Milwaukee has arrived, now what?

Developers say region has opportunity to reach new heights

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Last updated on November 21st, 2019 at 11:03 am

It is an exciting time for Milwaukee.

After decades of stagnation and a national perception of it being flyover country, the Milwaukee area in recent years has attracted numerous major developments downtown and in suburban areas.

At the same time, the city suddenly finds itself in the spotlight with a newfound level of national and international attention. The 2020 Democratic National Convention will bring an unprecedented level of media coverage and new visitors to Milwaukee. The city’s long-slumbering sports scene has been jolted to life by two of the nation’s biggest sports stars: Giannis Antetokounmpo of the Bucks and Christian Yelich of the Brewers. The 2018 National League Championship Series and the 2019 Eastern Conference Finals brought new excitement and attention to Milwaukee. And even more could be on the way in 2020, which will include the Ryder Cup at Whistling Straits in Sheboygan County.

With so much attention on Milwaukee now, what do the media and the surge of new visitors coming here see when they experience Milwaukee for the first time?

Downtown has newfound vibrancy. The skyline was dramatically altered by the Northwestern Mutual Tower & Commons project in 2017. Then came the Bucks’ new home, Fiserv Forum, which opened in 2018 and has not only been great for the Bucks, it has also delivered on its promise to be much more than a basketball arena, booking far more major concerts than the Bradley Center. Development and activity around the arena has transformed that corner of the city.

The downtown area has also seen new apartments, hotels and office buildings in recent years. The BMO Tower, which is being constructed southeast of Wells and Water streets, is set to be completed by the end of the year, offering Class A office space with floor-to-ceiling glass windows. The Huron Building, located just a few blocks south at the northwest corner of Clybourn Street and Broadway, will bring new life to a quieter part of downtown.

Also, the former Grand Avenue mall is being turned into a mixed-use center consisting of apartments, office space and a food hall, continuing the overall rebirth of the downtown area west of the river. Across the street, the former Warner Grand Theatre is being transformed into a new performance hall for the Milwaukee Symphony Orchestra.

The suburbs are undergoing plenty of change as well. Oak Creek has its new downtown in Drexel Town Square, landed the state’s first Ikea, and will soon be home to a new Amazon fulfillment center. In recent years, the suburbs also have welcomed major mixed-use projects like The Corners of Brookfield, The Corridor in Brookfield, Mayfair Collection in Wauwatosa and 84South in Greenfield.

But despite all of the positive momentum, Milwaukee still faces major issues, including long-standing racial inequality and stagnant population growth.

Even so, now with all of the attention the city is getting and will get next year, this is the prime opportunity for Milwaukee to take on these issues and attempt to reach another level of prosperity, business and civic leaders say.

“There’s an interesting moment of honesty that we get to present to the world (due to the DNC), and it’s going to be, I think, important that we don’t message it all with positive spin,” said Blair Williams, president of Milwaukee-based WiRED Properties. “It’s going to be important that we own our shortcomings and, even more importantly, arrive at some kind of tactical approach to presenting and owning those shortcomings with plans for how we can start to overcome those pitfalls.”

Shifting attitudes, national spotlight

Steve Palec, a 35-year commercial real estate veteran who recently left his job as an office broker to join Milwaukee-based Irgens Partners LLC as chief marketing officer, said he has witnessed a change in attitude about Milwaukee and what it can be over the past five years.

“There has been a seismic shift that has said, ‘No, we are not a tertiary city anymore. There is nothing we can’t do.’ And I really believe that is underway,” he said.

Palec said people dreamed big things for Milwaukee during the first part of his career. He pointed to developers like Gary Grunau, Barry Mandel and Mark Irgens as having an attitude of, “Why not?”

“The only difference is today, I think it’s amplified by just so many more people,” he said. “Not a day goes by where I don’t see or run into dozens of people that emulate the characteristic that was really in short supply in Milwaukee.”

The attention Milwaukee has gotten from the recent deep playoff runs by the Bucks and Brewers and the attention that will come from the DNC and Ryder Cup can even help encourage national investors to take a new look at opportunities in the region.

Kalan Haywood Sr., president of Milwaukee-based Haywood Group LLC, said when the Brewers were in the playoffs in 2018, he received phone calls from lenders and equity partners he hadn’t talked to in years. They reached out specifically because the Brewers were on their TV screens.

“Some of those phone calls are (from) people we’re actually doing deals with now,” he said.

Milwaukee’s reputation can only stand to benefit when a national audience sees a packed entertainment block just outside of the Fiserv Forum, as was the case last year when the Bucks made a deep run in the playoffs.

The national attention being paid to Milwaukee will likely never be greater than during the DNC.

