 70 luxury condominiums, 55,000 square feet of office space and 17,000 square feet of street level retail space. The hotel will be a Hotel Palomar, operated by San Francisco-based Kimpton Hotel & Restaurant Group LLC. The company also has Hotel Palomar locations in Dallas, San Francisco, Washington, D.C. and Arlington, Va.
At the northeast corner of the intersection, Ruvin and Gatehouse plan to build a 160-room Aloft Hotel, nine condominiums and 5,000 square feet of street level retail space.
Rob Ruvin, the owner of Ruvin Development, said the 8-story Aloft project should break ground in March and the 24-story Kimpton hotel project could break ground in July. Financing is in place for the Aloft project, but only the equity financing has been obtained for the Kimpton hotel project.
“Projects under $100 million are easier to finance than ones over $100 million,” Ruvin said.
At the southwest corner of the intersection developer Rick Barrett plans to build a 30-story mixed-use building called The Moderne with about 80 condominiums, 16,000 square feet of first floor retail space and possibly a 120 room hotel.
Office development
The Milwaukee area office market has shown some signs of improvement in recent months, but overall remains soft largely because of the region’s anemic population and job growth.
The downtown Milwaukee office market could get a boost this year because the Marquette Interchange reconstruction project is expected to finally be completed in November. The project has gone smoothly and avoided major traffic problems. However, concerns about the project’s impact on downtown traffic may have deterred some suburban firms from moving downtown. The completion of the project could encourage more suburban office space users to consider moving downtown.
Some suburban firms are already moving downtown. Last year Manpower Inc. moved its corporate headquarters to a new downtown building. Later this year, Infinity HealthCare plans to move from Mequon to downtown Milwaukee and will occupy 62,000 square feet of space in the Chase Tower at 111 E. Wisconsin Ave. Racine-based Optique Capital Management Inc. says it will move to downtown Milwaukee, but has not announced which building it will move to.
Major office developments in the suburbs include Northwestern Mutual Life Insurance Co.’s six-story, 400,000-square-foot expansion of its Franklin campus at South 27th Street and West Drexel Avenue. The project will be completed later this year. The company will move about 1,000 employees from downtown Milwaukee to the new addition in Franklin.
West Bend Mutual Insurance Co. is building a $57 million, 194,000-square-foot addition to its headquarters at 1900 S. 18th Ave., which will also be completed this year.
Construction is expected to begin this year on a new corporate headquarters for Waukegan, Ill.-based Uline Inc. The company plans to move to a 200,000-square-foot facility that it will build southwest of I-94 and Highway 165 in Pleasant Prairie, bringing 1,000 jobs to Kenosha County by 2010.
Hotel development
Several hotels have been proposed in the metro Milwaukee area during the last couple of years. A few of them are actually being built, and more could be under construction this year.
In addition to the Park East corridor projects, two other hotel projects have been proposed for downtown Milwaukee and could start construction this year.
Charlotte, N.C.-based The Ghazi Co. plans to build a development called Catalyst with 150,000 square feet of retail, restaurant and entertainment space, a 29-story residential tower with about 200 units, a 13-story hotel tower with about 160 rooms and a 9,000-square-foot urban plaza on a vacant lot at the corner of North Fourth Street and Wisconsin Avenue, across the street from the Midwest Airlines Center.
Milwaukee-based Gabaldon Properties and North Liberty, Iowa-based Kinseth Hospitality Companies have formed Milwaukee Hotel Associates LLC, which plans to purchase and renovate the Posner building in downtown Milwaukee at 152 W. Wisconsin Ave. They plan to transform the building into a 160-room, mid-scale hotel, likely a Holiday Inn.
Hotels opening in southeastern Wisconsin in 2008 will include:
A 120-room Comfort Suites hotel at 10831 W. Park Place, on Milwaukee’s far northwest side, which is being developed by Oshkosh-based WHG Companies LLC. The four-story, 87,000-square-foot building is being built just northwest of North 107th Street and Good Hope Road, near a Ruby Tuesday Restaurant. The hotel will open this spring and will have a conference room that can accommodate meetings of up to 150 people.
