Although some real estate industry professionals and observers in Milwaukee have assumed that the proposed Rivianna project is dead, Bob Schultz, the project’s developer, says he is making progress and hopes to break ground near the end of the year. "It’s not dead," Schultz said. Rivianna is a proposed $82 million development, with three 17-story towers. It would be built along the Milwaukee River, east of North Young Street and South Water Street, just south of the Historic Third Ward. The development would have a 62-room hotel, 193 residential units and about 20,000 square feet of retail space.
The project has been delayed because of difficulties obtaining financing. The collapse of the national housing market has resulted in a credit crunch that has made it very difficult for developers to obtain financing for major projects. "It’s been brutal out there," Schultz said. However, Schultz said he has received a letter of intent from a union pension fund for $13 million in equity financing. He said he plans to obtain $6 million in "primary equity" in "various forms" and is also hoping to obtain a $65 million construction loan.
The key to the financing package will be selling the hotel portion of the project to a hotel owner/operator, Schultz said. "The hotel has to be sold," he said. "There’s no doubt about it." Schultz said he is planning to offer the residential units for sale or for lease to own, and he does not think any pre-sales for the residences will be necessary to obtain financing.
Schultz obtained re-zoning for the project, and is in the process of receiving final design approval from the city. The project has been redesigned with a much more glassy appearance by Madison-based Dimension IV Madison Design Group. Construction could begin by the end of the year, Schultz said. "We could possibly break ground by the end of the year," he said. "Probably by the end of the year or early next year."
Schultz said the project will provide numerous "community benefits," including affordable housing units and union workers for the construction project, without a subsidy. "It’s a fair market project, like fair market coffee," he said. "We’re all in this together and you try to (have a project that) raises the entire (community’s) boat."