Efforts by land owners to maximize revenue from prime real estate may be pushing another auto service business out of downtown Milwaukee.
Phil Burns, owner of Juneau Square Union 76 Plaza Service — located in the shadow of the Firstar Bank building at the east end of Wisconsin Avenue, may lose his location to a new office development proposed for the site by Irgens Development of Wauwatosa. The 875 East building, with its 206,748 square feet of leasable space, would generate a lot more revenue than Burns’ service station and parking lot that now occupy the prime location.
Irgens Development is proposing an eight-story office structure for the space, with the major tenant being Artisan Partners, an investment firm. Irgens would also move from Wauwatosa into the structure. Additional tenants are being sought before construction can begin. But if things progress as planned, work on the nearly $50 million structure would begin in April and be completed by June of next year.
Burns sees the situation as one of a lack of awareness on the part of the owners of downtown real estate. Building owners don’t realize, he said, that auto service is a convenience for employees in a building. It is that value — in addition to lease revenue — that makes it worthwhile to locate businesses like his on high-value real estate downtown, he maintains.
In an SBT interview last summer, when the downtown Car-X auto repair shop closed, Burns was singing the praises of Mark Irgens — the very man whose development is slated for the site he currently leases month-to month from Firstar Bank.
"Mark Irgens — the new owner — he is giving me basically a verbal agreement for another repair facility for customers in the new building," Burns told SBT for a story in the July 6, 2001 issue. "Bill Bonifas of The Polacheck Company is handling the leasing. They’ve told us that they were going to put us back in because of the need."
But now, neither Irgens nor Polacheck executives will acknowledge that any such promises were made to Burns.
Irgens refused to comment outright.
"I’m not going to touch that," Bonifas, Polacheck’s executive vice president. said when asked of Burns’ claims. "At this point I have asked Mark Irgens to deal with it. I got a call at 6:45 a.m. yesterday morning from Phil Burns."
Burns recalls the discussions that led him to believe he would be leased space in the new building.
"Irgens and I talked when plans for building came out six months ago," Burns said. "I met with him, and I told him I couldn’t sleep not knowing if I had a job. His answer to me was ‘you can sleep at night.’ Now he’s not any closer to construction, but all these newspaper stories are scaring my customers away."
Ramp service encouraged by zoning
Burns has considered other downtown locations — specifically on the ground floor of parking structures. But while city zoning has required retail be incorporated in the ground floor of parking ramps, the economic reality is that the cost of the space can be exorbitant for a service station like Burns’.
Burns is also upset that while a parking structure put up by the Marcus Corp. for the downtown Hilton benefited from tax incremental financing district support from the city, the corporation still received a variance in a zoning requirement for the inclusion of retail on the structure’s first floor.
"The City of Milwaukee gave Marcus this money to put up a parking structure — with the agreement that there was so much space for retail. They put up a parking structure for $19,000 to $20,000 per slot — but it’s only costing Marcus $11,000 per slot. They’re getting rest from the city." Burns said. "In November, I talked to the manager of hotel. They wanted me to put up repair garage — but when they found out how much it would cost, they wanted $10,000 a month rent."
The figure represents a tenfold increase over the monthly lease payment Burns currently pays for his location for a similar amount of space.
Variance only temporary
But according to John Bratina, economic development policy coordinator with the Department of City Development, the variance Marcus received is only temporary.
"Back in 1993, the city came up with the downtown zoning district," Bratina said. "And what they tried to do is encourage retail on the ground level of parking structures and discourage open space. According to the zoning code, 50% of the street frontage in a parking structure was to have a retail component — that way you wouldn’t need to go to the board of zoning appeals."
Bratina said that due to the difficulty Marcus had with finding retailers for the first floor, the corporation was granted a variance.
"It was a two-step process," Bratina said. "There were some site conditions that made it difficult to put in retail. On Michigan Street there was a significant slope that restricted visibility. The requirement for 50% was waived — in favor of 18% retail on the ground floor — which the zoning board of appeals approved in September of 2000."
However, according to Bratina, Marcus was still having trouble leasing even 18% of its space, and in December of 2001 secured an additional variance removing the requirement for retail altogether –at least for a while.
"The board of zoning appeals said that within five years, you need to be in accordance with the original zoning condition of 50% retail on the ground floor," Bratina said.
The parking for Irgens’ new building at 875 E. Wisconsin Ave. will be underground. Underground parking and parking structures associated directly with a specific building are not required to meet the zoning requirement for retail. But Burns said that given the temporary nature of the Hilton’s variance, he sees light at the end of the tunnel.
Burns said he would consider a location in the Hilton structure "if it would be reasonable," he said.
Other remaining downtown Milwaukee auto services shops include Minelli’s Brake and Auto, which is a Citgo station at St. Paul and Plankinton avenues, the Firestone tire and service center at 6th and Wells streets, Babcock Auto Spring at 143 N. Milwaukee Street, and import service facilities O’Reilly Motor Cars at 324 W. Cherry St. and British Auto Service at 333 W. Court St. Just to the north of the downtown — in the Schlitz Park area — is Reliable Auto, on Dr. Martin Luther King Jr. Drive, just north of Pleasant Street.
Jan. 18, 2002 Small Business Times, Milwaukee