“I think (the DNC) will give people more fire in their belly to talk up where they live and how they feel about it,” said Mike Mooney, principal, chairman emeritus and co-founder of Brookfield-based MLG Capital.

Those marketing Milwaukee will have ample opportunity to get their message out through newspaper, TV and social media coverage to spread the message.

“It’s going to be an endless array of ammunition that can be re-generated to brag about and create an appealing aura of Wisconsin,” he said.

Milwaukee’s challenges

Even if the general attitude surrounding the Milwaukee area has changed in recent years, and it’s enjoying plenty of new national exposure, the long-standing issues, including central city poverty and racial segregation, are still there.

One key challenge for the region is its extremely slow population growth.

All of the people migrating into downtown to live in the new multi-family developments that are popping up? They are not really new residents; they’re largely young professionals and empty-nesters moving inward from outlying neighborhoods and the suburbs, said Williams.

While developers still benefit from that movement, it isn’t necessarily a net gain for the region, he said. This results in growth in household formation without population growth.

“Milwaukee’s regional population just doesn’t change,” Williams said.

Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce, said Wisconsin for the next few decades is set to grow its population by only about 1%. The same can be said for the Milwaukee area.

But getting more people to move to the region is easier said than done.

Mooney recalled discussions he’s had with major area employers, who told him they had trouble getting workers to move here from other parts of the country. But once they’re here, they want to stay.

“We here in Wisconsin have spent too little time over the last five decades promoting our area as a great place to live,” he said.

And for the past few decades, most of the movement in the office market has just been a shuffling around of the same companies, Palec said. He added what the market needs is fresh faces.

Greg Uhen, chief executive officer of Milwaukee-based Eppstein Uhen Architects, expressed a similar sentiment. He said other developments, such as new housing, retail and hotels, are more supportive kinds of projects that “don’t necessarily drive the bus.”

“Office (developments) and creating jobs and having companies move to Milwaukee downtown, that becomes a huge driver to populate, especially daytime activity,” he said.

Sheehy said the objective to attract and retain talented workers is to make Milwaukee a place of ample opportunity.

“It may be easier to retain the talent we have than attract new talent, but we’ve got to do both,” he said. “People want to come to a market when they see vibrant opportunities, both for themselves and for other people they’re going to meet.”

Opportunities are easier to come by for certain groups of people than others. The contrast is greatest between white residents and African American or Hispanic residents in the Milwaukee area.

Leaders agree this is one of Milwaukee’s biggest challenges, and it certainly isn’t new.

MMAC recently released the findings of a study highlighting metro Milwaukee’s racial disparities. The study, which was the subject of the Sept. 30 cover story of BizTimes Milwaukee, compared Milwaukee to 20 of its peer metro areas on several measures. It found Milwaukee came in last when it comes to prosperity of African American and Hispanic residents. The prosperity gap between both of those groups when compared to white residents was the widest among its peers.

Milwaukee is also consistently named one of the most segregated cities in the U.S., noted Juli Kaufmann, president of Fix Development.

The Washington, D.C.-based policy group the Brookings Institution in a December report identified the Milwaukee metro area as having the highest black-white segregation.

“The only way this changes is if we in power reflect on our own behaviors, because we are the system and if we want that to be different, we have to change,” Kaufmann said.

There’s also a disconnect between residents who live in Milwaukee neighborhoods outside of downtown, especially those that aren’t seeing much new investment.

“No matter how many cranes we have in the sky downtown … the people that are the have-nots, or perceive themselves as being have-nots or underserved or under-voiced, those individuals still do not feel and see the connections between some of Milwaukee’s downtown success (and them),” Haywood said.

A conceptual rendering depicting a 50-story office building at the now-vacant Lakefront Gateway site and the long-delayed Couture project in downtown Milwaukee.
A conceptual rendering depicting a 50-story office building at the now-vacant Lakefront Gateway site and the long-delayed Couture project in downtown Milwaukee. Credit: Rinka+

Looking to the future

To further improve Milwaukee, Sheehy noted MMAC’s three primary areas of focus: talent, growth and livability.

The talent component is heavily focused on preparing workers in the region for the opportunities that are here today and will be here in the future, Sheehy said.

He added it will also be key to grow business for companies that export goods and services to outside the region. Without those companies, there won’t be more housing, retail, hotel or other commercial developments.

“That’s the only way new income comes in, and if you don’t have new income, you don’t get growth,” he said. “The rest of us are just kind of washing each other’s socks, and we want more socks to wash.”

Sheehy said one selling point is the area has the largest concentration of companies that make and design things, compared to anywhere else in the country.

