City officials were preparing legislation for a $2 million tax incremental financing (TIF) proposal for a hotel, retail and condominium development planned by Dallas-based Gatehouse Capital Corp. for a vacant block in Milwaukee's Park East corridor. The TIF proposal was expected to be introduced and begin moving through the approval process this month, said Gatehouse president and chief executive officer Marty Collins.

However, Collins says Gatehouse is reconsidering its TIF proposal and will come up with a new proposal for the city.

"We're re-thinking the tact we want to take with the city on the TIF," Collins told Small Business Times. "I just want to sit for a month or so and work on an alternative proposal. We're formulating it right now."

The 22-story development would have a 175-room Palomar boutique hotel and 65 residential condominiums. Collins declined to say why Gatehouse is reworking its TIF proposal.

Department of City Development Commissioner Richard "Rocky" Marcoux also declined to discuss the TIF negotiations for the project.

"We’re in active discussions with the development team on this project and as such we’re not at liberty to discuss details at this time," he said.

The project has been targeted by labor and health care reform advocacy groups, who say they are concerned that workers in the Palomar hotel will not have adequate health care benefits.

Gatehouse has said that the construction workers to build the development will be union laborers and workers in the hotel will be paid prevailing wages with benefits.

"We're not anti-union at all," Collins said.

However, Antony Dugdale, national co-director of hotel workers union Unite Here, said his organization is concerned that the hotel workers will end up receiving health insurance that is subsidized by the state, providing a hidden taxpayer subsidy for the development. Unite Here represents workers at the Pfister, Hyatt and Hilton hotels downtown.

"We're concerned because the company isn't willing to make any clear commitments one way or another (about health insurance benefits to the hotel workers)," Dugdale said. "What often happens in the industry, the employer will provide health care that costs an exorbitant amount, but pays the workers wages that are so low they qualify for state subsidized health care, and they go that route rather than have their whole paycheck go for health insurance."

Although the property where the Palomar development would be built, located northwest of Old World Third Street and Juneau Avenue, has been vacant for years, Robert Kraig, program director for Citizen Action of Wisconsin, called it "highly valuable land" and said the city should not subsidize a development that will produce low-wage jobs without adequate benefits. Citizen Action of Wisconsin is an advocacy group pushing for health care reform in the state.

"For the city to use its hard-earned economic development money for a project with low-paying jobs that don't provide health benefits is counter-productive," Kraig said.

The Pleasant Prairie Village Board this week approved a development agreement with Waukegan, Ill.-based Uline Inc., which is planning to build a new corporate headquarters southwest of Interstate 94 and County Highway Q in the Kenosha County village just north of the state line. Uline is a distributor of shipping, industrial, and packing materials.

The agreement provides a framework for installation of public infrastructure for the development. Site work has already begun for the project.

The facility will consist of 218,000 square feet of office space and 1 million square feet of distribution space. Construction of the corporate offices is expected to be complete during the spring of 2010. Initially, about 650 employees are expected to work in the Uline headquarters offices. Construction for the distribution space is expected to be complete by the end of 2009. Initially 200 employees will work at the distribution center. Later, in a second phase of the project, Uline plans to add another 200,000 square feet of office space and 800,000 square feet of distribution space. Completion of all phases for the Uline campus is expected to be complete in 2015, and about 1,000 employees are expected to be working on the campus at that time.

As part of the development agreement with the village, Uline has agreed not to build another corporate headquarters until the Pleasant Prairie campus is complete. The company has also agreed not to build any additional distribution space with a 50-mile radius until their distribution space in Pleasant Prairie is complete.

"This will have a significant impact on our local and regional economy," said Village President John Steinbrink Sr. "Not only will Uline bring new, high quality, employment opportunities to southeastern Wisconsin, but their presence will provide another layer of economic diversity and stability in our area."

