West side of downtown on verge of transformation

The west side of downtown Milwaukee (located west of the Milwaukee River) has struggled for years as class A office space development has clustered on the east side of downtown. The west side of downtown has lower class office space with a high vacancy rate.

Events at the BMO Harris Bradley Center and the Wisconsin Center bring significant amounts of traffic to the west side of downtown. But when those venues are not in use, the west side of downtown often feels like a dead zone.

And the Shops of Grand Avenue’s long running problems with high vacancies and a subpar retail lineup might be the poster child for the struggles of downtown’s west side.

The Shops of Grand Avenue

But now a growing list of projects is planned for the west side of downtown, which could finally transform the area.

Posner Building

Of course, recent headlines have been dominated by plans for a new downtown arena. The NBA says the Milwaukee Bucks need a new arena to replace the BMO Harris Bradley Center, built in 1988. So far new Bucks owners Marc Lasry and Wesley Edens have pledged $100 million and former Bucks owner Herb Kohl has pledged $100 million for the project. No additional plans for an arena have been presented, but if built a new arena would probably be located on the west side of downtown, and most likely north of the Bradley Center. A new arena would also likely spark a redevelopment of the Bradley Center site.

The former Blue Cross Blue Shield building

The other major downtown project in the headlines of late is the long-planned expansion of the Wisconsin Center (the often re-named downtown convention center), which the Wisconsin Center District has wanted to do for years. A consultant’s study done for the Wisconsin Center District recommends creation of a mixed-use entertainment district between an expanded convention center and a new arena.

But while discussion of a new arena and convention center expansion have gotten the most attention of late, several other development projects are in the works that could help revitalize the west side of downtown Milwaukee.

Perhaps more than anything, the west side of downtown needs more residents who will increase the area’s vitality and support stores and restaurants in the neighborhood. Several residential development projects are in the works for the west side of downtown, including:

  • HKS Holdings LLC’s plans to redevelop the Posner Building, located at 152 W. Wisconsin Ave., into 105 apartments and extensive retail space. The seven-story, 106-year-old building located at the corner of Wisconsin and Plankinton avenues is best known as the home of the downtown location for Mo’s Irish Pub. But the upper floors of the building have been vacant for years.
  • Oregon, Wis.-based Gorman & Company is building a 100-unit market rate apartment building at the northeast corner of North 9th Street and West Juneau Avenue in The Brewery, the former Pabst brewery complex.
  • John Mangel III, vice president of business development and acquisitions for Chicago-based HSA Commercial Real Estate, has a contract to purchase the vacant 236,218-square-foot, 10-story office building at 401 W. Michigan St. It was occupied by Blue Cross Blue Shield of Wisconsin until 2006 and has been empty ever since. Mangel is working on plans for a $28 million redevelopment project to convert the building into market rate apartments.
  • Kenosha-based Bear Development LLC plans to convert a 57,626-square-foot office building at 700 W. Michigan St. in downtown Milwaukee into an apartment building. Bear plans to convert the building into a 50-unit apartment building with eight market-rate units and 42 “affordable housing” units for residents with household incomes below the county median.
  • Milwaukee developers Vangard Group LLC and Endeavour Corp. Inc. plan to convert the Germania Building at 135 W. Wells St. into 78 “affordable” apartments. The developers are seeking affordable housing tax credits for the project.

The west side of downtown Milwaukee offers more opportunity to meet the demands for downtown housing development than the higher-priced and more developed east side of downtown, said Vangard Group founder and president Kalan Haywood Sr. Conversion of low quality office space to residential space that is in high demand also helps improve the office market by trimming excess supply, he said.

“We look to provide a balance of the live, work, play dynamic (on the west side of downtown),” Haywood said. “I think (development in that area) has been proven to be fruitful by The Brewery and other projects.”

Previous apartment developments like Library Hill and Boston Lofts have proven that there is a market for housing on the west side of downtown Milwaukee, said developer Gary Grunau.

“There’s a lot of people who like to live in that part of downtown,” he said. “It’s a great place to live.”

Proving that point is The Moderne, the 30-story residential tower built by developer Rick Barrett in 2012 at the southwest corner of Old World Third Street and Juneau Avenue on the west side of downtown. Barrett said more than 92 percent of the 203 apartments in the building have been leased and eight of the building’s 14 condos have been sold. The building also has the Carson’s Prime Steaks and Famous BBQ restaurant on the first floor.

Meanwhile, some office building development is also in the works for the west side of downtown.

Grunau’s Schlitz Park, at the former Schlitz brewery complex, continues to attract new tenants. The Reader’s Digest Association Inc. will move the offices of its Enthusiast Brands division from Greendale to Schlitz Park. The move will bring 200 employees to Schlitz Park, and will fill 54,000 square feet of office space on the first and second floors of the Bottlehouse building in the complex. CorvisaCloud LLC recently announced that it will expand from 18,000 square feet of office space to 35,000 square feet of space at Schlitz Park. Those two deals will bring the 130,000-square-foot Bottlehouse building to full occupancy, Grunau said.

UMB Fund Services will move to Schlitz Park from 803 W. Michigan St. on the west side of downtown. The move will increase the firm’s Milwaukee office space from 77,000 square feet on Michigan Street to 88,000 square feet at Schlitz Park. UMB Fund Services has 250 employees in Milwaukee and plans to add another 100 in the next three to four years.

The UMB deal enabled Schlitz Park to begin a $22 million renovation project, which includes the renovation of the Executive Building and the Stockhouse Building in the complex. UMB will move its offices to occupy the entire two-story Executive Building and three floors of the seven-story Stockhouse Building.

The renovation project also included the demolition of the former Brewhouse Building, which will be replaced with a one-acre public park, and will include the re-opening of Galena Street into the complex.

This is the third phase of $35 to $40 million in renovations at Schlitz Park. In the first two phases, 105,000 square feet of tenant and common areas were renovated and additional conference space and fitness centers were added.

Meanwhile, construction also continues on a 73,100-square-foot building in the former Pabst brewery complex. The building, which is being developed by Blue Ribbon Management, will have a total of 42,000 square feet of office space on the upper three floors and two floors of interior parking with a total of 68 parking stalls.

As for retail in the neighborhood, The Shops of Grand Avenue could be the property on the west side of downtown in most need of redevelopment. The long struggling mall on Wisconsin Avenue was scheduled to be sold in an online auction this month. But selling broker Rockwood Real Estate Advisors said the mall’s owner, a subsidiary of Bank of America investors, has postponed the auction until later this year.

Grunau is part of Wisconsin Avenue Milwaukee Development Corp., a group of business and civic leaders, which hopes to buy and redevelop the Shops of Grand Avenue.

“The catalytic event (for West Wisconsin Avenue) is to figure out what to do with the Grand Avenue,” Grunau said. “If we reposition it in the marketplace with educational, residential, some retail, you’ll find that the whole area will flourish. How can you not flourish when you are between Marquette University, you’ve got MATC alongside of you and you’ve got MSOE downtown? It’s going to grow, but we need to solve the Grand Avenue. Get it repositioned and let it become an asset again.”

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