Construction in and around Milwaukee’s Park East Freeway corridor, which has been a mostly dormant area since the freeway spur was torn down, should pick up dramatically this year. Juneau Avenue is set to become a new hotel district, as three hotels are in various stages of development along a four-block stretch of the street.
Mequon-based Ruvin Development Inc. and Dallas-based Gatehouse Capital Corp. recently announced that they plan to build a 10-story building at the northeast corner of Old World Third Street and Juneau Avenue with a 120-room Aloft hotel. Aloft is a new hotel brand for White Plains, N.Y.-based Starwood Hotels & Resorts Worldwide Inc.’s hip and trendy W Hotels division.
“(Aloft) is a select service hotel,” Ruvin Development owner Rob Ruvin said.
The building will have retail space on the first floor, which will probably include a restaurant, Ruvin said, and condominiums on the top floor. In addition, Chicago-based Cramer-Krasselt has decided to move its Milwaukee office from 733 N. Van Buren St. to the building and will occupy two floors, about 50,000 square feet of space.
“This (building) met our needs best,” said Betsy Brown, general manager for the company’s Milwaukee office. “The views we are going to have are going to be terrific. We really wanted to be in an area that reflected our creative nature and our growth potential. I think the (Park East corridor) has the cachet of a hip and growing area.”
The Cramer-Krasselt/Aloft building will be just east of the Syndy Hih block, located northwest of Old World Third Street and Juneau Avenue, where Ruvin and Gatehouse plan to build a mixed-use development with an 180-room boutique hotel, 70 residential condominiums, 100,000 square feet of office space and 30,000 square feet of retail space. That hotel will be operated by San Francisco-based Kimpton Hotels. The centerpiece for the Sydney Hih block development will be a 25-story tower for the hotel and condos. The development also will include restoration of part of the Sydney Hih building and restoration of the Gipfel brewery building, which will be moved from 423-27 W. Juneau Ave. next to the Sydney Hih building.
The two developments will complement each other, Ruvin said.
Both of the Ruvin/Gatehouse developments are expected to break ground this fall, Ruvin said. The Kramer-Crasselt/ Aloft building will be completed during the fourth quarter of 2008, and the Sydney Hih block project will be completed in the fourth quarter of 2009, he said.
A few blocks to the east, Fort Myers, Fla.-based Development Opportunity Corp. recently began site work for construction of a 14-story building at the southeast corner of North Water Street and Juneau Avenue. The project will include a 121-room Staybridge Suites hotel, 31 condominiums and 14,000 square feet of retail space. The project is expected to be completed in May 2008.
Meanwhile, construction of the new, 280,000-square-foot Manpower Inc. headquarters, located along the Milwaukee River just north of the corridor, will be complete later this year. The company will move 900 employees to the building from Glendale and Brookfield. The project is creating additional interest in developing other properties in the corridor.
Redevelopment of two other large sites near the Park East corridor began recently. Joseph Zilber, the founder of Milwaukee-based Zilber Ltd., has begun renovation work at the former Pabst brewery, just west of the Park East corridor. Zilber is receiving $29 million in tax incremental financing (TIF) assistance from the City of Milwaukee for the project. He plans to save most of the historic buildings in the 20-acre property, gut them and prepare them for redevelopment. He plans to sell some of the buildings to other developers and to develop some of the buildings himself.
In addition, Milwaukee-based Mandel Group Inc. recently began the first phase of cleanup of the former Pfister & Vogel tannery site, located along the east side of the Milwaukee River just north of the Park East corridor, where it plans to build the North End. That development will consist of several buildings with a total of 88 apartments, 395 condominiums and 20,000 to 30,000 square feet of retail space. Most of the retail space will face Water Street.
Mandel Group received $8.2 million in TIF from the city to assist in the cleanup of the heavily contaminated site. Major demolition at the site is expected to begin in about two months. Construction is expected to break ground this fall. People will start moving in to the first phase of the development in the spring of 2009. The entire development is expected to take five to seven years to build out.
The first development that began construction in the Park East corridor should be completed later this year. Deerfield, Ill.-based Legacy Real Estate Development LLC is building the Flatiron, which will have 38 condominiums, at 1541 N. Jefferson St.
Another development is under construction in the Park East corridor at the southeast corner of Ogden Avenue and Milwaukee Street. The City of Milwaukee Housing Authority is building a 120-unit, 12-story building for elderly residents. The building will have 7,500 square feet of retail space, and it will replace the existing high-rise building on the property, which will be demolished. As part of the project, the Housing Authority also plans to build 20 single-family homes in the surrounding community and later plans to build 62 market-rate condominiums, more retail space and an underground parking structure on the site of the current Convent Hill high-rise.
The future of other parcels in the Park East corridor is less certain.
