Western Front

    Last updated on May 13th, 2019 at 02:36 pm

    For years, the downtown office market west of the Milwaukee River has been considerably weaker than the market on the east side of downtown, where all of the central business district’s class A office towers are located. When Manpower Inc. moves its headquarters from Glendale to a new building to be constructed just west of the river and south of Schlitz Park, it is expected to provide a major boost to the west side of downtown, to Dr. Martin Luther King Jr. Drive, to Old World Third Street and to the Park East Freeway corridor.

    "I think it’s very positive for downtown – it can do nothing but help the downtown area when you get (900) employees down here," said Tom Bernacchi, vice president of Milwaukee-based Towne Realty Inc. "It’s going to be fabulous. Certainly, this is going to help spur some of the development that has not been planned yet for the Park East."

    The King Drive Business Improvement District (BID) gave Schlitz Park a $20,000 grant to help attract Manpower.

    "It’s one of many signs in the area that people are investing in King Drive and want to be in an urban district," said Tieg Whaley-Smith, executive director of the King Drive BID. "This is part of a great movement going into the area. And to have that many people in our district is definitely good for our district."

    "Up and down MLK drive, what you’re going to see is property values go up," said Bruce Westling, president of NAI MLG Commercial.

    King Drive is already attracting more development. For example, Madison-based Gorman & Co. is building Park East Enterprise Lofts, a four-story development with 85 apartments and some retail and office space on the west side of King Drive and north of Vliet Street. The project is designed to provide entrepreneurs with an affordable place to live and work

    Old World Third Street also has attracted new business recently. Hans Weissgerber III opened the Old German Beer Hall at 1009 N. Old World Third St., in a space formerly occupied by Guse’s City Hall.

    The addition of Manpower’s headquarters, and its workforce, which the company says could grow to 1,200 in the next five years, is expected to help attract even more development to the area.

    "I think this is a boon to downtown and will have a catalytic effect on downtown," said Jim Barry III, president of Colliers Barry.

    However, at the same time that the west side of downtown Milwaukee eagerly prepares to welcome Manpower, the neighborhood is about to lose a major office tenant. Blue Cross Blue Shield of Wisconsin plans to move from 401 W. Michigan St. in downtown Milwaukee to Summit Place, located in the former Allis-Chalmers plant in West Allis. With the move, Blue Cross Blue Shield will pull about 750 employees out of the west side of downtown and leave a 10-story, 235,000-square-foot office building vacant.

    The Blue Cross Blue Shield building is owned by New York-based iStar Financial Inc. A representative for the company did not return a phone call seeking comment.

    It will take time to fill the 27-year-old building with new tenants, local commercial real estate brokers say.

    "It may be a challenge," said Andrew Jensen principal of Grubb & Ellis|Boerke Co. "It’s even a challenge to fill that much space in the suburbs. It’s a decent building. There’s some parking. It has a larger floor plate. It’s just going to take some time (to fill)."

    The building will be competing with more attractive office buildings in downtown Milwaukee that have large amounts of available space, Jensen said, citing the 1000 N. Water St. and Milwaukee Center (111 E. Kilbourn Ave.) buildings.

    CB Richard Ellis represents iStar Financial on a national level, so The Polacheck Co. Inc., a CB Richard Ellis Company in Milwaukee, will probably represent iStar’s efforts to find new tenants to fill the Blue Cross Blue Shield building, according to Steve Palec, senior vice president at Polacheck.

    The Blue Cross building needs more parking, but has some advantages, including a large amount of space for each floor, Palec said. It could be an attractive alternative for tenants seeking more affordable space, he said.

    "If parking is addressed, it’s a strong candidate for bringing a suburban user downtown," Palec said. "You could make the case that if you are going into a class B suburban building, why not come into this building."

    The Blue Cross Blue Shield building could provide downtown amenities at a class B suburban office space price, Palec said. But city officials should look for ways to add more parking for the building, he said.

    "The pattern you are seeing with downtown deals is somebody has to address parking," he said.

    City officials also are hoping to attract development to a prominent underused property on the west side of downtown. The city has issued a request for proposals for the surface parking lot at 401-41 W. Wisconsin Ave. The two-acre site is located south of the Midwest Airlines Center and between The Shops of Grand Avenue and the Hilton Milwaukee City Center hotel.

    For that site, city officials want to attract a mixed-use development with restaurant or retail space on the ground floor and hotel, office or residential space on the upper floors.

