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He Built this City

5/1/2012 - Story by John Rondy

Barry Mandel was 54 and had not swum competitively since high school. But he had just accepted a challenge from Rich Lynch, a former co-captain of the UW-Madison swim team – a race.
The wry offer came after a marathon negotiation over $1.7 million in contested costs for the 37-story University Club Tower that Mandel was developing. J.H. Findorff & Son was the
construction company hired for the job, and Lynch, its president, had been haggling with Mandel over changes he’d ordered and which company should pay the costs. After six hours of
negotiations, they were still $25,000 apart.

Rather than settle the dispute in court, Mandel and Lynch agreed to swim a 100-meter race, with $25,000 going to the victor. Mandel would later learn about Lynch’s days as a college racer, but he refused to back down.
Instead, he hired Olympic swimmer Adam Mania as a trainer. Mandel was 36 years past his peak form as a swimmer, but he started training and even got some racing advice along the way from Olympian Mark Spitz (an acquaintance of Mania’s). Mandel stuck to it, training for three months.

On the day of the race at the Schroeder YMCA, Mandel donned Mania’s robe from the 2004 Olympics over a body suit. When Mandel’s wife, Eileen, saw the bigger and taller Lynch emerge from the locker room, she told a friend that her husband didn’t have a chance. But with the audience of some 50 friends of the two contestants cheering wildly, Mandel took Spitz’s advice and went out fast. Leading by a tenth of a second after two lengths, Mandel felt excruciating
pain, but he kept pushing to the finish.
“We both hit the wall and looked up and weren’t sure who won,” Lynch remembers. “We were both exhausted.”

Improbably, Mandel was the victor, nipping Lynch by 12-hundredths of a second. Mandel wonthe $25,000, but between training costs and a donation to Schroeder, he spent more than he
saved.

Building off of that success, Mandel started to swim competitively on the masters circuit, where he was part of a record-setting relay team for his age group. He also cemented a friendship with Lynch as a result of the race. “Barry is Barry,” Lynch says. “He always seems to find the right
people and most interesting people to work with him on what he is doing.”

And that has had a huge impact on Milwaukee. Perhaps no developer has been more responsible for Downtown’s residential renaissance. Mandel was the first developer to prove suburbanites would move Downtown, thanks to his $85 million East Pointe Commons development on an abandoned freeway corridor on the Lower East Side. This set the stage for
all kinds of development in the greater Downtown area, culminating with his signature University Club Tower, where some of the state’s wealthiest residents reside.

In a field that can often be cutthroat, Mandel has managed to run his business with integrity. In a city where some developers care more about making money than creating great architecture,
Mandel has steered a middle ground, avoiding cutting-edge design yet aiming for a certain level of quality and learning from his critics. And at a time when many developers can’t get financing for anything, Mandel is still getting deals done and buildings built.
“He is probably more the type that you would see in a major city like New York, Chicago or L.A.,” says developer Gary Grunau. “Some people may feel uncomfortable with that personality, but as you get to know the guy, there is a lot behind Barry’s story.”

A Family of Lawyers Barry Mandel was born in 1953 and grew up in a middle-class Jewish family in a two-bedroom home near 53rd and Keefe streets. With two siblings occupying one of the two bedrooms, he
slept on a rollaway bed in the dining room. “It wasn’t a hardship at all,” he says. “It was part of being a family. I was given everything I could have as a child."

His father, Marvin, was a developer and would talk business at the dinner table, giving Barry an early education in how to analyze a real estate deal. Every Sunday, the senior Mandel would
take the family to look at potential development sites. “We may not have discussed as many political things, but I certainly understood the development process – most importantly, managing risk,” says Mandel, now 58.

Mandel graduated from UW-Madison with an economics degree then got his law degree from Georgetown University. “The expectation was that everyone in our family would go to law school [all three children did] and then decide what they want to do with their life,” Mandel says. Cindy is a retired trust attorney in Chicago. Elder brother Robert manages their deceased dad’s real
estate holdings.

Barry went on to work as a real estate attorney in Kansas City, Mo., from 1978 to 1981. But he didn’t like administering transactions; he wanted to be the one making deals happen. Mandel returned to Milwaukee and worked for his father’s management company for a time before heading out on his own and doing his first deal with a partner, an apartment complex in Hales
Corners. Then he got connected with Trammell Crow, one of the nation’s largest developers and a real estate behemoth that would put up some 40 buildings in this metro area, including the former Wyndham Hotel and the Milwaukee Center. Mandel was hired to launch the company’s residential division, concentrating on suburban development.

“When you talk about things that Barry has done, you associate it with quality,” says Breck Hanson, head of commercial real estate for Associated Bank in Chicago. Hanson has loaned
the Mandel Group more than $200 million for its developments, primarily when he worked at LaSalle Bank. “He’s a former Trammell Crow partner, and I think that pedigree brings the integrity and the sophistication. That was a good background for Barry.”

