Last updated on July 2nd, 2019 at 11:00 am
Despite stagnant economic conditions, market pressures may spur redevelopment of several prominent vacant sites in metro Milwaukee in coming years, real estate sources say. Some sites such as the former Delphi Automotive Systems Corp. campus in Oak Creek, the former U.S. Bowling Congress headquarters in Greendale and the current U.S. Post Office distribution center in downtown Milwaukee, could either be re-used or demolished for redevelopment because of their prime locations.
Other long-vacant sites, like the Reed Street Yards (located to the southeast of the newly opened Harley-Davidson Museum near the Menomonee Valley) could see increased attention because of other development occurring nearby.
The former Delphi Automotive Systems facility, located at 7929 S. Howell Ave. in Oak Creek, with about 1 million square feet of manufacturing space, presents a unique redevelopment challenge. Areas that have high ceilings and overhead cranes could be leased for industrial use, said James T. Barry III, president and chief executive officer of Milwaukee-based Colliers Barry.
“What we have found is a lack of (buildings in the area with) accessible crane space,” he said. “Even though we’re in a strange market now there is a demand for that.”
But other areas of the Delphi complex will be more difficult to market to manufacturers.
“I view it akin to the Allis Chalmers complex (in West Allis),” Barry said. “At the end of the day what was preserved was the office space and the high bay crane (industrial) space. The rest was torn down or renovated into office and retail space.”
Any portions of the former Delphi plant that are without high ceilings and overhead cranes would be more marketable if they were demolished, said Stephen Provancher, principal at Brookfield-based NAI MLG Commercial Real Estate. The site would be best developed as flexible space, meaning it could be used for office, distribution or light manufacturing.
“It could be a very good mixed use site as things get more and more developed on 27th Street,” he said.
If a mixed-use development were to proceed on the former Dephi property, neighborhood retail might work well, said Peter Glaser, vice president with the Milwaukee office of CB Richard Ellis.
“I could see retail working on a portion of the (Delphi) property, building on the Woodman’s in that market,” Glaser said. “That has created a retail draw on Howell Avenue and this could be more neighborhood retail.”
A portion of the former Delphi plant could also find future use as a warehouse or a distribution center, said Provancher. However, it might take some time before the Oak Creek area is ready for additional distribution centers.
“There’s been a lot of activity in the Oak Creek and South Milwaukee airport market,” Provancher said. “There are a lot of speculative buildings, and those are now gaining some traction.”
U.S. Bowling Congress
The soon to be vacated United States Bowling Congress office and testing facility at 5301 S. 76th St. in Greendale, would be best-suited as a single-user office building or a medical facility, if the current building were left intact, said Bill Bonifas, senior vice president of the Milwaukee office of CB Richard Ellis.
“It will be a large user that has a need – they will be the impetus for something,” Bonifas said. “It’s not an ideal location, but maybe there is someone from Franklin or Chicago that might look there.”
The building could also find re-use as a medical facility, Bonifas said, but would require a feasibility study to determine if that would work.
However, the building’s location across the street from Southridge Mall could make it best-suited for retail, Bonifas and Glaser said.
“That’s the only large retail redevelopment site there,” Glaser said. “I think it’s a strong site – it’s across from Southridge Mall. For a larger retailer that wants a position in that trade area, there are no other options. I think it’s a matter of assembling a large enough site and a large format retailer that would take advantage of its location across from Southridge Mall.”
U.S. Postal Service distribution center
The 941,000-square-foot U.S. Postal Service distribution facility on St. Paul Avenue in downtown Milwaukee could be available for redevelopment in three to five years, after a new mail processing and distribution facility is built near College Avenue and Pennsylvania Road in Oak Creek. The shift to the Oak Creek facility will leave most of the downtown building vacant. The Postal Service says it plans to keep its retail post office and vehicle maintenance downtown, but not necessarily in the St. Paul Avenue building.
While the current Postal Service building is large, it may not be suitable for redevelopment and might need to be demolished.
“The building itself is such a monster – you would have to study it closely,” said Robert Monnat, chief operating officer of Milwaukee-based The Mandel Group.
However, the site’s proximity to the newly redeveloped Milwaukee Intermodal Station, its frontage on the Menomonee River and easy access to freeway on and off ramps give it a great chance for multi-use redevelopment, Monnat said.
“The Intermodal (Station) is right there… and the station distinguishes that neighborhood as an icon right now,” he said. “It sets the bar for what could happen in the area. There are enough bits and pieces in that whole stretch of St. Paul (Avenue) to pull together a comprehensive plan for the area. There are residential components, some class B and C office space and you have the theme of thoughtful public improvements spurring private development.”
Tim Gokhman, director of sales and marketing with New Land Enterprises LLP, agreed.
“It’s not like a normal site – it has so many positives like freeway access, its visibility, it’s by the water and it’s close to the Third Ward,” he said. “That’s a project, where the magnitude would necessitate a partnership between the city of Milwaukee and the developer.”
Monnat, Gokhman and Glaser all said redevelopment at the Postal Service site would need to be mixed use, both because of the neighborhood it is in and because of the size of the parcel.
“The primary uses would be office and condo with some retail to support those uses,” Glaser said. “And it could be a really good restaurant site with the river frontage and the good freeway access.”
Reed Street Yards and the Fifth Ward
The former Reed Street Yards, a 17-arce parcel located south of the new Harley-Davidson museum and west of the intersection of South 3rd Street and Oregon Avenue, may be a more site viable for development because of the new museum, the Iron Horse Hotel that is under construction and other nearby development in the Menomonee Valley and the Fifth Ward.
“I think the whole (Reed Street and 5th Ward) area is poised for a continued renaissance,” said Barry. “There are a number of older industrial buildings there that will be converted and vacant land and other parcels that are not at their highest and best uses. I think many uses could work there. Some of it will depend on how well the Harley museum does.”
“With all of the activity (nearby), there isn’t much left in the (Menomonee) valley,” he said.
Monnat said the Reed Street Yards is part of an area that was not extensively redeveloped during the real estate heyday earlier this decade.
“There was a very clear expansion of the success of the Third Ward into the Fifth Ward and that leapfrogged certain areas,” he said. “When things pick up again, this will be a very hot area. The whole area could become much more lively in the next few years, but until the credit markets become more stable it’s a little dicey.”