A 198-room Crowne Plaza hotel, which is under construction at 10499 Innovation Drive in the Milwaukee County Research Park in Wauwatosa. The eight-story, 127,000-square-foot hotel will open this spring and will include a full-service restaurant and more than 8,000 square feet of meeting and conference space. It is being developed by KL Hotel LLC.
An 82-room Hampton Inn & Suites hotel, that is being developed by West Bend-based American Design & Build and North Liberty, Iowa-based Kinseth Hospitality Companies at the southeast corner of South 18th Avenue and West Paradise Drive in West Bend. The hotel will open this spring at a site that is across the street from the West Bend Mutual headquarters.
Retail development
Construction is expected to begin this year on the regional mall portion of the massive Pabst Farms commercial and residential development at Interstate 94 and Highway 67 in Oconomowoc. Pabst Farms selected Beechwood, Ohio-based Developers Diversified Realty Corp. to develop the project’s regional mall. Originally, Chicago-based General Growth Properties Inc., one of the nation’s largest mall operators, had planned to build the regional mall at Pabst Farms, but the company dropped out of the project, prompting Pabst Farms to look for a new partner.
The new plan for the regional mall at the Pabst Farms calls for an open-air town center, somewhat similar to Bayshore Town Center in Glendale. General Growth’s plans for Pabst Farms was primarily for an enclosed mall.
Developers Diversified’s plan calls for 2.4 million square feet of gross leaseable space, not including two hotels with 150 rooms each. The development will include: 1.1 million square feet of retail space in the regional mall, called Pabst Farms Town Center; 400,000 square feet of residential space (for 400 units); 300,000 square feet of office space; and four to six big-box stores, with a total of 600,000 square feet of space, on the east end of the property.
The office space and residential space will be built later. Construction of the retail space should begin this year.
Pabst Farms Town Center will have four anchor stores, a 16-screen movie theater, 15 restaurants and a 33,000-square-foot bookstore. Developers Diversified is working on obtaining specific retail tenants.
Pabst Farms already has a Hilton Garden Inn hotel and two more hotels are being planned for the area southwest of I-94 and Highway 67. Add the two hotels planned by Developers Diversifield Realty Corp. and Pabst Farms is expected to have a total of five hotels once it is completely developed.
Other areas that will continue to be hot spots for retail development include the area near the Highway 60 and I-43 interchange Grafton, which is the hottest retail development area in Ozaukee County. A Kohl’s store will open in the Grafton Commons development, located northwest of the interchange. On the east side of the freeway, West Bend-based Design and Build Inc. and Kraig Sadownikow plan to build a four-story, 83-room Hampton Inn & Suites hotel. The project will also include a Water Street Brewery restaurant, similar to Water Street Brewery’s location in Delafield, and a BP gas station.
The Historic Third Ward in Milwaukee continues to attract more stores. The most anticipated addition this year could be the Anthropologie store, which opened recently in a 10,500-square-foot space at 301 N. Broadway.
Rapidly growing Kenosha County also is attracting retail development. Orlando-based Quality Centers could break ground this year for a 700,000 to 1 million-square-foot retail development northwest of I-94 and Highway 50. Indianapolis-based Gershman Brown Associates Inc. plans to build a 364,677-square-foot retail development, anchored by Target and J.C. Penney stores, southeast of Highway 50 and 104th Avenue in Pleasant Prairie.
Commercial real estate Transactions
Leases
Colliers Barry
Dixon Development LLC leased 23,615 square feet of industrial space at 415 S. 3rd St., Milwaukee, from Badger Trailer and Equipment Co. Inc.
B.J. Electric Supply Co. Inc. leased 20,575 square feet of industrial space at N25 W23040 Paul Road, Pewaukee, from CLPF-Pewaukee II LLP.
