Small Steps Adding Up for Park East
Milwaukee County to begin seeking development proposals for first 2-acre parcel Monday
By TOM DAYKIN
tdaykin@journalsentinel.com
Posted: Feb. 19, 2005
After workers began knocking down the Park East Freeway nearly three years ago, the barren lots left behind were likened to the dark side of the moon.
This site, near E. Ogden Ave. and N. Broadway, was the former Milwaukee Center for Independence building, 1339 N. Milwaukee St. Developers are planning to build about 130 condominiums on the land.
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Now, small steps are appearing on that moonscape that eventually could bring a giant leap for the Park East area, which city officials and developers see as the new frontier for Milwaukee development.
"It really seems like a terrific piece of property," said developer Paul Dincin, whose Chicago-based Tandem Developers LLC has built housing in the Brewers Hill area, just north of downtown.
Investors bought the former Milwaukee Center for Independence building, 1339 N. Milwaukee St., and have begun demolishing it. They'll replace it with about 130 condominiums. Another developer last week agreed to buy the Sydney Hih building, 300 W. Juneau Ave., with plans to remodel it into 15 condos.
And on Monday, Milwaukee County will begin seeking development proposals for the empty block bordered by N. Milwaukee, N. Jefferson and E. Lyon streets and E. Ogden Ave. That 2-acre parcel will be the first of 16 vacant acres of former freeway land that the county is putting up for sale. Those parcels are the centerpiece of the 64-acre Park East redevelopment area, which covers both buildings and empty lots.
The county-owned parcels running along downtown's northern edge are drawing developers like Dincin, who entered Brewers Hill in 1998 and has since built around 150 condos - with another 150 units in the planning and construction stages. He compares the Park East's development potential to where Brewers Hill was around 10 years ago.
"The land is in the perfect position to do the same thing," Dincin said.
The western portion of the Park East is adjacent to the former Pabst brewery, which is slated to be redeveloped into a $317 million retail and entertainment complex known as PabstCity. Some developers said PabstCity could help spur additional construction in the Park East.
After long delays in redeveloping the Park East, City Development Commissioner Richard "Rocky" Marcoux acknowledged that some people are skeptical.
"I think the critics will be silenced when they see the amount of activity generated in '05," Marcoux said.
Still other developers are proceeding on their privately owned properties in the Park East. Mandel Group Inc., for example, plans a 500-unit condo and apartment complex with 25,000 square feet of retail space that will replace the former Pfister & Vogel tannery at N. Water and E. Pleasant streets.
'Whole slew of ideas'
However, much of the buzz is over the county-owned lots, which mainly run north of W. Juneau Ave., E. Knapp St. and E. Ogden Ave., between N. 6th and N. Jefferson streets.
"There's been a lot of interest," said Tim Russell, acting director of the county's economic and community development division.
Developer Randy Scoville, a partner on the Milwaukee Center for Independence site, is among those considering a response to the county's request for proposals. The first county lot being sold is immediately northeast of Scoville's condo project.
"It's in our best interests to try to control what happens on adjacent sites," said Scoville, a principal at Big Bend Development LLC.
Others are kicking tires as well.
"I've got a whole slew of ideas of what I think works there," said Bruce Westling, a retail real estate broker at MLG Commercial.
Russell is recommending the county list a minimum sale price of $2.5 million for the entire parcel, with minimum prices of $1.42 million and $1.43 million for either half of the county land. The sale proposal, which is scheduled for a Monday review by a County Board committee, will have an April 15 response deadline. Russell expects to recommend a developer to the board by June.
Russell expects to move promptly on offering additional parcels for sale, moving westward from the first lot.
He said the lots east of the Milwaukee River will likely be posted for sale by midyear, with the last lots west of the river made available for sale by March 2006.
The only parcel being withheld is west of N. 6th St. and is being used as a staging area for the Marquette Interchange's reconstruction.
The parcels are being put up for sale as county officials receive the results of environmental tests conducted on each lot, Russell said. A property's environmental condition, and any cleanup that might be needed, is a factor in determining the sale price.
City officials estimate that new development within the Park East area will total at least $250 million. The freeway stub's removal and replacement with surface streets and a new bridge cost $45 million, with $21.25 million in federal money, $1.2 million in state money and $22.55 million in city money.
The city's Park East master plan will guide development on both privately owned and public parcels.
The first county lot being offered for sale is in an area called the Upper Water Street District. It runs along N. Water St. from E. Brady to E. Cherry streets, and is targeted mainly for a mix of residential and retail development, such as Mandel Group's project.
Another area is the Lower Water Street District, which runs from E. Cherry St. to E. Juneau Ave. The master plan said it will likely include residential developments overlooking the river, along with small and midsize offices and street-level retail and nightlife businesses. That area includes Scoville's condo development.
The third area is largely between W. McKinley and W. Juneau avenues, including large parcels near I-43 that are potential locations for major office buildings, according to the plan. The plan also allows for smaller residential projects, including developer Rob Ruvin's plans for creating condos within the Sydney Hih building.
The plan targets the area west of the river for regional entertainment venues. Bradley Center officials have approached representatives of the Forest County Potawatomi nation to discuss the possibility of moving the tribe's casino to the center's parking lot between W. Juneau and W. Highland avenues, and N. 6th and N. 5th streets. The tribe plans to expand its current casino in the Menomonee Valley, but the project is on hold pending negotiations on a new gaming compact with the state.
The Park East master plan was unveiled at City Hall in November 2002. City officials had hoped to see it approved by the Common Council within a year.
But in March 2003, the council began studying a request from labor and community groups for a Park East community benefits agreement. That agreement would have required developers on both public and privately owned land to provide construction jobs at union-level wages and affordable housing.
Developers and then-Mayor John O. Norquist opposed the measures, saying they would hamper development. That debate lingered for more than a year. After the April election of Mayor Tom Barrett and a new Common Council, the council in June rejected the proposal and passed the Park East plan.
Benefits deal resurfaces
However, the issue resurfaced in October with a majority of County Board supervisors endorsing the proposal. This time, the guidelines focused just on the county land.
The proposal passed the board, but was vetoed by Milwaukee County Executive Scott Walker. Earlier this month, the board voted to override the veto.
Some real estate professionals, including office building developer Joel Lee, said the community benefits requirements will hurt development of the county-owned parcels. The guidelines' supporters dispute that notion.
Lee also said the downtown office market isn't setting the world on fire. Most of downtown's major office towers are east of the river, raising questions about prospects for development between W. Juneau and W. McKinley avenues.
Also, the county's request for proposals could make it difficult for developers to craft a response, depending on the level of detail it demands, said James T. Barry III, president of James T. Barry Co. commercial real estate brokerage.
Still, Monday's action is a step forward, with wider implications for development throughout Milwaukee, Marcoux said.
"The Park East will show this city can do development in a logical fashion and a cooperative way, so that investors will bring more money into this city," Marcoux said.
