[caption id="attachment_549563" align="alignleft" width="300"] S.R. Mills[/caption]
On Friday, Grafton-based Kacmarcik Enterprises and Kenosha-based Bear Development announced plans for a $160 million, 11-acre sports and entertainment district in downtown Milwaukee. Called Iron District MKE, it would be developed northeast of the Marquette Interchange on a mostly vacant area.
The plans for Iron District MKE include an 8,000-seat soccer stadium that will be home to a professional soccer team and Marquette University's soccer and lacrosse teams, a 3,500-person indoor concert venue to be operated by Pabst Theater Group and a yet-to-be announced national concert promoter, a 140-room hotel, 99 multi-family housing units, plus retail and restaurants.
Then on Monday, Madison-based FPC Live announced that it planned to build an indoor concert venue complex at the former Bradley Center site in the Deer District in downtown Milwaukee. The facility, originally planned near the Summerfest grounds, would have two venues, one with a 4,000-person capacity and the other with an 800-person capacity. Click here for more details on the FPC Live plans.
How would the Iron District MKE development fit into the downtown Milwaukee sports and entertainment scene and is there enough demand in the market place to support a new indoor concert venue there and a two-venue complex in the Deer District? BizTimes Milwaukee editor Andrew Weiland spoke with Bear Development chief executive officer S.R. Mills to get more information about the Iron District MKE project and to hear his thoughts about the competition from FPC Live.
BizTimes: For starters, I have to ask what you think about FPC Live’s announcement (on Monday) that it plans to build an indoor concert venue facility, originally planned near the Summerfest grounds, in the Deer District instead. Are you concerned about that project competing with the indoor concert venue that you are planning in your development in downtown Milwaukee? Can they both succeed, or will it be a race to see who gets theirs built first? How do you see it?Mills: “I think we’re still trying to sort that out. There is certainly competition and we need to be thoughtful about that. We have some really good local and national partners. We have all of the confidence that we can deliver and deliver in a timely manner. We’ve been working to tee this up for some time now.”
BizTimes: You’ve working on this project for three years, right?Mills: “Correct, in some various iterations. A little COVID in there delayed some of the discussions, but we’ve been working on it in various forms for a long time.”
[caption id="attachment_549540" align="alignright" width="768"] Rendering of the indoor concert venue planned for Iron District MKE. Credit: Kahler Slater.[/caption]
BizTimes: “How important to the overall project is the indoor concert venue component?Mills: “It is very important. The additional nights that we’re going to have activity in the theater is going to be very helpful to the hotel. It’s going to be very helpful to the various F&B (food and beverage) options that we’re going to have, bring further activity and life into that whole Iron District. So, it’s quite important.”
BizTimes: “What are your thoughts about the concert venue market in Milwaukee? Do we need more? Obviously, you think so. What’s the demand driving the need for an additional concert venue in downtown Milwaukee?Mills: “I think there are others on our team that can answer that question better. However, as evidenced by the fact that there’s two groups looking to construct venues, and they are both big names that know a lot about this industry, I think it’s safe to say that there’s additional room for at least one (additional) venue, maybe two.”
BizTimes: You are obviously working with the Pabst Theater Group. In your announcement last week there was mention of a yet-to-be announced partner, “one of the world’s premier concert promoters,” to operate the venue with Pabst Theater Group. Can you give us an idea when that partner will be announced?Mills: “Hopefully this week.”
BizTimes: FPC Live indicated (Monday) they were approached by you to be that partner, but they turned down the offer. Is that correct?Mills: “We had discussions with them prior. We chose to go with Pabst Theater Group and the other national partner that we will announce in the coming days or weeks. We did not strike deal terms with FPC Live.”
BizTimes: As for the soccer component, why are you interested in building a soccer stadium in downtown Milwaukee. Why is this the right time for that?Mills: “There’s a lot of evidence in other cities of similar size where soccer has been a big draw and very popular. We think soccer is a big sport in Milwaukee and it’s got a rich history there. We’re confident that it will be well embraced and it will be a great draw for the city overall. In addition to that, it will be a catalytic development that cleans up an area, that long dormant site, that’s really important to the city. It really presents itself as the gateway to downtown when you are coming from the west or the south. I think it will really highlight some of the best that Milwaukee has to offer.”
