Last Wednesday, a packed hearing room debated the true price tag of the Milwaukee County-owned O’Donnell Park, built on the site of the city’s first park, Juneau Park, overlooking the Lake Michigan shoreline.
The special meeting of two county board committees debated the proposed sale of the site to Northwestern Mutual Life (NML), which is undergoing a $450 million redevelopment of its nearby office campus.
The site consists of a rooftop park and a 1,300-space parking structure, which needs repairs and only has 20 years remaining on its life span, according to the county.
NML wants to buy the O’Donnell site for just under $13 million, which it would revitalize and preserve for the public’s use. NML has promised to keep and improve the parking structure, as well as the parkland on its rooftop, but the promise to keep the green space is not included in its proposed term sheet with the county.
NML approached the county with the deal and the county decided to go with it instead of letting it out for a competitive bid, said Teig Whaley-Smith, the county’s director of economic and community development. Unfortunately, Milwaukee County Executive Abele seems to like to do private behind-closed-doors deals when he sells off our choice county lands.
The sale of O’Donnell Park had been in the works behind closed doors for a while.
Last year, Abele had deducted $1 million in parking revenue from his proposed budget, saying that O’Donnell Park would be sold to an unnamed buyer in the final quarter of 2014. No deal had yet been struck, in public, at least. The board deleted that provision from the budget, which Abele then vetoed. Supervisors overrode that veto 18-0.
County Would Net $5 Million
This year, NML’s offer is on the table for public vetting, although the county board can only vote yes or no on any deal that Abele strikes, thanks to a Republican bill in the state Legislature that he backed, which stripped the county board of much of its oversight power.
In 2013, the Nicholson Group appraised the site at $14 million. After giving NML a $1.3 million credit for needed repairs, and paying off outstanding debt, the county would net $5 million from the sale to NML under its current terms.
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Scott Manske, the county’s independent comptroller, said his analysis showed that O’Donnell Park’s sale to NML was the most fiscally advantageous for the county. The county isn’t considering keeping the site and leasing it to NML because it says a lease would violate legal restrictions on the land.
If the county were to keep it and rebuild the parking structure in 20 years, the county would be on the hook for $13.3 million, Manske said. Baked into that figure is the county’s assumption that it would have to spend $57-$76 million to demolish and rebuild the structure in 2035. If the county were to keep the property, demolish the parking structure in 20 years and turn the site into parkland, the county would net $2.5 million, Manske said, half of what it would generate from the sale to NML.
‘This Is a Bad Deal’
But do those numbers reflect the true value of O’Donnell Park?
Parks advocates who testified last week questioned the county’s numbers, and even its ability to sell the land to NML.
Charles Kamps, an attorney speaking for the nonprofit advocacy group Preserve Our Parks, questioned the county’s fiscal and legal assumptions.
“This is a bad deal and we have a better alternative,” Kamps said. “It’s a bad deal because it’s wrong legally, it’s wrong morally and it’s wrong economically.”
Kamps explained that the original Juneau Park had been built on filled-in lakebed, which means that it’s protected by the state constitution’s Public Trust Doctrine and cannot be sold to a private entity and must be used for the public’s use and enjoyment. Last year, the Republican-dominated state Legislature passed an Abele-backed bill that redrew the lakeshore boundaries in the area to clear up any legal restrictions that would hinder the development of the high rise Couture and O’Donnell Park.
The Public Trust Doctrine “is based on our constitution,” Kamps said. “And it cannot be repealed by the fictitious Shoreline Act, which the county executive’s team sold to the Legislature.”
The site currently has deed restrictions that require it to be a park. The city could lift them in the future, Kamps said, which would allow NML to commercially develop it without any parkland.
Kamps held up the two-page term sheet, saying, “There’s nothing in here about maintaining this as a public park. Not for five years, not for ten years. How could this happen?”
Kamps also questioned the county’s $14 million appraisal, saying that it didn’t include the full value of the land, situated on prime real estate among city landmarks with an unparalleled view of Lake Michigan.
“They only appraised the parking structure as if it existed in outer space,” Kamps said.
He said a more accurate appraisal of the full footprint of the parcel is closer to $40.6 million, plus a stream of $12 million in income from parking.
Kamps contended that the parking structure has a shelf life of more than 40 years, since MacArthur Square and M&I bank’s parking structures are already 49 and 45 years old and aren’t scheduled for redevelopment.
“I’m not going through this so you can jack up the price,” Kamps told the supervisors. “You shouldn’t sell it for any price.”
