Amid shifts in the hospitality market, a long-planned hotel in downtown Milwaukee could break ground this summer, according to its architect.
Milwaukee-based development firm
HKS Holdings first proposed a Hilton Tempo hotel at 308 W. Kilbourn Ave. in 2021, but the project has not yet started construction due to redesigns and financing challenges.
That's according to the project's architect,
Ethan Skeels, an associate principal at Milwaukee-based
Kahler Slater, who presented updated plans to Milwaukee's Historic Preservation Commission (HPC) on Monday.
The hotel was
redesigned last year to be one floor shorter than initially proposed by eliminating a floor of indoor parking to reduce project costs, while keeping the room count nearly the same. The changes were granted HPC approval Monday and the hotel will now go before the Board of Zoning Appeals for a final approval, which sets the stage for a summer construction start.
"Depending on the timeline for BOZA, we do now believe we have the construction costs handled, so the hope is that late Q2 — if everything goes swimmingly — we could be in the ground," Skeels said.
The project is not scheduled to be reviewed at the January BOZA meeting and subsequent agendas have not yet been posted.
The redesigned hotel would have 158 rooms, down from the 161 originally planned, and include a first floor restaurant and top floor bar, plans show, as part of the Hilton Tempo's "elevated lifestyle brand."
The Tempo brand is one of the newest Hilton hotel flags, and the Milwaukee location will be among the first half-dozen to open, according to Skeels.
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The hotel is situated across from the Hyatt Regency Milwaukee and Milwaukee County Historical Society, which also has an event space. Rendering from Kahler Slater[/caption]
The hotel's new outdoor parking solution will be used primarily as staging for valet parking, not for overnight guest use, according to Skeels.
"There were some cost issues, as you can imagine, with construction costs being what they are," Skeels told the commission. "Our strategy was removing the indoor parking to remove some costs from the project."
Despite the fact that the hotel would be built on a site that has been a surface parking lot for more than 50 years, the hotel required HPC approval because it is part of the former Milwaukee Journal Sentinel complex. The newspaper properties, most of which have since been redeveloped into housing, were designated historic in 2019.
HKS previously partnered with Kahler Slater on the Kimpton Journeyman Hotel in the Historic Third Ward.
HKS did not immediately respond to a request for comment.
Hotel market adjusts to new traveling trends, financing trends
The Hilton Tempo is the second downtown Milwaukee hotel to contemplate a 2025 groundbreaking as the hotel industry
grapples with a host of post-pandemic challenges.
In the nearby Deer District, Madison-based
North Central Group Hospitality is anticipating a late 2025 groundbreaking for its 162-room Moxy hotel, a Marriott brand. Meanwhile, Milwaukee-based Marcus Corp. is beginning a $40 million renovation of the downtown Hilton Milwaukee, which will include reducing the hotel's room count from 729 to 554 with
Marcus leadership citing, in part, a weak hotel market as reason for the change.
Reports show that downtown Milwaukee's hotel market is yet to rebound to its pre-pandemic occupancy levels — largely driven by the slow return of business travelers — and modest increases in room rates — largely driven by inflation — are not offsetting increased operating and debt costs.
However, demand for new hotels still exists and developers, particularly those with experience in hotel development, are finding financing for their projects despite inflated construction costs and interest rates.
“There’s always the case of guests and customers looking for new experiences, and those new experiences are often provided by new hotels, whether it’s a new brand in the marketplace or it’s the repositioning or remodeling of a hotel to make it more appealing to travelers,” said
Doug Nysse, hospitality industry advisor and director of project and development services with
Colliers | Wisconsin. “That will continue in 2025 and beyond. There will be hotel developers that will find a way to build new hotels for those seeking out new experiences.”
For the Hilton Tempo project, HKS is partnering with
FirstPathway Partners, to pursue $21.6 million in EB-5 financing to help finance the project, according to the FirstPathway website. The EB-5 program allows foreign nationals to obtain a green card in exchange for making an investment in a job-creating project or initiative in the United States. The program has been used to finance other downtown Milwaukee hotel projects, including the Milwaukee Marriott Downtown, which — in another sign of post-pandemic hotel stress —
is currently in bankruptcy.
[caption id="attachment_604703" align="aligncenter" width="1024"]
Hilton Tempo. Rendering from Kahler Slater[/caption]