[caption id="attachment_549541" align="aligncenter" width="1280"] Rendering of the soccer stadium planned for Iron District MKE. Credit: Kahler Slater.[/caption]
BizTimes: You mention the site. Why do you like it? It has been dismal for a long time. What do you see there?
[caption id="attachment_549542" align="alignright" width="640"] Aerial view of Iron District MKE and its surroundings. Rendering from Kahler Slater.[/caption]
Mills:“It’s next to (one of) the busiest (freeway interchanges) in the state. The visibility from the Marquette Interchange to that site we think is fantastic and the fact also that the site might be tough for certain types of uses, but the stadium, the hospitality, the housing, the theater, it fits really, really nicely on that site. We still have additional room for expansion as we go east of James Lovell (Street) to 6th Street. Part of it too, is the available parking in the immediate vicinity. Also, the ingress-egress to the site. The off-ramps. If you are headed from the west, you get off right there onto James Lovell. If you are coming from the south, you get right off on Michigan (Street). It’s very, very easy vehicular movements. Also, further building out the connection to the Harley museum and some of the other activities in the immediate area. It’s great to finally see Westown receiving some needed capital and investment and we think it’s going to flourish.”
BizTimes: You mentioned possible expansion to the east. What are the possibilities there?Mills:“We’re still working through that. We think there’s a lot of food and beverage options. We think’s there’s other activities that will be synergistic with the users that we are proposing. At some point there could be stadium expansion. So, there are some different ways to keep flexibility on that site and allow us to grow. We love the fact that Milwaukee Tool (downtown Milwaukee office building) is just to the east now and the tremendous investment that they’ve made. With everything going on good things will happen to that additional 2.5 acres (between James Lovell Street and 6th Street) once the stadium, the hotel, the theater and the housing are up and operable.”
[caption id="attachment_549217" align="alignright" width="768"] The 11-acre Iron District MKE development site is bounded by Michigan Street on the north, 6th Street on the east and the Marquette Interchange to the south and west. Image from Google.[/caption]
BizTimes: What you’re talking about is the block with the former Ramada hotel, right?Mills:“Correct.”
BizTimes: So that’s the yet-to-be-determined area of Iron District MKE?Mills: “Correct. We’re going to commence on the demolition of the Ramada, probably mid to late summer.”
BizTimes: Back to soccer. When are we going to find out the name of the team and what league they will play in? Mills: “We’re looking to announce that, probably within the next two weeks.”
BizTimes: You announced last week that it will be the highest level of professional soccer in the state of Wisconsin. Will it be a USL Championship league team, one level higher than the Madison soccer team’s league? Is that a logical guess? Or, will this be a team in a new league?Mills:“I appreciate you trying on that one, but I need to sit tight. I appreciate the effort, though!”
[caption id="attachment_549201" align="alignright" width="768"] Rendering of the soccer stadium planned for Iron District MKE. Credit: Kahler Slater.[/caption]
BizTimes: Ok, we’ll wait for that one. What about the hotel component? What can you tell us about that? There have been several additional hotels added to downtown Milwaukee in recent years. What are your thoughts on that piece?Mills: “The hotel business certainly during COVID has been a tough business to be in. We’re active in that space in Milwaukee and other cities as well. We feel, when done right, in conjunction with the other uses that are being proposed, it will be a great addition. We have some ideas and potential partners that we are working through the process with now. We’re really excited to see if those can all come together and bring something that is pretty unique and different to downtown Milwaukee.”
BizTimes: Why are you calling this development the Iron District?Mills: “Paying homage to the Harley-Davidson Museum to the south of us and the manufacturing roots in Milwaukee, we felt it appropriate to pay homage to that and also to create something unique and special that can be Milwaukee’s own.”