“That’s our fastball,” he said. “We want to develop other pitches, but (also) growing those opportunities.”

Part of Milwaukee marketing itself means going beyond putting on its best face when people come to town. There needs to be a bigger effort by residents and officials to spread the reputation elsewhere, said Matt Rinka, partner at Milwaukee-based architecture firm Rinka.

“It’s just sort of a concerted effort to think more, I would say, nationally and about how Milwaukee can continue to have time on the national and global stage,” he said. “Every person, if they have that sort of mentality on a day-to-day basis, that we’re part of a bigger community … I think it’s something that will only help Milwaukee to continue its trajectory.”

Milwaukee is set to become more diverse in the coming decades. Sheehy said, by 2025, Milwaukee County will become a minority-majority county. He pointed out that 18% of the metro area’s population aged 55-64 is African American or Hispanic. But 46% of those 5 to 9 years old are African American or Hispanic.

“I think that’s a good thing – the community is becoming more diverse. It’s one we have to embrace and (we have to) make sure we’re preparing those young adults for the opportunities that are here today and are going to be here tomorrow,” he said.

In light of the region’s racial and ethnic disparities, MMAC is setting out to turn things around, in at least one targeted area.

The group has asked its members to sign a pledge agreeing to work toward the goal of increasing the number of African American and Hispanic employees in metro Milwaukee by 15% and managers by 25% by 2025.

Sheehy said nearly 70 companies, which employ 130,000 people, have so far signed the pledge as of mid-October.

“A diverse, inclusive workplace and a diverse, inclusive community is not something you build on compliance; it’s something embedded in your culture,” he said.

Kaufmann said that, in order for people to tackle this issue, they have to start with their own behavior.

“It should be intentional from the beginning, woven throughout and a key strategy in every decision, beginning with what we’re even thinking about doing, before you start doing it,” she said.

There is also the issue of getting the younger people who have moved to downtown Milwaukee in recent years to stay as they decide to grow their families.

Both Mooney and Williams predicted in the coming decades, as more millennials reach the age where they want to have children, they will begin moving back out into the suburbs.

Williams said Milwaukee is missing a few things if it wants to retain a lot of these residents. It needs family supportive housing, such as three-bedroom apartments, a secular private school downtown, and a flagship public school like other communities have, he said.

“We’re missing some of the core elements of a family-friendly lifestyle,” he said.

And to get those living outside of downtown to feel that they’re also benefiting from the development boom, more investment in their neighborhoods is needed, Haywood said.

“That’s when people start to believe, and once people feel a part of the whole plan, then they’re willing to solve some of the problems jointly,” he said.

Haywood is working to redevelop the former Sears department store building on the near northwest side at the corner of North and Fond du Lac avenues into a boutique hotel and conference space known as the Ikon. The project also includes an entrepreneurial hub.

“I’ve had people that are homeowners that live close by given me calls and said, ‘Hey, we were thinking about selling our home and moving but we think we might stay now,’” he said. “Just the idea of what can happen there is getting people excited.”

Kaufmann said such investments will sometimes require developers to see beyond profitability. It’s going to take intention, she said.

“It’s really diversifying your thinking, thinking creatively about your strategies, and then finding the right niche for the developer and neighborhood,” Kaufmann said. “Or maybe it is that it becomes just an intentional outlier. Maybe certain developers don’t totally change their strategy but they recognize their ultimate long-term success is predicated on the success of all.”

A rendering of the Ikon project in Milwaukee, a boutique hotel and conference space being developed at North and Fond du Lac avenues by Kalan Haywood Sr.’s company, Haywood Group LLC.
A rendering of the Ikon project, a boutique hotel and conference space being developed at North and Fond du Lac avenues by Kalan Haywood Sr.’s company, Haywood Group LLC. Credit: Engberg Anderson Architects

What’s in store?

Real estate industry leaders have various ideas of what areas are in need of development or are likely to be developed as Milwaukee writes its next chapter.

One of the greatest opportunities for Milwaukee to make a statement is on its lakefront, according to Rinka. He pointed to two sites that are now vacant: the site at the southwest corner of Michigan Street and Lincoln Memorial Drive, and another site just south of it, across Clybourn Street.

The first site is where the Couture, a 44-story luxury apartment high-rise, is being proposed. But that project hasn’t yet moved forward. As of late October, the development firm for the project, Barrett Lo Visionary Development, was still working to secure the final piece of equity in order to begin construction.

The second site, known as the Lakefront Gateway site, was freed up after the Wisconsin Department of Transportation reconfigured the I-794 freeway ramps there. No formal plans are in place for the site to be purchased and redeveloped.