Another key influence was Eileen Murphy, the woman who would become his wife. While having dinner with his father at Grenadier’s in 1985, Mandel spotted a woman in an interesting outfit
walking by on the sidewalk. On impulse, he ran after her and struck up a conversation, and he learned she had designed the clothes herself. “It was actually her creativity that attracted me,” he says.

To some, Mandel bears a resemblance to Gene Wilder’s Willy Wonka character; Mandel typically wears bow ties because, he says, it makes him feel more “genteel.” But he became very aggressive in this case. “I pursued Eileen like a mad dog until she married me,” he says.

“And in the end, it turned out to be a true partnership in every way. She has stretched me in ways I never thought I would go. She broadens my horizons.”
Mandel recalls a time long after they were married when he was having second thoughts about developing apartments on the site of the old Pfister & Vogel tannery. There was extensive environmental contamination, and his business associates were reluctant to take it on. Late one night, as they sat in their car and viewed the site across the river at Schlitz Park, Eileen argued
in favor of it. Finally, Mandel recalls, “She turned to me and said, ‘Are you going to retire, or are you going to be my man?’ ” Mandel did the development.

Mandel’s first major project Downtown, East Pointe Commons, grew out of his work with Trammell Crow. He was familiar with the site from riding the bus as a youth down Ogden Avenue to the Jewish Community Center. Once a thriving neighborhood, it was now vacant land– nine square blocks decimated for a freeway that was never built. Mandel would sometimes drive through the area, visualizing what might be. Although others couldn’t see the site supporting anything more than affordable housing, Mandel had a different vision.

Mandel and Trammell Crow were not the city’s first choice for East Pointe. But when the original developer dropped out because he couldn’t secure financing, Mandel was approached by the
city to take on the project in 1988.
But getting the financing would be tough. Mandel’s first break came during a round of golf at Brynwood Country Club. He was on the 12th hole when a representative of Wispark, the real
estate development arm of the former Wisconsin Energy Corp., approached Mandel to say the company had an interest in providing some capital for East Pointe. “After that, I hit an
unbelievable drive down the middle of the fairway,” Mandel laughs.

But even with Wispark’s $5 million equity contribution, banks were not awarding many real estate loans during the savings and loan crisis, even to a firm with the financial might of
Trammell Crow. Sensing the opportunity slipping away, Mandel skipped the corporate chain of command, calling chairman F. Trammell Crow in Dallas. He told Crow a Japanese bank was
willing to make a $17 million loan for the project’s first phase, but they needed a personal guarantee from the head man. The legendary real estate magnate didn’t hesitate, telling Mandel
he’d support him any way he could. Within the hour, Mandel was fielding phone calls from several Trammell Crow partners who were incredulous at his bold stroke.

By 1991, Mandel and Trammell Crow had finished the first phase – 188 apartments – of East Pointe. But with the real estate market tanking, Trammell Crow decided to pull out of Milwaukee and turned the East Pointe project over to Mandel, who decided to form his own company.

“At the time, Mandel’s judgment in pushing forward with East Pointe was roundly ridiculed in the local real estate community,” recalls Milwaukee Ald. Bob Bauman, who was then a practicing real estate attorney. “But it turned out Downtown was viable as a residential neighborhood. The
rest is history.”

Mandel had been doing suburban real estate for years and lived in a suburban home himself. So he had an idea of the kinds of interior amenities potential renters or condo buyers from the suburbs would want, right down to where they set their coffee cup. “We always tried to develop by coming up with a distinct impression of the type of consumer, targeting the product to them,”says former Mandel associate Blair Williams, now president of Wired Properties.

Mandel credits Jack Shepherd, a Milwaukee architect, for teaching him the nuances of “inside-out” development – analyzing how someone lives and tailoring the dwelling unit to them.
“I wasn’t as concerned with the exterior of the buildings as I was how they lived from the inside out,” Mandel says.
Before East Pointe, Milwaukee real estate development was mostly suburban in character, says
former city planning director Peter Park. At the time, then-Mayor John Norquist pushed the idea
of structures with a more urban quality. Although later projects would be more urban, East
Pointe in many ways realized Norquist’s vision, shunning superblocks and using row house
construction, harp lights and courtyards that promoted “passive policing” by residents.

“It was a complete package – it had style, it brought presence and brought tax value,” says
Rocky Marcoux, commissioner for the Milwaukee Department of City Development. “It knitted
back the urban fabric. Before that, it was this huge scar on the east side of Downtown. Barry
had a lot of vision.”
East Pointe would go on to be recognized for excellence by the international Urban Land
Institute. It also helped change the perception among developers and city residents about
Downtown, says Norquist, now president and CEO of the Congress for the New Urbanism in
Chicago. “Barry understood pretty early that there would be a market in the Downtown, so I give
him credit.”
East Pointe was catalytic for the surrounding area, contributing to the Brady Street revitalization.
Other developers followed Mandel’s lead, with new condominium construction and
redevelopment of older buildings in the Downtown, Third Ward and East Side areas.

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