The Milwaukee Common Council on Tuesday approved a 10-year lease extension to Milwaukee World Festival Inc. for use of the 75-acre Henry Maier Festival Park, the home of Summerfest and several ethnic festivals, on Milwaukee’s lakefront through 2030.

To take affect, the lease extension agreement still needs to be approved by Mayor Tom Barrett.

The lease extension allows Milwaukee World Festival to move forward with plans to improve the southern end of the Summerfest grounds. Milwaukee World Festival is currently evaluating design and architectural options for the future redevelopment project.

The project will completely rebuild the area of the Summerfest grounds between the Harley-Davidson stage and the Marcus Amphitheater. The project will include the redevelopment of the Briggs & Stratton Big Backyard stage and the M&I Classic Rock stage area.

The specific plans and costs are yet to be determined. Milwaukee World Festival’s new lease with the city requires it to spend at least $10 million on the project, said John Boler, vice president of sales and marketing for Milwaukee World Festival. However, the actual cost of the project could exceed $20 million and will be one if the biggest, if not the very biggest, capital improvement project done to Maier Festival Park, he said.

Milwaukee World Festival needed the 10-year-lease extension so it can be certain that it will get a return on investment from the project, Boler said. The project is expected to be completed in 2015 and will be done in phases over several years.

“This 10-year lease extension cements the future operations of Summerfest on the lakefront and provides the opportunity for Milwaukee World Festival to embark on a planned capital improvement initiative to redesign and redevelop approximately 22 acres on the southern portion of the grounds,” Don Smiley, president and chief executive officer of Milwaukee World Festival, said in a news release.

Improvements done in recent years to the Miller Oasis and the Harley-Davidson stage have enhanced the need for improvements to the older facilities on the south end of the grounds.

“It is in need of an upgrade,” Boler said. “We’re going to do a complete renovation, which would mean bulldozing a good portion of the area.”

Some of the goals of the redevelopment of the south end of the grounds will include a redesigned traffic flow, new food and beverage buildings, stage improvements and an enhanced festival-goer experience with Lake Michigan, Boler said.

Over the term of the current lease, the average annual rent paid by Milwaukee World Festival to the City is $1,385,437.00, which includes periodic increases over the term, and required Milwaukee World Festival to make a $2 million capital contribution for the construction of Lakeshore State Park.

Under the lease amendment, the average annual rent and increases consistent with that of the current lease. However, to pay for the police and fire services provided by the city for Summerfest, Milwaukee World Festival will now pay a supplemental services fee of $100,000 per year with an annual increase of 3 percent from 2010 through 2020, 4 percent from 2021-25 and 5 percent from 2026-30.

Ald. Michael Murphy led the charge for the police and fire services fee.

“After reviewing the lease and determining the significant cost of providing police and fire services, I felt strongly that Milwaukee World Festival could pay more for those costs,” Murphy said. “With the current economic conditions, I’m pleased the public safety fee is included in this lease, and the city will receive more than $3.3 million from the fee through 2030.”

The negotiations for the new lease are a dramatic improvement from the acrimonious battle that played out during previous Summerfest lease negotiations years ago between former Milwaukee World Festival leader Bo Black and former Milwaukee Mayor John Norquist.

“Summerfest is a valued community asset,” said Common Council president Willie Hines.

“We are appreciative of the time, consideration and approach Mayor Tom Barrett, the Common Council, the Harbor Commission and City Attorney, Grant Langley and his staff, took in negotiating and granting this extension,” Smiley said. “The parties handled the process professionally and fairly and the outcome delivered value to both parties and the necessary assurances to extend the relationship.”

Home values have held up better in the Milwaukee area than most major metro areas in the U.S., according to New York-based Radar Logic Inc.’s monthly housing market report.

Radar Logic says homes in the Milwaukee metro area sold for $113.28 per square foot in October, down 1.4 percent compared to October of 2008. However, Milwaukee was tied with Columbus, Ohio, for having the lowest price decline of the 25 metro areas tracked by Radar Logic. Only Denver was the only metro area that had a home sale price increase (5.2 percent).

The metro areas with the biggest home sale price declines over the last year are: Las Vegas, down 29.6 percent; Detroit, down 27.1 percent; Miami, down 21.9 percent; Chicago, down 20.2 percent; and Phoenix, down 19.9 percent.

The one-year home price decline for the composite index of the 25 metro areas tracked by Radar Logic is 7.5 percent.

