Sydney Hih building assessment hits $1.6 million

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Sydney Hih building assessment hits $1.6 million
Eisenberg threatens lawsuit against alderman

By Charles Rathmann, of SBT

Attorney Alan Eisenberg is threatening to sue Ald. Paul Henningson over Henningson’s discouraging remarks to potential tenants of the Sydney Hih Building at 300 W. Juneau Ave. in downtown Milwaukee.
Eisenberg and at least one potential building tenant claim Henningson not only suggested the building would be torn down as a result of an adjacent redevelopment project, but refused to even bring applications for liquor licenses for lessors before the city’s Utility and Licenses Committee.
The building, which has offered low-cost office, gallery and studio space since the 1970s, is within a 26-acre redevelopment area created by the removal of the Park East Freeway spur.
Last November, Henningson told Small Business Times he had never claimed the building would be demolished, but he did make other remarks about the property, referring to it as "a cancer on the neighborhood."
Henningson also claimed that Eisenberg, whose Knapp Street Realty has the building listed for sale, is likely to "sit" on the property until it impacted redevelopment plans for surrounding land enough for someone to offer Eisenberg the $1 million asking price.
"Right now, he wants a million dollars for it, and that is absolutely absurd," Henningson said. "The place across the street, which used to be a Car-X, sold for $600,000, and that was twice the space. So ostensibly, his land is worth $300,000. And the building isn’t worth a penny."
However, in May, the assessed value of the building rose to $1.6 million from $722,000, according to a city assessment database, and one potential lessor came forward and confirmed that Henningson was claiming the building would be torn down.
"It’s just a matter of time, and we are going to sue him," Eisenberg said of Henningson.
Henningson, who was indicted in January of last year for extortion and embezzlement, did not return a reporter’s recent phone calls regarding the matter.
Eisenberg said several major restaurateurs expressed interest in the property or actually signed leases until they found Henningson would block a liquor license. While one potential lessor mentioned by Eisenberg – Il Mito owner Michael Feker – denied license issues kept him out of the building, one businessman who had plans for a nightclub at the site confirmed Eisenberg’s account.
"I never got to talk to the alderman," nightclub owner Darcius Young said. "His assistant – she told me that he said he would not be for a license there. There may be some other places downtown. He (Henningson) doesn’t have a problem with development, but that place, it was a no-no. He didn’t even have the courtesy to call me or put me on the calendar to even be heard. I filled out an application for a class B license, and I never heard back from them. … On the application, it says they get back to you in six to eight weeks."
Young, who at the time owned a nightclub at the intersection of 17th and Chambers streets on the city’s north side, already had a liquor license he wanted to transfer to the Sydney Hih site. The building was the site of the Mine Shaft night club in the 1970s and 1980s.
"I was told it was going to be for redevelopment – that building might not be there," Young said. "I was told by Alan Eisenberg that the building was not going to be torn down. But I feel (the city) kind of started their redevelopment plans with the building still there."

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Analysis says Sydney Hih redevelopment could be lucrative

According to an analysis performed by a University of Wisconsin-Milwaukee architectural student, the Sydney Hih Building – actually a collection of buildings known as the Nicholas Senn Block – could be profitably transformed through an adaptive reuse process.
The analysis assumes total redevelopment costs of just over $3.3 million, including a purchase price of $850,000.
Peter Sadowski, who presented his master’s thesis on a nearby property May 9, has been studying reuse options for the building since September of last year.
According to Sadowski, factors that would work in favor of redevelopment of the Sydney Hih building at 300 W. Juneau Ave. include the availability of historic preservation tax credits and the fact that new construction would certainly be much more expensive than redeveloping the existing structure.
The building’s location near the Bradley Center on a high-traffic intersection, with an average 24-hour traffic count of 14,200 vehicles is key, with access to the Riverwalk, the Water Street entertainment district and other amenities, according to Sadowski.
Properly redeveloped, the Sydney Hih could support a lease rate of $38 per square foot, Sadowski concluded.
However, challenges for the Sydney Hih building will include parking. The most logical solution, according to Sadowski, would be to purchase adjacent property from the City of Milwaukee, adding that "in efforts to encourage the restoration of this particular property, the city has acknowledged the willingness to contribute either monetarily or with land rights. There may be a good chance that the city would contribute land rights to the north or west, since it will cost them nothing and they will receive a maintained, renovated showcase building that represents the original downtown."
Other challenges would include the need for redesigned exits to comply with international building codes, the need for new mechanicals and plumbing and the fact that floor plates between the different structures in the building are uneven, necessitating a system of false floors to make the space more usable, Sadowski said.

May 16, 2003 Small Business Times, Milwaukee

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