Fiserv Forum. The Hop. Grand Avenue Mall. Downtown Milwaukee has seen its fair share of city-supported tax deals and subsidies over the last few years, while the North Side often remains strapped for cash. However, many city leaders are hoping this changes soon.
The Milwaukee Common Council approved a $4 million loan Tuesday to start getting plans for a North Side development project off the ground. The $32 million project, titled “One MKE Plaza,” was announced by Milwaukee Developer Kalan Haywood of the Milwaukee-based Haywood Group last March. It includes a hotel, working space, restaurant and conference center on the intersection of W. Fond Du Lac and W. North Ave.
The property, located at 2100 W. North Ave., was a former Sears store but has been vacant for several years. The “Ikon Hotel,” which would house 80 hotel rooms, could be built in time for the 2020 Democratic National Convention. Alderman Russell W. Stamper has remained a vocal supporter of the project since the beginning.
“We are taking a risk for an investment that will change the landscape and transform the entire central city and have a domino effect, an economic boom domino effect, for Downtown and the rest of the city,” said Stamper Tuesday.
The loan will be used by the developer to purchase the complex and demolish the interior. The three-story building, which was built in 1928, is just over 200,000 square feet in size. The project would be located just feet from the Fondy Food Center and a little over a mile from the newly developed Sherman Phoenix.
However, according to Milwaukee’s Comptroller, the loan would put the city at "significant risk.” According to a report from Comptroller Martin Matson, “The Comptroller's office has not received a net operating income projection, therefore it is indeterminable whether the Developer will have the ability to repay the loan.” The loan is also an interest-only loan.
It is because of this that three aldermen pushed for the resolution to be moved back to committee Tuesday, essentially asking for more information about the project before the City invests in it.
“I hope he [Haywood] is very successful in this endeavor,” said Ald. Michael Murphy Tuesday. “But in this case, I can’t even make the determination of level of risk because the developer hasn't provided the information.”
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In response, Stamper said he has heard from “multiple sources” that the developer is working on his financing plans. He also praised Haywood’s efforts to work with the city, adding that he has “never missed a meeting.” “We finally have someone who can get this done. He needs a little assistance, and we, as a city, should provide that assistance,” said Stamper.
Aldermen Weigh In
Many aldermen supported the plans for the project.
“We’re not doing this deal based on, shall we say, strictly financial considerations,” said Alderman Robert Bauman, “but on social justice considerations.”
Alderman Cavalier Johnson agreed. “Yeah, it’s risky, but this is our opportunity and this is our chance to elevate the property and elevate the folks who live there out of poverty by making a substantial investment there,” said Johnson.
Alderwomen Chantia Lewis and Milele A. Coggs also said this is a good opportunity to spur economic growth in the inner city. “This moment is one that we can look back to and point to and say this is one of the developments that we as a city partnered with to help spur economic developments in the neighborhood,” Lewis said. “We aren't talking about Downtown, we are talking about neighborhoods here."
“I recognize that this project has the potential to not just be a great hotel, but also a center that helps to develop entrepreneurs,” Coggs added.
Construction for the project could begin as soon as this spring. The Haywood Group has also developed and re-developed the Germania Building at 135 W. Wells St., Pete’s Fruit Market on North Ave., Cermak Fresh Market in West Milwaukee and many other buildings across the city.