Milwaukee had the lowest 2-year price decline, of 0.2 percent, and the second highest 5-year price increase, 2.0 percent, according to Radar Logic.

Quinn Eddins, director of research for Radar Logic, and statistician Matthew Zogby say the U.S. housing market is not going to collapse again in 2010, as some predict.

“While we acknowledge that serious troubles remain in the nation’s housing markets, we think predictions of a second collapse of the housing market are exaggerated,” Eddins and Zogby said in the Radar Logic report. “Our view is that recent trends point to continued stability in the housing market, and if efforts to ease foreclosures can and do succeed, there could be significant recovery in housing values in spring 2010. Housing demand is strong, as indicated by recent increases in sales activity. On the supply side, we are encouraged by falling inventories of new and existing homes as well as declines in new home permits and starts. The principal threat to the housing market is the looming inventory of distressed homes. Delinquencies have reached their highest levels in decades. Foreclosures and bank repossessions are also elevated from historical levels, but they have not kept pace with rising delinquencies. As a result, there is a glut of seriously delinquent mortgages awaiting foreclosure and a glut of foreclosed homes awaiting auction and/or repossession. We think it is likely that distressed properties will enter the housing market at a controlled rate that can be absorbed by the existing housing demand without drastically reducing prices.”

A ribbon cutting ceremony was held last week to celebrate the opening of the 160-room Aloft hotel at 1230 N. Old World Third St. in downtown Milwaukee. A grand opening celebration is planned for mid-January.

The hotel was developed by Milwaukee River Hotel LLC and is being managed by Dallas-based Aimbridge Hospitality.

The hotel will have 4,600 square feet of meeting and banquet space, which will be completed by March. The hotel also has a fitness center, indoor pool and a bar called Wxyz.

Aloft is a hotel brand of White Plains, N.Y.-based Starwood Hotels & Resorts Worldwide Inc.

The Aloft is the first new hotel to be built in downtown Milwaukee is several years.

“This is an exciting time for Milwaukee as the hotel brings a new dimension in hospitality to the city,” said Dave Johnson, president and chief executive officer of Aimbridge Hospitality. “Not only does this property represent the first new hotel development in the market since 2001, but it brings with it the much-needed concept of affordable, chic accommodations for the contemporary business traveler and vacationer.”

The hotel is located along the Milwaukee River and the project includes a new riverwalk segment. It is within a block of the Manpower Inc. corporate headquarters and the Bradley Center.

The Best Place Vintage Gift Shop opened Saturday in the former Pabst gift shop in The Brewery complex at 901 W. Juneau Ave. in downtown Milwaukee.

The gift shop is part of the Best Place complex in the former Pabst brewery that is owned by Jim Haertel and other investors. The Best Place complex includes the former Pabst gift shop, Blue Ribbon Hall, visitor’s center and corporate offices. Best Place is named after the original founder of the brewery, Jacob Best, Sr.

The rest of the former Pabst brewery is being redeveloped by Zilber Ltd. founder Joseph Zilber into a mixed-use urban neighborhood.

Most of the items sold at the new gift shop are items recovered from the Pabst brewery.

“Over 80 percent of our merchandise was recovered from the former Pabst Brewery, largely left behind when Pabst closed in December of 1996,” Haertel said. “For those items purchased, we provide a special Pabst card designating, ‘Authentic Item-Recovered from the Historic Pabst Brewery.’”

Examples of the merchandise available, while they last, include beer mirrors, Pabst patches, ponchos, beer glasses, cancelled stock certificates, coasters, including Schlitz, Blatz and Hamm’s brands and more. Haertel also is displaying items from his own collection.

“We also have 20 percent devoted to new items to round out our selection,” said   Suzanne Ehlke, director of sales and marketing for the gift shop. “T-shirts and hats. But for the holidays, we have beer-themed ornaments, fancy steins and gift cards, too.”

Haertel and Paul Bertling originally obtained the accepted offer to purchase the former Pabst Brewery on Sept. 11, 2001.

“We acquired a lot of stuff, we are keeping one of everything and selling what’s left,” Haertel said.

Plans to have a Hofbrauhaus beer hall and restaurant occupy Blue Ribbon Hall have fallen through. However, Haertel is hosting group events and tours at the facility and plans to open a pub in the former visitor’s center area. Eventually Blue Ribbon Hall may be used for a restaurant, he said.

The city of Milwaukee’s Redevelopment Authority announced that it has allocated $12 million of federal tax benefits to seven companies that renovated or built new facilities in Milwaukee in 2009.