BizTimes: What is the total cost for the entire Iron District MKE development?Mills: “Approximately $160 million.”
BizTimes: Where do you stand on financing that?Mills:“We’re still working through that process. Some of the parts are financed a little differently based on the asset class. Housing is financed one way versus the theater and the stadium and hotel. We’re still putting together the final pieces of the puzzle there. But everything is tracking the way we want it to.”
BizTimes: Are you going to be selling naming rights to the stadium or the theater?Mills: “I think that would be a logical assumption. We haven’t had any detailed discussions yet with potential suitors. But that would be a logical choice for us to make.”
BizTimes: Will you be seeking any financing from the city of Milwaukee, tax incremental financing or anything like that?Mills: “We’re still working through those specifics on the stadium, hotel, theater component. But related to the housing, it does have a workforce housing component. We would look to utilize a workforce housing TIF there, but it would be solely for that housing component of the project.”
BizTimes: Is there any possibility you would need TIF for any of the other components of the development?Mills: “We’re still working though the steps there. We’re sensitive to the politics around that. We want to be really thoughtful and make sure as we roll out the financing package that it’s done correctly. So not quite ready to announce all of that yet.”
BizTimes: What are your thoughts on the overall economy right now and how it might affect your project? Inflation is obviously a concern and causes challenges as construction costs rise. Mills:“It certainly doesn’t make it easier. As you know we are active in development and construction of a variety of asset types and asset classes here locally, in the Midwest and nationally. It certainly is something that’s caused some difficulties on various projects. I think the problem usually comes down to when you are surprised. It’s when everything is running smooth and contingencies are little to none and then if you hit a big bump in the road that’s when things can really go off the rails. In this event we know there is a lot of volatility. We’re hopefully that we’re going to see some corresponding increases in hotel nights, stadium tickets, goods will continue to increase there, but we know that the construction costs are likely going to follow. We’re sensitive to that, and we’re making sure that we keep enough contingency and availability for those prices to go up within our pro formas right now.”
BizTimes: What about concerns about crime in the city of Milwaukee? In recent years homicides, vehicle thefts and reckless driving have increased significantly. The recent shootings near the Deer District on the night of a Bucks playoff game obviously raises a lot of concerns for downtown. And yet you moving forward with this project is a huge vote of confidence in the city and downtown, despite those challenges. But how concerned are you about crime in the city right now?Mills: “Certainly, we’re concerned about it. I think we all recognize that we all need to collectively work on solutions.
“I think that sites such as this one that’s been vacant, dormant, buildings that aren’t being used, bad things tend to happen in those kinds of places because it’s out of sight, out of mind. On this site in particular, by activating it and creating 24/7 activity and positive activity, we think it’s going to have an overall positive impact, certainly on the neighborhood and then on greater Milwaukee. Now with that said we understand that anytime you have a place with mass gatherings there is a risk of various crimes occurring. I’ve got all of the faith in Mayor Johnson and County Executive David Crowley and the police chief that we’re starting to bring real solutions to how we can mitigate this especially at times when we have a lot of people convening in various areas. So, whether that’s setting up perimeters, curfews, things of that nature those are all things we look to actively discuss so we can have real solutions so everybody can feel safe and be excited to visit downtown.”
BizTimes: So, when do you plan to break ground and get the project going?Mills: “We have it compartmentalized to some degree as we talked about with the Ramada coming down in mid-summer. Multi-family, look to have that started mid to late summer as well. And then hopefully shortly thereafter we can get moving on the other various pieces.”
BizTimes: And when are you projecting the pieces to open?Mills: “We want to be open in spring of 2024 for the soccer season. And for some of the reasons you mentioned prior with supply chain issues, construction delays, we’re trying to be realistic with our timing so we can under-promise and over-deliver but we definitely want to have it (the entire development) wrapped up and open by spring of 2024.”
[caption id="attachment_549198" align="aligncenter" width="1280"] Iron District MKE rendering from Kahler Slater.[/caption]