If an Interstate 94 freeway interchange is added at Drexel Avenue, it could provide a boost to efforts to redevelop the former Delphi property in Oak Creek and to redevelop South 27th Street as a major commercial corridor.
The interchange also would make it easier for people to get to Northwestern Mutual Life Insurance Co.’s Franklin campus at South 27th Street and Drexel Avenue.
According to sources, a deal is being negotiated with state and local officials for funding to build the Drexel Avenue interchange. Sources tell BizTimes Milwaukee that Northwestern Mutual will cover some of the local matching funds for the project.
Sources say Northwestern Mutual needs the exit ramp to serve its sprawling Franklin campus. The company also has acquired several parcels of land surrounding the campus, and a freeway exit at Drexel Avenue would add commercial value to the properties.
However, Jean Towell, a spokeswoman for Northwestern Mutual, said Northwestern Mutual is “not part of those discussions” about the interchange.
Reggie Newson, southeast region operations director of the Wisconsin Department of Transportation, said there is still “no deal” in place to provide funding for the interchange.
Still, other sources said an agreement for the Drexel Avenue interchange plan could be announced soon.
A Drexel Avenue interchange, which would be located between the Rawson Avenue and Ryan Road interchanges in Oak Creek, could have a significant impact on several key commercial real estate sites.
Northwestern Mutual’s Franklin campus is located on an 84-acre site northwest of Drexel Avenue and South 27th Street. About 1,700 people work in the 865,000-square-foot complex. The company’s long range plan for the Franklin campus is to expand it further to 1.2 million to 2 million square feet of space.
In addition, the company owns about 118 acres of property on the east side of South 27th Street, in Oak Creek. A Drexel Avenue interchange would enhance the development potential of that property and other nearby vacant acreage.
“The elephant in the room (regarding the Drexel Avenue interchange) is NML,” said John Henderson, a commercial real estate broker with Brookfield-based NAI MLG Commercial.
South 27th Street is the border between Franklin and Oak Creek. Officials from both cities created a master plan stating that they want to see South 27th Street become a major commercial corridor with large office buildings, hotels and retail developments.
In recent years, several major developments have occurred along South 27th Street. In addition to the Northwestern Mutual Life campus, a 114-room Staybridge Suites hotel, the 275,000-square-foot Wheaton Franciscan Healthcare-Franklin hospital and the Liberty Corporate Preserve business park were all developed along the street.
A Drexel Avenue interchange could improve access to South 27th Street and attract more development to the corridor.
“(South 27th Street provides) an opportunity to attract high-quality development with family supporting jobs,” said Doug Seymour, director of community development for Oak Creek.
Seymour said Oak Creek and Franklin are “very well positioned,” to capture the inevitable growth between Milwaukee and Chicago, he said.
The Drexel Avenue interchange would also improve access to the former Delphi site. The vacant factory, located on an 85-acre site at the southwest corner of Howell and Drexel avenues in Oak Creek, closed in 2008. At one time, 1,450 people worked there.
City officials want to see the factory on the property torn down and the site redeveloped, with a mix use, including a large amount of upscale retail stores.
Last year, Milwaukee-based WillowTree Development LLC planned to purchase the former Delphi property. However, that deal fell through.
Since then, Delphi switched from Brookfield-based Grubb & Ellis|Apex Commercial to NAI MLG Commercial to market the property.
Demolition of the former Delphi plant will begin soon, Henderson said.
The city is probably going to have to provide some tax incremental financing (TIF) assistance to get the property redeveloped, Henderson said. NAI MLG is talking to some potential buyers of the site, but city officials need to indicate what amount of assistance they are willing to provide, he said.
The Drexel interchange will help attract development to the Delphi site but, “it’s not a make or break. It would get redeveloped without it,” Henderson said.
However, Jeff Horn, the broker with Grubb & Ellis|Apex Commercial who marketed the Delphi site previously, said an interchange at Drexel Avenue would make a significant difference in getting the property sold and redeveloped.
“You need that accessibility to the site,” Horn said. “It’s a big deal.”
The interchange will make it easier to get around the area and increase the development potential of Drexel Avenue, Horn said.
“You go down there, and unless you know the area real well, you’re not always sure which exit to take,” he said. “A lot of times I take the wrong one and end up going back. This (interchange) fixes all of that. (Drexel Avenue) could be a major street going east-west if you could access it.”
The interchange will increase development potential for several properties along Drexel Avenue and in other parts of the area, Seymour said.
“It would have pretty significant impacts for a lot of properties and communities on the south shore,” he said. The interchange will improve access to the South 27th Street corridor and reduce traffic on other streets in the area such as Rawson Avenue and Ryan Road, said Franklin Alderman. Steve Olson.
“It certainly is going to help Oak Creek (attract development) right at the interchange,” Olson said. “And it provides an additional way to get into and out of the corridor.”