Chicago-based RSC & Associates plans to develop two blocks of county-owned land in the Park East corridor bounded roughly by Water Street, Ogden Avenue, Jefferson Street and Lyon Street. The company is seeking $9.2 million in TIF from the city of Milwaukee to assist the first phase of its development, which would include 126 high-end apartments, a 148-room boutique hotel and 80,000 square feet of office, retail, restaurant and entertainment space.
Without the TIF assistance, RSC will have to do a smaller project, according to RSC CEO Rich Curto. In that case, the first phase of the development would have the same amount of residential development, but no hotel and only 22,000 square feet of commercial space.
With the help of TIF, the project would also create more jobs and generate more tax revenue for the city, Curto said.
“It’s an excellent investment,” he said. “There’s a lot of positives for the city.”
However, city officials have balked at RSC’s TIF request. City officials are reluctant to provide TIF for a project that will compete with existing retailers and hotels downtown, especially since several other hotel projects are being proposed for the downtown area, said Joel Brennan, assistant executive director for the city’s Redevelopment Authority.
“When we look at any of these projects, we look at the bigger picture,” Brennan said. “We look at the impact any of these projects will have on the existing marketplace. There could be development on the site without any subsidy and the taxpayer could reap the benefits immediately without waiting a decade or more (to pay back the TIF). If there were a market for it, the developer would not need a subsidy.”
The second phase of the RSC development would not require TIF assistance, Curto said. The details of that phase will be based on market conditions, he said.
National tenants are interested in the Park East corridor, and the city should consider providing a subsidy to maximize the area’s potential, Curto said.
“There’s a real crying need downtown for additional entertainment venues,” he said. “What’s misunderstood is (the impression that) Milwaukee is this tight little market, that we are taking tenants from other places. We are talking to a lot of national tenants, but they want to see something happen (in the Park East corridor) first.”
Much of the land in the Park East corridor, including the Sydney Hih and the RSC parcels, are owned by the county. The county is selling its land to developers piece-by-piece. Some of the county’s Park East property still has not been placed on the market yet, because its sale has not been approved by the state. The state must approve, because the county must share the proceeds of its Park East land sales with the state and federal governments.
The county owns about 10.5 acres in the corridor that it has not placed on the market yet. Once it gets state approval, the county next plans to issue a request for proposals (RFP) for developers interested in the two-block property bordered by North 4th Street, North 6th Street, McKinley and Juneau avenues. The county may give developers the option of bidding for parts of that property.
The county owns two other parcels in the corridor that it has not put on the market yet. One is a triangular-shaped site bounded by 6th Street, McKinley and Juneau. The other is an irregular-shaped property northeast of Water and Knapp Streets. The southern portion of that block is owned by Milwaukee-based Marshall & Ilsley Corp. County officials are trying to work out a land swap with M&I to square off the boundaries between its property and the M&I property.
M&I also owns the vacant lot northeast of Water Street and Juneau Avenue, which is directly north of the Staybridge Suites hotel project. M&I has not indicated what it’s long-term plans are for its Park East property.
“We continue to monitor developments related to the Park East project,” said M&I spokeswoman Sara Schmitz. “At this point, however, no decisions have been made regarding the land.”
West Allis
Rogers Memorial Hospital, 11101 W. Lincoln Ave., West Allis, plans to build a $5 million, two-story, 20,464 square-foot addition. The addition will include new office and administration areas, group consultation rooms, a new reception and lobby area, meeting and training rooms and storage areas.
Pewaukee
Minneapolis-based Buffalo Wild Wings plans to open a restaurant in a multi-tenant retail building that will be built at the Capitol Cinemas property at 1275 Capitol Drive. Buffalo Wild Wings is a growing chain of sports bars that specialize in chicken wings. There are more than 400 Buffalo Wild Wings locations, including locations in Milwaukee, New Berlin, Wauwatosa, West Allis and Kenosha. Zabest Commercial Group plans to redevelop the theater building, transforming the 33,423-square-foot building into a multi-tenant retail building. Zabest also plans to build two additional retail buildings, one 10,880 square feet and the other 9,100 square feet. The Buffalo Wild Wings restaurant would be in one of the new buildings.
Sheboygan
Mequon-based Bayside Development plans to build a 28,000-square-foot addition to the Washington Square retail center, a multi-tenant shopping center anchored by a Piggly Wiggly grocery store and located northwest of South Business Drive and Washington Avenue. The addition would include space for a 17,500-square foot Ace Hardware store. Oak Brook, Ill.-based Ace Hardware Corp. has more than 4,600 locations, but none in Sheboygan. In addition, Taco Bell plans to build a 2,500-square-foot store on an outlot at Washington Square. The new Taco Bell restaurant will replace the Taco Bell restaurant at 2329 S. Business Drive, which will be closed.
Manitowoc-based First National Bank plans to open a new branch that will be built between North 26th and North 27th streets, along the Kohler Memorial Drive frontage road. First National Bank has 14 locations in northeastern Wisconsin and about $687 million in total assets. This will be the bank’s first location in the City of Sheboygan.
