Joel Lee, a Milwaukee developer and the owner of Van Buren Management Inc., said he will continue efforts to attract enough tenants for his Washington Square project to do a significant development.
The building would be constructed on the site of a surface parking lot southeast of North Jefferson Street and East Mason Street, across the street from the Pfister Hotel, in downtown Milwaukee.
Last year the Godfrey & Kahn law firm announced that it had signed a lease to move into 90,000 to 100,000 square feet of space in the Washington Square project and accounting firm Baker Tilly Virchow Krause said it had signed a letter of intent to move into 60,000 square feet of space in the project.
Lee was working on the Washington Square project in a joint venture with Wauwatosa-based Irgens Development Partners LLC.
However, despite the commitments from Godfrey & Kahn and Baker Tilly, the project has not moved forward. Baker Tilly shifted gears and decided to move into an existing building downtown. Earlier this week the firm said it will move to the U.S. Bank Center at 777 E. Wisconsin Ave.
“We pinned a lot of hopes on Washington Square, but when that project stalled we started looking at other options downtown,” said Bill Wertz, partner and market leader of Baker Tilly’s Milwaukee office. “We simply had to move on.”
“It became apparent to us there was disagreement between the landowner (Lee) and the developer (Irgens) as to size, scope and timing of the project,” Wertz said.
Lee said he is determined to do a major project on the site. Godfrey & Kahn and Baker Tilly combined for 150,000 square feet of space, but that was not enough to do the project that Lee wants to do. He declined to say how big he wants the building to be, but renderings of the project by Rinka Chung Architecture show a 30-story building.
“When there is enough critical mass to do the size building we want to do we will go ahead,” Lee said. “We just think the site warrants a building bigger than 150,000 square feet. Baker Tilly was not going to give us the critical mass within the time frame they wanted.”
Jackie Walsh, who has led the project for Irgens, could not be reached for comment.
Sources say Godfrey & Kahn has planned to move to a building developed by Irgens. The firms are likely pursuing other options, Lee said.
However Lee said he and Irgens could still do a joint venture together for the Washington Square project if enough tenants ever come together.
In addition to the challenges of finding tenants willing to pay the high rents to support a new project, it is difficult to get financing, Lee said. If the project had commitments from national tenants it could get financing with 60 to 70 percent of the space pre-leased, he said. But with only local tenants the project likely needs to be 80 to 90 percent pre-leased, he said.