March 19. 2012 4:00PM - Last modified: March 20. 2012 4:11PM

Walker's Point developments heat up

Real Estate

By Andrew Weiland

  
Several developments are making progress and other buildings are filling up in the Walker's Point neighborhood, located south of downtown Milwaukee and the Historic Third Ward.

The neighborhood is at the center of the region's efforts to become a water technology business hub. Three major projects related to that effort are in the works in Walker's Point. Meanwhile once-struggling major office and residential developments in the neighborhood are on the rebound and a rebuilt street is providing an attractive Main Street for the neighborhood.


Water a development catalyst


An investors group recently closed on its purchase of a seven-story, 98,000-square-foot building at 223 W. Pittsburgh Ave. The building will become the home of the Milwaukee Water Council and part of the University of Wisconsin-Milwaukee's School of Freshwater Sciences. The building will also be used by water technology related businesses to do collaborative research work with UWM students and faculty. The idea is to create a synergy between UWM researchers, established businesses and start-up firms to help them share ideas and launch business ventures.

Several tenants have committed to occupy space in the building including Badger Meter and A.O. Smith, which will each occupy 2,500 square feet on the first floor, and Veolia, which will occupy 3,500 square feet, said Dean Amhaus, executive director of the Milwaukee Water Council.

The Water Council and UWM will each occupy an entire 12,000-square-foot floor in the building. The Water Council will occupy about 3,000 square feet of space and will sublease the rest of its space to smaller firms seeking short-term leases, Amhaus said.

The Water Council is working to attract additional tenants to the building and is still raising funds for the $20 million project. Fund-raising is expected to be complete in the next two months, Amhaus said. The renovation work on the building is expected to begin in June.

"We're moving forward," Amhaus said.

The water technology research and business accelerator building, which is still seeking ideas for a formal name, is expected to provide a catalyst for efforts to develop the adjacent Reed Street Yards, a vacant 17-acre site located between the Iron Horse Hotel and the Harley-Davidson Museum.

Peter Moede, one of the owners of the nearby Tannery office complex, and Fox Point-based General Capital Group LLP, plan to create a water technology business park on the Reed Street Yards site. City officials approved about $6 million in tax incremental financing (TIF) for the project and are working on plans for infrastructure installation, which will include streets, sewer pipes and stormwater management. Work on the infrastructure for the Reed Street Yards is expected to begin by the end of the year and be complete by next summer.

Once the infrastructure is in place, Moede and General Capital can move forward with plans to attract tenants and put up buildings in the Reed Street Yards. The development eventually could have 5-10 buildings with up to 600,000-700,000 square feet of space. Complete development of the site would likely require construction of a parking structure.

The other major water-related project in Walker's Point will be built in the southern portion of the neighborhood, at the east end of Greenfield Avenue. That's where UWM will build a 100,000-square-foot addition to its School of Freshwater Sciences headquarters. Construction is expected to begin this year and be complete next year. Research at the facility will focus more on freshwater environmental issues, while research at the Pittsburgh Avenue building will focus more on commercial applications for freshwater technologies.


On the rebound


Two large developments in Walker's Point that had significant problems a few years ago are showing impressive signs of a turnaround.

Occupancy at The Tannery, an office complex located west of South 6th Street along Virginia Avenue, has improved significantly since Aurora Health Care moved its headquarters there in late 2010.

Formerly a Pfister & Vogel tannery, Moede redeveloped the buildings into an office complex during the 1990s. But several tenants left the complex during the great recession and its occupancy rate plunged. To maintain control of the complex when the mortgage on the property came due in 2010, Moede had to bring in additional investors and reduce his ownership stake.

Aurora Health Care's headquarters filled the 72,000-square-foot Bottling House building at The Tannery, which had been vacated by American General Life Cos., a subsidiary of American International Group Inc. (AIG).

Several other tenants have signed leases at The Tannery since then, including: M.E. Dey, Bridge Healthcare, Rising Medical, U.S. Billing, Wisconsin Family Assistance Center for Education, Training and Support Inc., Hatch Staffing, ISM and Environmental Resources Management and Core Creative Inc.

Core Creative is the latest firm to sign a lease at The Tannery. The company will move from the Third Ward to occupy the 9,680-square-foot top floor of The Tannery's Atlas Building.

The Atlas Building has absorbed about 26,800 square feet of space in the last year and now has about 11,572 square feet of vacant space, according to Xceligent data. The 122,000-square-foot Timbers Building at The Tannery is about half full and the 50,856-square-foot Trade Center building has about 11,500 square feet of available space, according to Xceligent.

Also, Juto, a small-plate Asian fusion restaurant, last year occupied the former Il Mito space at 605 W. Virginia St. The building is considered part of The Tannery.

"We've put a number of new tenants in the (Tannery)," said Ned Purtell, principal with RFP Commercial, which handles leasing for The Tannery. "I think (getting) Aurora was a key. Any time you can get a 70,000-square-foot corporate headquarters it kind of reestablishes it as a good location to be in."

The other development in Walker's Point that has made an impressive turnaround is The Point on the River, a 147-unit condominium building along the Milwaukee River at 106 W. Seeboth St. Originally known as First Place on the River, it went into receivership when the original developer failed to complete the project. Mandel Group was hired by the receiver to complete the project for the banks. To date 140 of the 147 condos in the building have been sold, said Mandel Group chief operating officer Robert Monnat.

"We expect to be completely sold out by the middle of the year," he said.

Numerous residents in The Point on the River have complained about a deteriorating 136-year-old building next door. But Karl Kopp, the owner of the downtown restaurant Elsa's on the Park, is working on a restaurant project for the building, according to a real estate industry source.

Meanwhile, apartments are filling up at another Walker's Point development. Lighthouse Development Company LLC's redevelopment of the former Transpak Corp. complex at Pittsburgh Avenue and Barclay Street created a pair of apartment buildings. In addition, Next Act Theater moved into one of the former Transpak buildings in the complex, now called South Water Works.

And in yet another Walker's Point apartment project, developer Tim Dixon built the 73-unit National Lofts north of East National Avenue and east of South 1st Street. The project was funded with federal section 42 tax credits, so the units are rented at below market rates for residents whose household income does not exceed 60 percent of the area's median income.


Rebuilt street


In 2010, the city rebuilt South Second Street, between St. Paul Avenue and National Avenue in Walker's Point. The street was badly in need of repairs, but the project also narrowed the street from four lanes to two and added bicycle lanes, creating a more pedestrian-oriented street with more landscaping and new lights.

Milwaukee Fix LLC, led by developer Juli Kaufmann, is building the first new building that fits in with the new pedestrian-oriented design of South Second Street. The four-story, 30,000-square-foot Clock Shadow building at the northeast corner of South Second Street features numerous environmentally-friendly "green" features. Construction of the building is essentially complete and tenants are in the process of moving in to the building, which is 100 percent lease. The tenants will include: Clock Shadow Creamery, Purple Door Ice Cream, Core/El Centro and Aurora Health Care's Walker's Point Community Center and The Healing Center.

Walker's Point is appealing for a number of reasons, Kaufmann said, including its diversity, development opportunities, and its proximity to downtown and the Third Ward.

"It's just a very eclectic and interesting neighborhood," she said.

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