PACE Equity will provide $2 million in financing for the redevelopment of the former Laacke & Joys site in downtown Milwaukee.
The PACE portion of the project includes roughly 7 percent of the total development costs. The overall financing package includes New Market Tax Credits, City of Milwaukee TIF, mortgage financing from Tri-City National Bank and PACE Equity.
This is the first new construction office PACE project in the U.S.
“PACE Equity moved quickly and were able to support the project when we changed the financing structure after receiving a New Market Tax Credit allocation,” said Stewart Wangard, chairman and chief executive officer of Wangard Partners. “PACE Equity made this project a great win for us.”
Wauwatosa-based Wangard Partners is developing a 113,830-square-foot office building at the former Laacke & Joys site. The firm is currently tearing down a four-story, 142-year-old building and another building on the site, while keeping one four-story building, built in 1930.
A new five-story office building will be built attached to the 1930 building, which will also be used as office space, according to the plans.
The property is owned by Riverwater Partners, which will move its Mequon office to the development in May. Brookfield-based Bader Rutter will anchor the development.
PACE Equity works with private equity to bring money to the table to help pay for energy and water efficiency improvements. The city then acts as the collection agent, via a special charge on the building owner’s tax bill, and remits the money back to PACE, typically over a 20-year period. Tax dollars are not used to pay for any of the improvements.
The Milwaukee PACE program has approved more than $10.8 million in energy efficiency projects in Milwaukee. These include the Mackie Building renovation, the new Westin Hotel, SpringHill Suites Hotel in the Commerce Building, Antiques on Pierce and The University Club of Milwaukee. PACE is collectively saving these buildings $885,000 annually in operating costs.
“We pioneered the first new construction PACE project in the county, which was a hotel. Additionally, we have now completed new projects in the multifamily and office markets. We look forward to continuing to work with the development community to help make even more projects come to fruition,” said Beau Engman, who founded Pace in 2013.