Developers still waiting for city’s Park East plan

    Real estate brokers and developers interested in the Park East Freeway corridor are at a standstill, waiting for the city to make final decisions about a redevelopment plan and a proposed community benefits ordinance.
    The redevelopment plan covers 60 acres in the freeway corridor and adjacent properties. The city owns about four acres in the corridor, and Milwaukee County owns about 16 acres.
    The plan lays out specific, detailed criteria for how development should occur on each block in the Park East area. The city’s Redevelopment Authority, the Plan Commission and the Zoning, Neighborhood and Development Committee each have approved the plan. In late January, however, the full Common Council sent the plan to the Steering and Rules Committee, where it has languished ever since.
    Until the plan is approved, development cannot proceed because there are no regulations in place for what can and cannot be built.
    "Everything is still in somewhat of a holding pattern to see what is going to happen to the final redevelopment plan," said James Barry III, president of James T. Barry Co. "I think it’s ridiculous the government has dragged its feet as long as it has. That has just put off development that would add to the tax base."
    Michael Fardy, partner for Inland Companies, said his commercial real estate company is planning to move its offices downtown and would have liked to move into the Park East corridor, but the city’s approval process has taken too long.
    "It’s just not moving quickly enough for our time frame," he said. Inland will find another downtown location for the company’s offices.
    Also being held up in the Steering and Rules Committee is the proposed community benefits ordinance, which has been criticized by several developers and the Department of City Development, who say it would discourage development in the Park East corridor.
    "The thing that is putting developers off is what kind of mandates the city is going to put on the development," Fardy said. "The market is just kind of waiting to see what is going to happen. We’re hoping for the city to decide to let the market bear what should go there."
    If adopted, the community benefits ordinance would require developers to provide affordable housing for residential projects built on city-owned land and pay a prevailing wage, at union pay levels, for projects receiving direct financial assistance from the city.
    Supporters of the ordinance plan to ask the Milwaukee County Board to approve a similar ordinance providing for affordable housing on county-owned land.
    The Good Jobs and Livable Neighborhoods Coalition, a coalition of church, community and labor groups, is lobbying for the community benefits ordinance.
    "Our intention is to try to do as much as me can to improve the city, using economic development as a mechanism," said Kathleen Mulligan-Hansel, co-chair of the coalition and director of the working families project for the Institute for Wisconsin’s Future.
    However, Barry said the ordinance would drive developers away from the Park East corridor. Downtown property already is at a disadvantage for development compared with the suburbs because of higher property taxes and limited parking, Barry said.
    "At the end of the day it will place additional cost and regulatory burdens that will have the effect of inhibiting development," Barry said. "It’s more expensive to develop down here. If you add additional economic and regulatory obstacles, then you have a recipe for shutting down development."
    "You don’t want to drive potentially very good development to other areas, potentially outside of the city," Fardy said.
    The council might not take action on the proposed community benefits ordinance until after the April 6 election, when voters will choose a new mayor between acting Mayor Marvin Pratt and former congressman Tom Barrett. The two mayoral candidates have differing views on the community benefits ordinance proposal. (See story on page 6)
    Milwaukee County Executive Scott Walker said he opposes the idea of having a community benefits agreement tied to development of the county-owned land in the corridor. Instead, Walker is proposing the creation of a fund from the sale of the county land to provide loans as incentives for developers to pay living wages and provide affordable housing.
    "It’s really the carrot vs. the stick approach," Walker said. "With the (loan fund) being the carrot, as opposed to the stick approach of the community benefits ordinance."
    City of Milwaukee Comptroller W. Martin Morics also has raised concerns about the community benefits ordinance. In a letter to the common council, Morics questioned whether or not the ordinance would actually achieve the goals its supporters are trying to accomplish.
    "Clearly, the provisions of the ordinance are well-intentioned, however, my primary concern is the ordinance’s adverse impact on development, and consequently the city’s property tax base," Morics said in his letter. "While certain developments may proceed within Milwaukee regardless of these added costs, other projects will certainly be lost to other communities. The ordinance, therefore, will increase the cost of development in the city and inhibit tax base growth."
    Mark Eppli, professor and Robert B. Bell Sr. chair in real estate at the Marquette University College of Business Administration, said a community benefits agreement will make it more difficult to attract much-needed jobs to the Park East corridor.
    "To place additional restrictions on that particular land will create an uneven playing field for that land and, you watch, it won’t get developed or it will be developed much slower," Eppli said. "If real estate development in the city is not competitive with that of the suburbs, there will be few, if any, jobs created."
    Mulligan-Hansel said she and other supporters of the community benefits ordinance do not want to discourage development. Developers typically complain when community benefits ordinances are proposed, but they have been successful in other cities such as Los Angeles, Mulligan-Hansel said.
    "Everybody wants the downtown area to be developed and be developed well, but we have to be more nuanced in what we could be doing," she said.
    Mulligan-Hansel said she would like to see developers make counter proposals to the community benefits ordinance, rather than simply opposing everything in it.
    "We’re not going to be scared off and say we’re not going to ask for anything," she said.
    Meanwhile, as real estate brokers and developers wait for politicians to approve the Park East redevelopment plan and decide whether or not to adopt the community benefits ordinance, work to prepare the area for development continues, said Michael Wisniewski, senior economic development specialist for the Department of City Development.
    That includes construction of the Knapp Street bridge, which should be completed in late spring or early summer, Wisniewski said.
    At the earliest, development in the Park East area could begin this fall, "if everything works well," Wisniewski said.
    Milwaukee County has received a $60,000 grant to remove contamination from the Park East land and is applying for more federal funding to help pay for cleanup work, Walker said.
    Wisniewski said any contamination in the Park East area is expected to be minimal and will not be a major obstacle to development.
    "There are no show-stoppers in the property at all," he said. "We know what’s there. It’s all contaminants consistent with an urban neighborhood. This is pretty good stuff to build in."
    The detailed redevelopment plan, as proposed, calls for a mixture of residential, office, retail and entertainment uses for the Park East area.
    William Hatcher, Milwaukee County director of economic development, said the county has received numerous inquires about land in the Park East area from developers and businesses.
    "If you rattle off (the names of) the five biggest developers in the area, we get calls from them periodically," Hatcher said. "We’re seeing some interest in retail on the east end, and we’ve gotten some contacts from entities interested in entertainment venues."
    Juneau Avenue is expected to attract numerous entertainment uses, mostly bars, restaurants and clubs, because it connects the Water Street entertainment district with the Bradley Center and the Pabst City entertainment complex planned for the former Pabst brewery, Wisniewski said.

    March 5, 2004 Small Business Times, Milwaukee

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