An affiliate of Good City Brewing Co. will assume nearly $3.3 million in debt and pay $35,000 to acquire the ownership interest in Century City I LLC, the entity that owns the first new building in the Century City Business Park on Milwaukee’s northwest side, according to a draft Department of City Development report.
The Century City Redevelopment Corp., a city entity, and General Capital Group both invested $400,000 each in Century City I LLC to develop the 53,000-square-foot industrial building. Good City announced last week
that it would buy the building and move office and warehouse operations there from its location on Farwell Avenue on Milwaukee’s east side.
Unlike a traditional real estate transaction, Good City is buying the membership interest in Century City I LLC of CCRC and General Capital. The city and General Capital will split the $35,000 payment, leaving each with a $382,500 loss on the investment.
The Milwaukee Economic Development Corp. approved a loan of up to $3.5 million to help finance construction of the building in 2015. A little less than $3.05 million was ultimately drawn on the loan, according to Linda Gorens-Levey of General Capital.
Good Opportunity I LLC, the Good City entity, will assume that debt along with a $236,500 loan from the Redevelopment Authority of the City of Milwaukee tied to the land.
Good City will also pay rent, taxes and other costs while it occupies the building until the transaction closes, cutting in to the potential loss. Several approvals from city entities are still required before the expected closing in early October.
“It was never about the real estate, it was always about economic development and job creation,” Gorens-Levey said. “Our hope, just like the city’s hope, is that this spurs additional development.”
The redevelopment of Century City, the name given to the former A.O. Smith and Tower Automotive site in the 30th Street corridor near Capitol Drive, spans 84 acres and has seen millions of dollars invested by the city. The project has been slow to gain traction as the first new building on the site sat vacant for more than two years.
Jeff Fleming, a Department of City Development spokesman, acknowledged the development has been slower than the city would like, but progress is now being made.
“The city doesn’t invest in these things with the goal of making money,” he said of the first building, before adding the intention was not to lose money either.
Fleming pointed out the city could still recover the $236,000 loan related to the purchase of the land and also stands to benefit if Good City’s purchase spurs additional development and job creation.