Pabst project perks up

From the outside, 2010 appeared to be a quiet year at the former Pabst brewery complex in downtown Milwaukee. No major construction occurred, and no significant new tenants moved in.

Executives at Zilber Ltd. are working to complete The Brewery Project, which was started by the company’s founder, Joseph Zilber, to redevelop the former brewery complex into a mixed-use urban neighborhood.

Prior to 2010, Zilber tore down several buildings, installed streets and other new infrastructure, created a park and sold three buildings to other developers that redeveloped them into apartments and office space. New office tenants moved in. And, a Pabst collectibles gift shop, bar and event space opened in the former Pabst gift shop, visitor’s center and Blue Ribbon Hall.

Then in 2010, it appeared that development activity at the former Pabst brewery had ground to a halt. But behind the scenes a lot of work was being done on The Brewery project during the year, said Zilber vice president Mike Mervis.

“The people that are interested in being here had to be creative in how they put together their financing and how they structured their use,” Mervis said.

A lot of that behind the scenes work is expected result in physical construction work at The Brewery in 2011.

UWM School of Public Health

Early prep work began recently for the University of Wisconsin-Milwaukee School of Public Health, which will occupy the 33,000-square-foot former Manufacturing and Cold Storage building along the east side of North 10th Street between Winnebago Street and Juneau Avenue. The early prep work consists primarily of internal environmental remediation and paint removal.

The project will also include a 23,000-

square-foot addition. The main construction work is expected to begin in May.

“We are excited to begin the preparation work for the development of the School of Public Health,” said Zilber executive vice president John Kersey. “Though this is just a small step in what will be a significant project, it represents the culmination of years of effort by many individuals, both within and outside of the UWM community to bring this project to fruition.”

The project is expected to be complete in time for classes to be held there in September of 2012.

Hotel

Oregon, Wis.-based Gorman & Company Inc. plans to redevelop the former Brew House building and the Mill House building located northwest of West Juneau Avenue and North 10th Street into a 90-room hotel. The hotel would accommodate extended stays and short-term stays. It will be an independent hotel with no national chain flag affiliation.

The cost of the project is estimated at $19 million. Gorman plans to obtain $15 million in debt financing for the project from Chinese investors through the federal government’s EB-5 program, which provides green cards and possible citizenship for foreigners that invest in project in the United States that create jobs.

Gorman is waiting for the U.S. Bureau of Citizenship and Immigration Service to approve the EB-5 funding.

The remaining $4 million for the project would be provided by investors that are seeking historic preservation tax credits.

The redevelopment project for the hotel will take about 15 months to build, said Gary Gorman, CEO of Gorman & Company.

Also, Cincinnati Restaurant Group has signed a letter of intent to lease 16,500 square feet of space, which is about the entire first floor of the hotel buildings, for a Hofbrauhaus beer hall and restaurant. The restaurant would also have a 6,500-square-foot outdoor beer garden on the southwest side of the hotel. The project still must be approved by Hofbrauhaus in Munich, Germany, and Cincinnati Restaurant Group still must line up financing for the project, Gorman said.

Office building

Gorman & Company also is in the early stages of developing a five-story, 44,000-square-foot office building to the west of the hotel buildings. The building will have structured parking for the office tenants and for the hotel.

The office building will be marketed to small firms and start-ups, particularly law firms that want to be located near the Milwaukee County Courthouse.

Gorman plans to provide support staff that can be shared by the tenants in the building.

The office building will be located just south of the grain elevator building at The Brewery, where Zilber Ltd. officials hope to attract a restaurant or lounge, Mervis said.

Gorman has been heavily involved in The Brewery Project. In addition to the hotel and the office building, Gorman previously redeveloped the former Keg House building into the 95-unit Blue Ribbon Lofts apartment building. Blue Ribbon Lofts has been a big success, Gorman said. The company still has a waiting list for the building and the rents are higher than the company originally planned to charge.

“People like living in unusual spaces,” Gorman said. “People like living in buildings with history. People will live in a space that is in a building done in an interesting way, even if it is not in a silk stocking neighborhood. We think the Pabst area is going to become a really interesting village.”

Senior apartments

St. Paul, Minn.-based CommonBond Communities plans to build a 48-unit senior apartment development on a 0.42-acre vacant site at the southeast corner of Winnebago Street and North 9th Street. The nonprofit affordable housing development firm has a contract to purchase the site from The Brewery Project LLC.

CommonBond is seeking affordable housing tax credits for the project through the Wisconsin Housing and Economic Development Authority (WHEDA). The total cost of the project is $8.4 million, and CommonBond is seeking tax credits worth $6.2 million. The remaining $2.2 million would be provided by another lender.

The plans for the four-story, 49,500-square-foot building include 46 units for residents with incomes below the county’s median income and 2 units at market rates.

Of the low income units, 8 will be for residents with incomes at or below 30 percent of the median county income, 22 will be for residents with incomes at or below 50 percent of the median county income and 16 will be for residents with incomes at or below 60 percent of the median county income.

CommonBond expects to find out in June if it will get the tax credits for the project, called Brewery Point Apartments, said housing development manager Jen Oscarson.

If it gets the tax credits, CommonBond plans to begin construction by the end of the year. It will take 10 to 12 months to build, Oscarson said.

Astronautics

Zilber executives are still hoping to convince Astronautics Corp. of America to move its corporate headquarters to The Brewery. Astronautics has considered plans to consolidate its operations in its headquarters at 4115 N. Teutonia Ave. and its manufacturing operations at 1426 W. National Ave. and 133 E. Washington St. in a single location.

The company has been tight-lipped about the process, and it has dragged on for months.

Mervis said he was not permitted to provide any information about the discussion with Astronautics.

“We continue to be cautiously optimistic that at some point down the road we will have an opportunity to build a new headquarters for Astronautics,” he said.

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Andrew is the editor of BizTimes Milwaukee. He joined BizTimes in 2003, serving as managing editor and real estate reporter for 11 years. A University of Wisconsin-Madison graduate, he is a lifelong resident of the state. He lives in Muskego with his wife, Seng, their son, Zach, and their dog, Hokey. He is an avid sports fan and is a member of the Muskego Athletic Association board of directors.

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