In a separate agreement, the village has agreed to reimburse the state for a $1 million Transportation Economic Assistance (TEA) grant if the Uline campus does not create 500 jobs within three years and retain those jobs for an additional four years. Uline has agreed to reimburse the village for the grant if it does not produce the jobs on that timeline. The $1 million TEA grant will be used for road improvements for the Uline campus.

Milwaukee Mayor Tom Barrett announced that he will kick off the new Milwaukee Foreclosure Partnership Initiative (MFPI), a formal effort to address the mortgage foreclosure crisis in the city, this Thursday at Convent Hill, 455 E. Ogden Ave.

Barrett started the action-oriented, public-private partnership to formalize efforts that began two years ago when Milwaukee started to see an increase in foreclosures as a result of the national mortgage crisis.

The group will be led up by chairs Kathryn Dunn of the Helen Bader Foundation and attorney Steve Chernoff with Godfrey & Kahn S.C.

Currently, there are about 1,500 bank-owned foreclosures in Milwaukee and foreclosure filings are up 56 percent this year compared with last year.

The partnership, which includes lenders, foundations and community stakeholders, is aimed at steadying Milwaukee neighborhoods most affected by the foreclosure crisis, using a three-tiered approach: prevention, intervention and stabilization.

"City resources are being taxed by the increase in foreclosures in Milwaukee," Barrett said. "The underlying instability in the neighborhoods hardest hit only makes our challenge that much greater. The work of this partnership is going to be critical in forming our solution to make these neighborhoods whole again."

The Milwaukee Common Council last week voted to establish a Special Joint Committee on Redevelopment of Abandoned and Foreclosed Homes. The committee will handle the appropriation of funds that the city will receive as a result of the federal Housing Economic Recovery Act, which provides cities funds to purchase and rehab (to then sell) homes and properties that have been abandoned or foreclosed upon.

"Milwaukee may have $15 million to $20 million in resources available very soon and having this committee in place to begin the work of planning for the funds is imperative so that we can make the most of these resources," said Ald. Robert Bauman.

The City of Milwaukee already has created a database of bank-owned properties and has mapped locations throughout the city.

City officials are working to implement an ongoing monitoring system that will track foreclosed properties and foreclosure filings in the Milwaukee County Register of Deeds office. The tracking will serve as an early warning system to alert officials to neighborhood trends and forecast where future foreclosed properties may be located.

"There will not be a one-size-fits-all approach to this," Barrett said. "We know we need to tailor our efforts neighborhood-by-neighborhood based on the severity of the problem

and the strength of the housing market in that area. The challenges before us are great, but together we can find and implement meaningful solutions that will make our neighborhoods stronger."

A groundbreaking ceremony was held Tuesday to celebrate the start of construction for a $20 million, 160,000-square-foot industrial building for Charter Wire on a 7.8-acre site in the Menomonee Valley. The company will have 115 employees in the building when construction is completed. The new facility will replace Charter Wire's current facility at 114 N. Jackson St. in the Historic Third Ward. Oconomowoc-based MSI General Corp. is the architect and general contractor for the project.

A new, three-story, 90-room Candlewood Suites hotel opened recently at 10200 74th St., Kenosha. An open house celebration for the hotel's opening will be held today.

The hotel is located just north of Highway 50 and about a mile east of I-94. The area continues to attract commercial development as sprawl from the Chicago area creeps north of the state line.

The hotel was development by Kenosha-based Bear Realty and Mills Enterprises. North Liberty, Iowa-based Kinseth Hospitality Companies manages the hotel.

Candlewood Suites is an extended-stay hotel brand of the Buckinghamshire, U.K.-based InterContinental Hotels Group. Each suite in the Kenosha hotel has a full kitchen and the hotel's amenities include a fitness center, a business center and laundry facilities.

Although construction began in May, Chicago-based HSA Commercial Real Estate will hold a groundbreaking ceremony on Sept. 23 to celebrate the start of construction for the Park 94 Business Park, located southwest of Highway 20 and County Highway V in Mt. Pleasant. HSA hired Butler-based Berghammer Construction Corp. to build a 320,000-square-foot speculative industrial building and a 125,000-square-foot speculative industrial building in the business park. Construction of the buildings is expected to be complete in December.