Superior Seamless Rain Gutter Co. Inc. plans to build a 4,200-square-foot building on a one-acre site along South Business Drive in the Sheboygan Business Center. The company plans to move to the new building from its current location at 1722 N. 19th St., Sheboygan.
Port Washington
West Bend-based American Design & Build plans to build a 15,000-square-foot multi-tenant industrial condominium building at 1123 Mineral Springs Drive. The building will be next door to a similar-sized industrial condo building that the company built.
Waukesha
Developer Mark Hoppe plans to build a 6,000-square-foot convenience store and a 15,000-square-foot multi-tenant retail building at the northwest corner of Lincoln Avenue and Highway 164. A gas station on the property will be demolished.
Leases
Dickman Company
Schneiders Vetter Glass Co. Inc. leased 13,897 square feet of industrial space at 2224 S. 162nd St., New Berlin, from VMJ#1, a join venture, LLP.
Tolt Technologies LLC leased 6,000 square feet of industrial space at 11819 W. Dixon Road, West Allis, from Alfred & Dorothy Hebert.
Mid-America Real Estate
U.S. Cellular leased 1,160 square feet of space in the Village Square of Delafield at Highway 83 and Highway 16 in Delafield, from Delafield Investment LLC.
Panera Bread leased 4,750 square feet of space at Paradise Pavillion, 1604 S. Main St., West Bend, from River Valley One LLC.
Dollar General leased 12,000 square feet of space in the Green Ridge Shopping Center at 831-937 Green Ridge Ctr., Mukwonago, from D.N. Greenwald.
Forward Dental leased 5,500 square feet of space at Capitol Plaza, 15740-80 W. Capitol Dr., Brookfield, from Alexander & Bishop.
U.S. Cellular leased 1,315 square feet of space at Village Market of Hales Corners, 5750-5800 South 108th St., Hales Corners, from The Mid-America Management Corporation.
NAI MLG Commercial
Elliott Auto Supply d.b.a. Factory Motor Parts leased a 15,750-square-foot industrial space at 1814 Dolphin Dr, Waukesha, from R.A.B. Property’s LLC.
Welman Architects Inc. leased a 7,460-square-foot office space at 21675 Longview, Waukesha, from KPK Eagle Investments.
Sales
Dickman Company
Olson Capital Investments LLC purchased 23,000 square feet of industrial space at 720-40 Swan Dr., Mukwonago, from EPOS Acquisitions LLC.
Mid-America Real Estate
Alliance Development purchased 0.95 acres at 1604 S. Main St., West Bend, from KNJ Enterprises Inc.
NAI MLG Commercial
John Gregorski purchased a 30-unit apartment building at 601 N. Hartwell Ave., Waukesha, from Hartwell LLC.
An undisclosed buyer purchased a 5,000-square-foot building at 1158 Prairie Dr., Mount Pleasant, from CK Restaurants Inc.
Siegel-Gallagher
DGM Development purchased a 3,200-square-foot building at 1850 N. Water St., Milwaukee, from Five & Ten Tap LLC.
New construction
Gilbane Building Company, Providence, R.I., has been awarded the contract to provide construction management services for General Mitchell International Airport’s reconfiguration of the baggage area. The airport’s outgoing baggage system will be reconfigured, five airline offices will be remodeled and one additional office will be built. The new system includes four new baggage carousels. Gilbane is also providing construction management services for the $31 million in improvements to Concourse D, remodeling of Concourse E and addition to Concourse C.
Briohn Building Corp., Brookfield, has been contracted to design and build a 3,600-square-foot build out for Surf Prep at W226 N3014 Duplainville Road, Pewaukee. Briohn has also recently completed the design and construction of a 10,000-square-foot new building for Superior Development at N60 W15771 Kohler Lane, Menomonee Falls. Briohn has also recently finished the design and construction of the tenant improvement for Maysteel’s Fountain Boulevard facility at W142 N9041 Fountain Blvd., Menomonee Falls.
Keller Inc. was contracted to design and build a new 5,000-square-foot vehicle prep building for Sommer’s Buick Pontiac Subaru at 7211 W. Mequon Road, Mequon.
MEDC loans
Gestra Engineering Inc. received a $180,000 MEDC loan to renovate the 6,485-square-foot building at 1620-34 W. Fond du Lac Ave., Milwaukee.
Taylor Dynamometer Inc. received a $1.5 million MEDC loan to purchase land in the Menomonee Valley and build a new 43,000-square-foot facility. The company plans to move from New Berlin to the valley.
Air Flow Inc. received a $50,000 MEDC loan to remodel the building at 7330 N. Teutonia Ave., Milwaukee.
Andrew Weiland is the managing editor of Small Business Times. Send news about commercial real estate to Andrew.weiland@biztimes.com or by calling him at (414) 277-8181 ext. 120. News can also be sent to Andrew Weiland, Small Business Times, 1123 N. Water St., Milwaukee, WI 53202.
