City eyes development that would bring Wisconsin's tallest building, but downtown alderman isn't on board
MILWAUKEE (CBS 58) -- City development officials announced Wednesday, July 24, that they picked a developer to overhaul the land currently occupied by a parking garage for the Marcus Performing Arts Center. The proposal is anchored by a building that would be more than 50 stories tall, making it the tallest in Wisconsin and the tallest building in the world made from mass timber.
However, the alderman who represents downtown suggested the announcement was sour grapes after another developer withdrew their proposal earlier in the day.
Ald. Robert Bauman said he would not support the Department of City Development's request to have the Common Council approve a one-year window for the chosen developer, The Neutral Project, to have exclusive negotiating rights with possible tenants.
The Madison-based Neutral Project did not immediately respond to an interview request Wednesday. Its proposal includes a multi-building development that would contain as many as 750 residential units, a 300-room hotel, nearly 200,000 square feet of office space, 40,000 square feet of retail and a 1,100-space parking garage.
City and theater officials agree overhauling the space is long overdue, bringing more energy and traffic to an extremely valuable piece of land that sits between the Milwaukee River and Water Street.
The proposal includes housing, retail, office space and a new parking structure.
"I think having an iconic building in this neighborhood is in line with what we're trying to do with the Theater District," Kevin Giglinto, president and CEO of the Marcus Center, said in an interview. "With what we're trying to achieve with our outdoor grounds and having this great cultural gathering place right in the center of downtown."
Bauman said he was skeptical because of the proposal's scope, suggesting it is far larger than what is currently feasible in terms of downtown demand.
"My first impression was, 'pretty pictures, nice architecture,'" Bauman said. "But this, I have many questions about financial feasibility, about the market's ability to ability to absorb a project of this size."
The project would cost more than $700 million, and Bauman said he was also skeptical about the developer's ability to secure that level of funding. He also bristled at the idea of building the development in multiple phases because the city had been burned by past projects where future phases never materialized.
"I'm not sure where this money is coming from," Bauman said. "I don't know is the straight answer. I'm sure who's gonna finance this or how it's planned to be financed."
A spokeswoman for the Department of City Development (DCD) said Commissioner Lafayette Crump was not available for an interview Wednesday and said the agency's press release would speak for itself.
The release included a quote from Milwaukee Mayor Cavalier Johnson, who stated the project aligns with his long-range goal of growing the city's population to one-million people.
“To do that, we need to be aggressive and reach for new heights," Johnson said in the release. "This project will help us do just that, literally aiming to set local and global records, but just as importantly add density and activity to an underutilized City-controlled parcel in downtown Milwaukee."
Other developer backs out, slams city agency
The DCD's announcement came on the same day Milwaukee-based New Land Enterprises sent a letter to the agency stating it was withdrawing its bid for the Marcus Center garage proposal. Bauman said a total of three developers had submitted proposals for the project.
The letter said the city's criteria and interview questions were "handled unprofessionally and inconsistently."
New Land's managing director, Tim Gokhman, said he grew tired of the process. As an example, he said DCD officials at one point asked the developer whether they'd preleased any of their proposed retail space even though one of the bidding conditions was to not discuss the project publicly.
Gokhman said the breaking point was a timeline that continued to drag.
"This RFP process, we were told a decision would be made by May 31," he said. "All of a sudden, July, after we withdraw, an award is made. That doesn't work."
Bauman also blasted the agency's handling of the developers' proposals.
"I think that's Mickey Mouse," he said. "That's unprofessional."
Gokhman said New Land's proposal would have cost about $350 million. He added some of his potential financers suggested even that was too ambitious of a project, but Gokhman said the city needed to go big given the value of the land in question.
"The Marcus Center garage is one of the most important development sites in the city of Milwaukee," he said.
However, both Gokhman and Bauman questioned whether there was enough demand to pay off a $700 million project in that space. Gokhman said any residential building on the land should focus on workforce house, which typically includes state and/or municipal subsidies to allow for rent prices that sit between traditional affordable government housing and market-rate apartments.
"We have four new luxury high-rise towers," Gokhman said. "It feels like we've done a good job of supplying the high-end market."
Currently, the 25-story Ascent building, which Gokhman developed, is the world's tallest mass timber building. The Ascent stands four blocks east of the Marcus Center.
So, what now?
The DCD proposal would grant a one-year exclusive negotiating window to The Neutral Project. However, that requires approval from the Common Council.
Bauman said he would not sponsor such a file, and he indicated it was highly unlikely any other council members would do so knowing it was opposed by the alderman in whose district the proposed project sits.
Instead, Bauman called for the city to bring in an outside expert to conduct a study of the property in order to gauge what type of development is most realistic.
"Could [the selected proposal] be feasible? Maybe," Bauman said. "But I want to hear that from an outside, independent expert that the city would hire to review the project."
Giglinto said he hoped there could be an agreement on a development plan relatively soon because the longer this goes on, the more money the Marcus Center will spend to maintain an outdated garage.
"It could affect us in that we've been putting capital into keeping that building operational," he said.