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CRE Guide: Community Spotlight - Shorewood

10/16/2012 - The Business Journal by Kathy Bergstrom, Special to The Business Journal

Shorewood village president Guy Johnson compares the north shore community’s redevelopment strategy to filling in the spaces of a gap-toothed smile.
In a built-out and landlocked community such as Shorewood, the gaps are surface parking lots, underutilized buildings and other
areas. A master plan developed in 2006 guides those redevelopment efforts. Johnson said Shorewood also owes some of its success in redevelopment to an active Community Development Authority, the village manager and efforts like a facade improvement grant program.
“In very tough financial times, we’ve been able to get a lot of good development action going in Shorewood,” Johnson said.

The two major projects under construction in Shorewood are the LightHorse 4041, a mixed-use project in the 4000 block of North Oakland Avenue, and Ravenna, a mixed-use building in the 4500 block of North Oakland Avenue.
LightHorse 4041 is being developed by Mandel Group and RE Enterprises LLC. The project includes 18,000 square feet of retail space for Walgreens, which will relocate its existing store to the new building, 84 apartments and above-ground and underground parking. Walgreens is expected to relocate in the spring, and project completion is expected later in 2013.

Ravenna, developed by WiRED Properties, will have 22 apartments and 7,500 square feet of retail space and is expected to be complete this fall. WiRED previously developed The Cornerstone, a mixed-use project also in the 4500 block of North Oakland
Avenue.

The village’s master plan identifies redevelopment opportunities, which include the site that will be vacated by Walgreens and vacant land at East Capitol Drive near the Milwaukee River that once was slated to be a senior apartment development by Sunrise Senior Living Inc.

Wangard Properties acquired a portion of the Capitol Drive site earlier this year, and Pathway Senior Living of Des Plaines, Ill.,had proposed building a senior living complex there, but has since withdrawn that plan.

Johnson, who has been village president since 2006, discussed those redevelopment sites and answered questions from The Business Journal about commercial development.

Q: Shorewood has two major projects under construction now — Ravenna and LightHorse 4041. What impact do
you think the developments will have on Shorewood?

A: “Certainly just like The Cornerstone, it contributes to a more robust retail area for the residents and other consumers that
come into the area. The LightHorse is very important because it’s in a core area at the intersection of Oakland (Avenue) and Capitol (Drive). Between the two units, it’s going to be more than 100 living units. It’s attractive to families that may have children because we do have children who live in the Cornerstone too, and then it’s also attractive for Shorewood residents who
want to move out of their homes and make their homes available to people who have children. That’s always one of our big goals, trying to get more families and school-age children. Between the two units, they’re going to add about $21 million of property tax base. It creates a lot of buzz, helping the vibrancy of the community itself. It’s a good draw for residential property buyers and other real estate development that might take place in the village too.”

Q: Wangard Partners bought the former Sunrise site on Capitol Drive earlier this year, but a proposal for a senior
housing project there has been withdrawn. What are the challenges for the site and what do you think will be a
good use? Are any proposals forthcoming?

A: “Like all projects, the biggest challenge is availability of capital. Originally we thought it would be a good site for condos, but that’s dried up. Banks aren’t lending for condo development now, and as far as what’s going on, I think what I can say now is
interest continues. We’re continuing to respond to developer inquiries. We want to make sure that it fits in with what we would like to see there, but there’s nothing ‘discussable’ at this point. You have a little bit of remoteness, to mitigate that though you’ve got the Milwaukee River and for the people who are bikers and walkers, you’ve got the Oak Leaf trail right there too. Those are two wonderful assets that we have in the village.”

Q: Walgreens will move out of its store when to the LightHorse 4041 development. What would you like to see happen with the old site?

A: “That site is certainly a targeted opportunity site, among other possible redevelopment sites that we have in the community.

That is probably one of the highest priority things that we’re looking at right now, but we’re just not ready to talk about it yet.”

Q: What challenges do you have attracting commercial development and tax base to your community?

A: “The biggest challenge is we’re fully built out. So anything that we do is infill and infill projects require high land costs, higher than normal construction costs and it’s difficult to do. The whole act of making a deal is difficult because of some of the
complexities of ownership. So working out any possible financial incentives, tax incentives is very complicated.

Where the LightHorse is going, both of those parking lots were owned by (Dan) Katz, and the Balistreris, who originally owned Sendik’s,had a long-term lease on the parking, and then they subleased it to the Nehrings, who bought Sendik’s. So just getting through those complexities was very tricky. We had a lot of folks with their fingers in the pie there.

Another example is at The Cornerstone, (with) part of the property being in Whitefish Bay, it took a lot work between Shorewood and Whitefish Bay to
figure out how to make that deal.”

Q: When a new business considers moving to your community, what are the selling points you pitch?

A: “There are other communities that might do it, but I don’t think it’s that common to have the façade improvement program to
the degree that we do it and the low-cost business loans. We offer a well-organized commercial neighborhood, so you’ve got new businesses sharing customers with businesses that have been serving the community for a long time. We can point out that we’ve got a lot of long-established businesses, so that makes people feel safer coming here, that they’re going to succeed. We
offer a nice collection of unique historic buildings so you can set up many different types of specialty retail shops or restaurants
and then we do have the infill new construction that we’re doing.

“Being in an older community, the rental prices are pretty fair. So in general, we don’t have high rental rates for businesses looking to come into Shorewood. All of our market studies have shown that the Shorewood population and the surrounding
community does like to shop local. Shorewood is the most densely populated municipality in the state of Wisconsin and that gives an advantage in walkability – biking to stops, walking to shops. That’s done a lot in this community.”

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