Dickman Company
Hetzel-Sanfilippo Inc. leased 12,000 square feet of industrial space at N29 W23810 Woodgate Court West, Pewaukee, from Woodgate Court West LLC.
Ogden & Company
Jacki DaVia Massage Therapy leased 660 square feet of space, Five Twelve Group leased 571 square feet of space and Process Arc leased 660 square feet of space in the Northern Lights Building at 1661 N. Water St., Milwaukee, from NL Partners LLC.
RWH Accounting LLC leased 760 square feet of space and More Steam.com leased 460 square feet of space in Ogden Center Bayside at 8850 N. Port Washington Road, Bayside, from Ogden Center.
Pro Driver leased 1,440 square feet of space and the National Guard leased 2,069 square feet of space at 3321 S. Business Dr., Sheboygan, from
HP Holdings LLC.
Momentum-N.A. Inc. leased 6,430 square feet of space in the P.H. Dye House at 320 E. Buffalo St., Milwaukee, from Gardner Group LLC.
Community Relations – SDC – Milwaukee County Residential Weatherization Services leased 8,450 square feet of space at 2460 W. Clybourn St., Milwaukee, from J&R Property Holdings LLC.
Milwaukee County Historical Society leased 7,000 square feet of space at 2202 W. Clybourn St., Milwaukee, from Clybourn Investments LLC.
Blue Atlantis Inc. d.b.a. Cavalry Games and Hobbies leased 462 square feet of space at 511 E. Silver Spring Dr., Whitefish Bay, from Diversy Manor.
Siegel-Gallagher
The law offices of Henry Piano leased 2,586 square feet of office space in the Loyalty Building at 611 N. Broadway, Milwaukee, from Stonewater Partners.
Sales
Colliers Barry
Myriad Properties purchased the 16,016-square-foot office building at 272 N. 12th St., Milwaukee, from El Enterprises for $650,000.
K&L Group LLC purchased the 18,500-square-foot industrial facility at 5737 W. Hemlock St., Milwaukee, from Robert Harmon and Jeffrey Johnson.
Brookfield Storage Center LLC purchased 5.75 acres of industrial zoned land in the Wirth Industrial Park at 16580 Pheasant Dr., Brookfield, from Fern C. Franko.
Ted Dragotta purchased the 13,100-square-foot office building at 1659 N. Jackson St., Milwaukee, from Jackson Street Townhouses.
S&M LLC of Mukwonago purchased the 20,000-square-foot industrial building at 2010 Energy Dr., East Troy, from John F. Meyer. The building will be leased to Gemini Racing.
Golden Harvest Inc. purchased the 24,000-square-foot industrial building at 2916 W. Vera Ave., Glendale, from an undisclosed investor.
Dickman Company
S&M LLC of Mukwonago purchased 20,000 square feet of industrial space at 2010 Energy Dr., East Troy, from John F. Meyer.
Badger Lighting & Signs Inc. purchased 55,000 square feet of industrial space at 19355 Janacek Ct., Brookfield, from Bavaria Industries Inc.
Citizens Bank of Mukwonago purchased 16,000 square feet of retail space at 2541 Main St., East Troy, from Cheryl Berg.
Quality Rack and Equipment Inc. purchased 7,900 square feet of industrial space at W229 N2496 Joseph Road, Pewaukee, from Charles P. Barney and Susan J. Barney.
Ogden & Company
Eagle Prairie Inc. purchased the 11,821-square-foot, 85-year-old Warrior Building at 2017-23 W. Wisconsin Ave., Milwaukee, for $540,000 from Maryland Court Apartments LLC.
New construction
VJS Construction Services, Pewaukee, announced that it is the general contractor for the construction of Evangelical & Reformed United Church of Christ in Waukesha. It will replace the original church, built in 1891, which was destroyed by fire in 2005.
Creative Constructors, Menomonee Falls, recently began construction of a 1,378-square-foot Paciugo Italian Gelato store at Brookfield Square Mall.
