Chicago-based real estate development firm R2 Companies unveiled conceptual designs and renderings for the redevelopment project it hopes to eventually undertake at the massive, 1.1 million square-foot downtown Milwaukee post office complex along the Menomonee River.
The renderings reveal plans for two glassy towers, one for residential use and one for office use, to be built on the eastern and western ends of the structure. A feasibility study included on a website R2 Companies built specifically for the project indicates the developers envision attracting a big box retailer to move into renovated street-level retail space within the structure, as well as restaurants and bars.
Conceptual plans include boat docks and kayak launches along a new segment of the riverwalk built along the building's 1,500 feet of Menomonee River frontage.
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R2 Companies purchased the building at 341 W. St. Paul Ave., which is considered by some to be one of the city's ugliest structures, from a group of private investors in 2015 for $13.1 million.
The sprawling complex takes up more than 9 acres of riverfront property in between some Milwaukee's busiest neighborhoods: Walker's Point, the Historic Third Ward, East Town and West Town.
Matt Garrison, R2's managing principal, said at the time of the purchase the firm was planning to transform the sprawling structure into a mixed-use development with street-level retail. A BizTimes cover story in November took an in-depth look at the developer's initial plans for the property. Click here to see Garrison's comments about the project at the 2015 BizTimes Milwaukee Commercial Real Estate and Development Conference.
According to plans released Friday, the changes would create a total of 980,000 square feet of office space between renovations to the existing structure and an office tower built on its west end. A 282,000 square-foot residential tower would be built on its east end.
Renovations to the existing structure would create 300,000 square feet of space to be filled by restaurants, bars and entertainment venues as well as 212,000 square feet of space for a big box retailer. A 13,000-square-foot extension of the river walk and a 14,000-square-foot pedestrian bridge connecting the building to the Harley-Davidson Museum across the Menomonee river would also be added, according to the plans.
But Garrison cautioned that the plans are contingent upon the U.S. Postal Service, which has a lease in place at the building for roughly three-and-a-half more years with an option to extend for up to 30 years.
[caption id="attachment_125026" align="alignright" width="159"] Matt Garrison[/caption]
"We can’t control the USPS timeline; they are well within their rights to stay at the site long term," Garrison said Friday. "What we are proposing is a long term vision of the post office building and site. We believe it will happen eventually. This could be as soon as three years and as long as 20-plus.
"The USPS is focused on their business. We know the current facility is outdated and inefficient; however it is also very expensive to relocate. These are challenging problems, but we believe they will work themselves out over time. Often the best sites of this kind are also the most challenging, that’s why they aren't developed yet."
Another unique challenge to redeveloping the site is working around the train tracks that go through the building.
"We take a long term view of this type of project, and come into it fully understanding the challenges and potential timelines," Garrison said. "We have capitalized the project in a way that we can take a patient approach. Our goal is to do something transformative and that will not happen overnight. But we believe it will happen, and we wanted to release the concept and advance discussions in Milwaukee."
Garrison told BizTimes last year he plans to spend $100 million redeveloping the existing building and around $200 million on new building construction.
The U.S. Postal Service purchased 64 acres at the southwest corner of East College and South Pennsylvania avenues in Oak Creek in 2008 with the intent to develop a new 820,000-square-foot mail processing and distribution center.
At the time, the Postal Service announced it would work with Milwaukee developer Cobalt Partners to build a more efficient building on that location and vacate the downtown facility, which was said to be obsolete. But the project never moved forward.