The Couture Rendering by Rinka Chung Architecture
Didn’t it seem strange when, several years ago, Milwaukee County took perhaps its most valuable piece of real estate on the lakefront, across from the world-famous Calatrava, and sold it for less than 10% of its value to a developer who many real estate professionals felt lacked the resources to complete the Couture project?
Didn’t it also seem strange that Milwaukee County Executive Chris Abele personally pushed very hard to get this particular project through the county board despite many individuals questioning how this particular developer was chosen by Abele in the first place? Then, we saw Abele buy two new condos in an earlier project from that same developer.
Wasn’t it odd for Abele to use a very questionable, much less transparent process called a request for interest from developers, giving him more flexibility to select a particular developer rather than the usual request for proposals (RFP), with its public input, when this highly valuable project was initially awarded?
Isn’t it also strange that, after seven years have passed, the county executive still stands 100% behind the developer, who is trying to heavily finance this high-end project with public money and public loan guarantees and has missed numerous deadlines?
When does “questionable judgment” on the part of a public official cross over into corruption or blatant cronyism?
The Background Story
In 2012, Abele maneuvered a process that enabled him to essentially select his personal choice of a developer to build a major high-rise development on one of the most valuable pieces of real estate in Wisconsin. Now, more than seven years later, the developer has been unable to get financing for the project. The county and city have been doing backflips to try to carry this project to the finish line, but the development has failed to move to the construction stage.
For example, this choice land was the former bus facility and the county must repay $6.7 million to the Federal Transit Administration (FTA) if it didn’t sell the property at market value. The FTA helped finance the bus facility project back in 1988, which is why this provision exists. Abele sold the land to the developer for less than 10% of its value. To dance around this problem, the city came to the rescue and proposed that the developer redesign the project to include a concourse for buses and the streetcar which would satisfy the FTA requirements and avoid the $6.7 million repayment.
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To further complicate matters, if the lakefront Hop extension is not completed by December 31, 2020, and if the FTA does not extend the deadline, Milwaukee will have to repay the $14 million dollar grant from the FTA that was given to the city to finance the lake extension.
What Abele Chose Not to Do
When the county has an extremely high-value property to develop, it should have been able to find a number of capable, experienced developers who would have had the project near completion today. In addition, the county could have done this with a transparent RFP process. Instead, the county executive chose a very non-transparent process to personally select his developer of choice who has failed to even start construction seven years later. Also, the developer he chose is the same one from whom Abele would later buy new two condos. Like the Couture, this earlier project heavily depended on public loan guarantees and various other public monies like Tax Incremental Financing. These public programs are essential for developments in distressed areas but should play a minor role in high-income projects built for high-income residents.
It’s not too late to change course. Alderman Bob Donovan, who is often at odds with the Shepherd Express, was spot-on when he suggested that it is time to find a new developer. Since the project has failed to move forward, the contract it has with the county states that the county could force the developer out of the deal and buy back the land for $425,000 if it failed to begin construction by a date that has already passed. Or will Chris Abele continue to support his guy for whatever unknown reasons, which would cause the county to have to repay $6.7 million to the FTA and leave an empty hole on the lakefront to linger as an embarrassment to Milwaukee?
Unfortunately, as we welcome the 2020 DNC convention-goers to Milwaukee and to our lovely world-class lakefront, we will have a hole in the ground from an eight-year-old project.
Louis Fortis is publisher and editor-in-chief of the Shepherd Express.