    The city’s asking price for the property is about $3.5 million. The city is also offering developers the opportunity to split the property into two pieces and submit plans for the 32,400-square-foot parcel on the east side of the property or the 54,000-square-foot parcel on the west side of the property.

    If one building is constructed on the entire site, city officials want it to be at least eight stories tall. If the property is split into the two separate parcels, then city officials want the building on the east side of the property to be at least 12 stores tall and the building on the west side of the property to be at least eight stories tall.

    "I think we’ve made it pretty clear we’re looking for something that is pretty substantial," said Alderman Robert Bauman.

    Brookfield-based Hunzinger Construction Co. had planned to build a 225-room Sheraton Hotel on the site, but the company dropped those plans due to environmental concerns at the site.

    If the right project doesn’t come along this time, the city should continue to wait rather than sell the property for a less impressive development, Bauman said.

    "We’re going to make sure that we do it right," Bauman said.

    "Vibrancy comes from people," Palec said. "Whatever can bring more people to an area will bring the next round of growth."

    Interested parties

    The site has attracted interest from several parties, including New York-based Ashkenazy Acquisition Corp., the new owners of the Shops of Grand Avenue, Bauman said, which obviously has a vested interest in seeing a quality development next door.

    The 401-41 W. Wisconsin Ave. property is a key part of the city’s plan to improve the Fifth Street corridor between the Amtrak train station and the Midwest Airlines Center. The city’s RFP suggests that a plaza could be built at the corner of Fifth Street and Wisconsin Avenue.

    This year, a $15 million renovation of the Amtrak train station is expected to begin. The project, paid for by federal, state, city and private funds, will modernize the facility, improve its appearance and convert it into a hub for train and bus services. The facility would see greater use if the Chicago area Metra commuter rail service is extended from Kenosha to downtown Milwaukee.

    The convention center also has improvement plans. Franklyn Gimbel, chairman of the Wisconsin Center District, wants to complete the third phase of the expansion of the Midwest Airlines Center north to Kilbourn Avenue. However, the expansion would require a tax increase, which would be difficult to obtain in today’s political climate.


    "Clearly the site (at 401-41 W. Wisconsin Ave.) sets up for a catalytic development," Westling said. "But really it’s going to feed off things already happening in the area."

    Those other things include:

    • OfficeMax recently opened a new store at the Shops of Grand Avenue, filling the long vacant Woolworth space.
    • In 2004, T.J. Maxx, Old Navy, Linens ‘n Things and Famous Footwear all opened stores in the mall, significantly reducing its vacancy rate.
    • A Capital Grille restaurant will open in the 540,000-square-foot Reuss Federal Plaza building, 310 W. Wisconsin Ave., this summer. Philadelphia-based RAIT Investment Trust, which controls the building, is renovating the building’s lobby in an attempt to attract more tenants. The Milwaukee County Department on Aging plans to move from Schlitz Park to 48,000 square feet of space in the Reuss building.
    • The 22-story Wisconsin Tower at 606 W. Wisconsin Ave. is being converted by City Real Estate Development LLC into 76 residential condominiums, starting at $120,000 each. Residents are expected to start moving in Feb. 1.
    • The former 12-story Hotel Wisconsin at 720 N. Old World Third St. is being converted by Aventura, Fla.-based Wisconsin Hotel Co. into residential units.
    • Oxford Capital Group Inc. plans to spend $5 million to $7 million to convert the 148-room Howard Johnson Inn & Suites at 176 W. Wisconsin Ave. into a Hampton Inn & Suites, which is a higher-end hotel.
    • "Johnny V" Vassallo and other investors purchased the 108,334-square-foot Posner building at 152 W. Wisconsin Ave. and plan to renovate the building and attract more tenants.

    Prime sites in the west part of downtown for future development include a block used mostly for parking at Clybourn Street and 2nd Street owned by Wispark LLC, the real estate development arm of Wisconsin Energy Corp., and a half block surface parking lot at North Old World Third and Wells streets owed by Towne Realty, Bauman said.

    Other potential future development on the west side of downtown include the redevelopment of the former Pabst brewery, which is being contemplated by Zilber Ltd.

    Meanwhile, the future of another mainstay of the west side of downtown, the Bradley Center, also is in flux. Ulice Payne, chairman of the Bradley Center Board, said the community must begin discussions on building a new arena for the Milwaukee Bucks because the 17-year-old Bradley Center is quickly becoming outdated in the NBA.

    Small Business Times reporter Eric Decker contributed to this report.

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