With financing coming into place and the last office tenant moving out, developers are eyeing an October construction start for the conversion of the
100 East office tower in downtown Milwaukee to apartments.
The 35-story building, located at 100 E. Wisconsin Ave., has been steadily vacating since 2020 as office tenants have found space in newer buildings. After falling into foreclosure, the building was acquired in 2023 by a development team comprised of Milwaukee-based
Klein Development and
Mo's Restaurants John Vassallo, who have planned to convert the property into a residential building.
The redevelopment is expected to cost $165 million and will include 373 apartments, 75 of which units will be designated as “workforce housing” for tenants earning up to 100% of Milwaukee’s area median income (AMI).
On Thursday, Milwaukee's Redevelopment Authority unanimously approved $14.4 million in tax incremental financing (TIF) for the project. That financing will add to a first mortgage, historic tax credits and other equity sources that the developers have assembled for the project, according to documents from the city's Department of City Development (DCD).
The TIF proposal still needs Common Council approval.
The project is the first to be supported under DCD's updated TIF guidelines, which were unveiled in April. That new plan expanded eligibility for TIF to include conversions of obsolete commercial buildings into housing and projects that include workforce housing units, which are units set aside for renters making between 60% and 100% of the AMI. For reference, 100% AMI in Milwaukee County equals $77,500 for an individual or $110,700 for a family of four, according to federal data. Previously, the city only considered TIF for housing projects that included units for those earning less than 60% of the AMI, which is generally referred to as affordable housing and usually subsidized by the state or federal government.
DCD Commissioner Lafayette Crump said the TIF support "signals that the City of Milwaukee will do what it takes to grow the tax base and to provide housing for current and future residents."
At the Redevelopment Authority meeting, city staff said the conversion project helps meet several city goals of growing population downtown, preserving existing buildings when possible and incorporating below-market-rate housing.
"A vacant office building, an iconic building at that, in the heart of downtown Milwaukee is never a good thing," said
Joe Klein of Klein Development.
According to Klein, the completed building will include 84 studios, 202 one-bedroom units, 79 two-bedroom units and eight three-bedroom units. Under current figures from Department of Housing and Urban Development, rents would range from $1,937 for a studio to $2,878 for a three-bedroom unit.
The first floor of the building, which was occupied by a Wells Fargo bank branch until June, will be converted into a lobby and amenity space, including a fitness center, spa and coworking space. Floors two through nine are parking for residents, with spillover parking available at an attached parking structure, and the eleventh floor will include more amenity spaces, including a pool.
"100 East is hands down one of my favorite buildings downtown," Ald. Lamont Westmoreland said. "The design, the presence, it's iconic. I was really happy to hear that Klein Development came to the rescue. I've had a chance to meet their team and see some of the work they've done. Let me tell you, my opinion is that they get it. As a city, I think this is exactly the type of team we want leading redevelopment projects such as this."
Under DCD's proposal, the TIF will be developer-financed, which means the city only provides the funding incrementally based on an increase in the property's assessed value over its current value. The repayment period would be for a maximum of 16 years with 6.2% annual interest.
"Not only is there a housing crisis in the City of Milwaukee, but broadly a financing crisis with respect to building housing across the country," Crump said.
Crump emphasized that support for the early projects under the new TIF guidelines is crucial to the long-term success of the new TIF program, which has received backlash from area developers for not being sufficient enough to address modern financing realities.
While most of the 100 East building's larger tenants have moved to other office buildings downtown, such as Marcus Corp. and Gruber Law Offices, the last remaining tenant in the building is Northwestern Mutual affiliate Holter Financial Group, according to the developers.
Pending the October construction start, the building could be fully converted to apartments by the end of 2027.
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