A recent Milwaukee Circuit Court ruling will allow Milwaukee-based Mandel Group to complete the First Place on the River development.

The 152-unit condominium development at 106 W. Seeboth St., Milwaukee, was millions of dollars in debt, the project was placed into receivership and the original developer, KeyBridge Development, was removed from the project.

"Now we can continue to move forward with the completion of the development and sale of the remaining condominiums," said Michael Polsky, the court-appointed receiver for the project.

Mandel Group will re-launch the development this fall. Mandel has retained Garrison Partners, a Chicago-based sales and marketing consultant specializing in urban housing to oversee marketing and sales preparation for the project.

"We're seeing demand at all price points and are confident that the finished product will be well-received by the market," said Garry Benson, president of Garrison Partners.

Home sales in southeastern Wisconsin dropped by 20 percent in August, compared to August of 2007, according to the latest MLS data.

Milwaukee County had 807 home sales in the month (compared to 902 in 2007), Waukesha County had 400 (compared to 565 in 2007), Ozaukee 104 (123), Washington 141 (182), Racine 153 (225), Kenosha 165 (196), Walworth 103 (154) and Sheboygan had 101 sales (compared to 130 in 2007).

Home sales in the region were also down from the 2,023 that were sold in July. The number of homes listed for sale in the eight-county area in August declined by 15 percent, from 4,427 to 3,762, compared to August of 2007. Listings have declined as the buyers' market has discourage home owners from putting their homes up for sale.

"If this supply side correction continues, we should start seeing upward price pressure later this year or in early 2009," said Mike Ruzicka, president of the Greater Milwaukee Association of Realtors. "We currently have 10.13 months of inventory, with 14,712 active residential listings in the metro area. This is even with the 10.1 months we had when the July stats were released (8/11), and up slightly from the 9.7 months we had when the June analysis was released (7/10), but it is down significantly from the 12- to 14-month levels we had going back to last fall."

Sale completed for Pabst brewery building
BC Pabst Holdings, whose principals are Matt Chmura, former Green Bay Packer Mark Chmura and Sonny Bando, recently closed on their purchase of the 14,000-square-foot former wagon room/research lab/paint shop building at the former Pabst brewery complex from Zilber Ltd. founder Joseph Zilber. The three-story, 14,000-square-foot building is adjacent to the three-story, 28,000-square-foot former research lab building that BC Pabst Holdings purchased in June and has been renovating. "

Since the buildings are connected, it was a very logical step to acquire (the 14,000-square-foot building)," BC Pabst Holdings said in a statement. "We now have 42,000 square feet of available space at this prime location. Our response from the marketplace for this location has been very positive." The buildings are located on the west side of the brewery complex, along I-43. Zilber said the redevelopment of the complex from a brewery into a mixed-use neighborhood is gaining momentum. "Our first phase involved remediation and limited demolition," Zilber said. "The second phase involved some demolition and site preparation, which led to the sale of our first four buildings and the land preparation for future development. In phase three, we are moving quickly forward to market the remaining available space and raw land. The response has been beyond our expectations and we anticipate making a number of announcements before the end of the year."

Large Watertown building sold
Montgomery Properties LLC recently purchased a 191,000-square-foot building at 426 S. Montgomery St., Watertown, from MCF I LLC. Karen Johnson and MayBritt Lian of NAI MLG Commercial represented the buyer and Pete Slezak of Colliers Barry represented the seller. The building will be repositioned from a single-tenant facility into a multi-tenant facility. The City of Watertown currently occupies 60,000 square feet of space in the building, using the space as a maintenance facility.

Racine-based construction firm BCI Group announced that it is launching a new branding image. The new brand identity involved a total redesign of the firm's logo and website (www.bcigrp.com) into a more contemporary look. "Our new image represents the employee ownership group in place since 2001," said BCI Group CEO Gregg Thompson.