Charlotte, N.C.-based Ghazi Co. plans to develop a $120 million complex with a 25- to 31-story condominium tower and a 15-story hotel tower on a vacant lot owned by the city of Milwaukee at the southwest corner of North 4th Street and Wisconsin Avenue and across the street from the Midwest Airlines Center.
The building would have about 200 condominiums, a 175-room boutique hotel, 350 indoor parking spaces and 100,000 square feet of entertainment, retail, restaurant and office space on the first and second floors. The exact height of the condominium tower will depend on the market’s response to the project, city officials said.
The U-shaped building would also include a public plaza between the condominium tower and the hotel tower.
“This is a critical site downtown and we believe that this will be a major catalytic project,” said Dan Casanova, real estate specialist for the Milwaukee Department of City Development. “This will help anchor (The Shops of) Grand Avenue and support the Midwest Airlines Center. This would become a 24/7 entertainment hub in the heart of downtown. It would also add residents and hotel rooms to Westtown.”
Ghazi Co. owner Afshin Ghazi could not be reached for comment.
The entertainment portion of the development is something that the downtown area badly needs, said Doug Neilson, president and chief executive officer of Visit Milwaukee.
“We lack downtown entertainment in the way of a 365-day-a-year destination,” Neilson said. “We have sports venues, theaters and museums and that’s great. But what we don’t have is a 365-day-a-year just walk in destination. This is a project that actually improves, in the eyes of meeting planners and convention delegates, the image of what is happening in Milwaukee. It enhances us as a destination.”
Neilson said Ghazi Co. representatives have indicated that the entertainment portion of the development could include a bowling alley, movie theaters and destination sports themed restaurants such as ESPN Zone or Fox Sports Grill.
The project would also help Wisconsin Avenue, which Neilson said, “is in need of a renaissance.”
The Department of City Development is recommending that Ghazi be granted a six-month option for the property, with two possible three month extensions.
“(With the option) we’re giving them the certainty of site control to secure financing and finalize their design,” said Joel Brennan, assistant executive director for the city’s Redevelopment Authority.
The sale of the property is expected to close, and construction is expected to begin, in the spring of 2008. The city plans to allow Ghazi 30 months after closing to complete construction.
Ghazi is not seeking tax incremental financing (TIF) for the project, at least not yet.
“It’s early in the process and it’s possible something might come up,” Casanova said.
However city officials are proposing to subsidize the project by selling the site to Ghazi for $1. The city was originally seeking $3.46 million for the site. However, Ghazi will have to remove some contamination from the site, will have to move a We Energies steam line on the site and is planning to add streetscaping, the public plaza and a new bus shelter. The $1 property sale price is being offered in consideration of those public improvements, Casanova said.
Ghazi has indicated that it is talking to White Plains, N.Y.-based Starwood Hotels & Resorts Worldwide Inc. and Beverly Hills, Calif.-based Hilton Hotels Corp. as potential operators for the hotel, Casanova said. Starwood’s brands include Westin, Sheraton and W hotels and Hilton’s brands include Hilton, Hampton Inn and Embassy Suites. The Hilton Milwaukee City Center hotel is directly west of the site.
“I think they’ve talked to a number of different flags,” Brennan said.
About a year ago Ghazi announced that it was planning a hotel and residential development for the site. The company responded to a request for proposals (RFP) from the city seeking developers interested in doing a significant project on the property.
City officials are now comfortable enough with Ghazi’s plans to make a recommendation to aldermen that the company be granted an option for the site, Brennan said.
City officials estimate that the development would create 300 jobs and would generate $2.2 million in annual property taxes, between $731,000 and $2 million in annual sales taxes and $400,000 in annual hotel taxes. City officials also estimate that the project will result in $13.3 million in annual direct guest spending and $22.2 million in annual indirect guest spending.
The property has been vacant for years and previous attempts by the city to attract a hotel development to the site have failed. In 2004, an investors group led by John Hunzinger, president of Hunzinger Construction Co., was granted an option for the site to build a 255-room Sheraton hotel. But those plans were dropped after the project was delayed due to contamination at the site.
In 2000, plans for a 300-room Embassy Suites hotel at the site, which would have been developed by Anthony Palermo and a group of investors, also fell through.
City officials are hoping the third time is the charm for the 4th and Wisconsin site.
“Nothing is every certain until the shovel is in the ground,” Brennan said. “It is far better that we take things slowly and do it right than take things quickly and haphazardly and get it wrong.”