Rinka’s firm designed the Couture and also recently drew up conceptual renderings depicting a 50-story office tower on the Lakefront Gateway site.

“We need to get the Couture over the finish line,” Rinka said. “I think the Lakefront Gateway site, where we did a conceptual design for the state – what other city has such a prime location on the lakefront? I can’t think of one … To attract a major corporate headquarters to that location to really create a signature project there would be critical.”

Uhen said there are also holes to be filled at the Deer District around Fiserv Forum, continuing southward around the Wisconsin Center and stretching to the existing Post Office building on St. Paul Avenue.

Earlier this year, the Bucks outlined their ideas of how the remaining available sites within the eight-block Deer District, which the team owns, should be developed. These ideas include more retail, residential, a full-service hotel, entertainment and office, specifically a corporate headquarters project.

Nearby, Wisconsin Center District officials are moving forward with plans to expand the convention center. Just across the street is the city-owned parking lot at the southwest corner of Wisconsin and Vel R. Phillips avenues, where the city has tried for years but failed to attract a signature development project.

A Chicago-based developer owns the Post Office building and has plans to redevelop the site with offices, residential, shopping and entertainment. There is vacant land near that building and the Milwaukee Intermodal Station.

“Once we fill these holes in, then you start to create this connectivity where Milwaukee becomes a little more walkable of a city than it is today,” Uhen said of redeveloping that whole stretch of downtown. “One of the things that people like about the Third Ward and Central Business District is they’re very walkable.”

Haywood highlighted the area west of the arena district as a place in need of more attention. The chief obstacle impeding investment and development there is I-43.

He noted the distance between Fiserv Forum and the freeway is the same as the distance between the arena and Walnut Street. However, there is more investment and development activity happening in the areas north of the arena than anything to the west, save for the redevelopment of the former Pabst Brewery complex.

“If that expressway wasn’t there, believe me, people would be building on 13th, and 14th and Vliet (streets) now,” he said.

Kaufmann, meanwhile, spoke more broadly of the main commercial corridors in the city’s neighborhoods.

“If we could think differently about main streets in our neighborhoods, it could radically transform real estate at a small scale, which would have a big impact,” she said.

Reinvestment in these corridors will require a rebuilding of the city infrastructure. The key, she said, is to slow the flow of traffic and to make the streets friendlier to pedestrians.

She pointed to Second Street in the Walker’s Point neighborhood. It was transformed from just a street to get vehicles out of downtown quickly, into a slower, more pedestrian-friendly “complete street” by reducing a driving lane, adding a bike lane and planting trees within the sidewalk. The changes helped spark the redevelopment of buildings along the street, Kaufmann said

“You started to see those old, historic buildings that really represent what Milwaukee’s all about come back to life with all this activity,” she said.

Kaufmann said streets like North Avenue and Fond du Lac Avenue on the city’s north side need similar treatment. They are currently designed to move cars out of town as fast as possible, and about half the historic properties along those corridors are vacant, she said.

“The power collectively of redeveloping 50% vacancies along North Avenue, Fond du Lac (Avenue) would be very interesting to calculate, but I bet it approximates any of these larger-scale developments,” she said. “Imagine the ripple effects in each of these neighborhoods.”

Speaking on a broader scale, Uhen said Milwaukee should look to compete with other regions in the Midwest, such as Indianapolis, Kansas City and Minneapolis. In particular, it has to become a better alternative to Chicago.

“Chicago still continues to be the major draw in the Midwest for venture capital dollars and business growth,” he said.

Doing that requires Milwaukee to sell itself on things like its friendlier business climate, easier movement in the area and a better cost of living.

“I think we want companies to be saying … ‘If we’re going to move to Chicago, why don’t we look at Milwaukee? Look what they have to offer.’” he said.

Palec said this can be measured not just with big deals like a headquarters move. It also includes when companies that have dozens of offices around the U.S. start taking a serious look at Milwaukee.

“When that happens in Milwaukee, that’s when I’ll know people are noticing,” he said.

With challenges still ahead and lofty goals set, now has never been a better time for Milwaukee to achieve them, Palec said.

“I don’t have the panacea, but I have a lot of optimism because for the first time in 35 years, in the last five years, I have felt a generational shift in attitude for this city,” he said. “Now, if we can embrace that positive attitude that’s happening, that’s where things start to change.”

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Alex Zank
Alex Zank covers commercial and residential real estate for BizTimes. Alex previously worked for Farm Equipment magazine and also covered statewide construction news at The Daily Reporter. He graduated from the University of Wisconsin-Eau Claire, where he studied journalism, political science and economics. Having grown up in rural western Wisconsin, Alex loves all things outdoors, including camping, hiking, four-wheeling and hunting.