The companies received allocations of the federal renewal community commercial revitalization deduction, which provides an accelerated depreciation deduction period for commercial real property, either new construction or substantial rehabilitation. The deduction is one of several federal tax incentives available to companies located within Milwaukee’s renewal community boundary, comprising about 80 central city census tracts.

Together, the seven firms receiving the tax benefit allocations invested more than $43 million in their projects, retaining 185 jobs. The firms expect to create 137 positions during the next three years.

"The seven firms that received commercial revitalization deduction allocations this year are finding success in their central city neighborhoods," said Mayor Tom Barrett. "We are pleased to support their decisions to grow their businesses in the community and hire local workers."

The companies that are receiving the tax benefits are:

About 375 people attended the seventh annual BizTimes Commercial Real Estate & Development Conference, southeastern Wisconsin’s premier networking and information event for the industry, which was held in November at Potawatomi Bingo Casino in Milwaukee. The theme for this year’s conference was, “What Now? Strategies for Revival.”

The event featured a panel of national commercial real estate and economics experts. They included: Robert Bach, senior vice president and chief economist of Grubb & Ellis Co.; Rhyne Brown, executive vice president of client development at NAI Global; Ross Moore, executive vice president and director of market and economic research at Colliers International Property Consultants Inc.; Maria Sicola, executive managing director and head of research for the Americas at Cushman & Wakefield Inc. and Jack Durburg, executive managing director of the Chicago region for CB Richard Ellis.

For those who could not attend the event, BizTimes Real Estate Weekly will feature a video segment from the event for 10 weeks.

In this week’s video segment, the fourth of 10, the panel discusses whether or not they are concerned about inflation in the U.S. economy.

View this week’s video by clicking here.

View the third week’s video, when the panel talks about their outlook for the U.S. job market and how it will impact the commercial real estate market, by clicking here.

View the second week’s video, when the panel talks about what shape they expect the economic recovery to take, by clicking here.

View the first week’s video, when the panel talks about the greatest risk to sustained GDP growth for the U.S. economy, by clicking here.

Chemical company plans to purchase Pleasant Prairie facility

North Chicago, Ill.-based EMCO Chemical Distributors Inc. has a contract to purchase a 259,580-square-foot building at 8601 95th St. in Pleasant Prairie’s LakeView Corporate Park, from Hexion Specialty Chemicals, which ceased operations there earlier this year.

The purchase is pending EMCO’s due diligence procedures, which includes an environmental study, EMCO president Edward Polen said. The company will know in January if it will complete the purchase, he said.

“We think everything is going to be fine,” Polen said.

The company wants to purchase the building because it is located along a rail line. The company ships materials in via rail and ships them out on truck, Polen said. It is difficult to find facilities with easy access to rail lines, he said.

EMCO is not sure exactly what operations it will have in the Pleasant Prairie facility, Polen said. Pleasant Prairie village officials this week approved a conditional use permit for EMCO. Village officials said that EMCO plans to have 80 to 125 full-time employees at the facility for packaging and distribution operations.

Some of EMCO’s larger customers include Rust-Oleun, Exxon Mobile, Sherwin-Williams, Benjamin Moore & Co., PPG Industries and Valspar.

Some of EMCO’s operations at its headquarters in North Chicago will likely be moved to the Pleasant Prairie facility, but the company has yet to determine exactly what will be moved, Polen said.

The company’s waste transfer and storage facility at 9114 58th Place, Suite 900, Kenosha, will not be affected by the addition of the Pleasant Prairie facility, Polen said.

City completes acquisition of large portion of former Tower Automotive property

The city of Milwaukee Redevelopment Authority recently completed its purchase of 84 acres at the former Tower Automotive site in Milwaukee’s central city for $3.5 million from Milwaukee Industrial Trade Center Inc.

The property is roughly bounded by West Capitol Drive, West Keefe Avenue, North 35th Street and North 27th Street.

City officials plan to redevelop the property and attract businesses to the site, similar to the city’s efforts to redevelop the west end of the Menomonee Valley. The Tower Automotive redevelopment project will cost an estimated $35.4 million. City officials are calling the project “Century City.”

The city plans to demolish some of the buildings on the site, install infrastructure and remove contamination from the site. City officials hope to attract a mix of uses to the site, primarily with a modern business park complemented by residential and retail space.

"Our goal is to design the Century City business park as an economic anchor in the 30th Street Industrial Corridor, returning jobs and opportunity to Milwaukee's central city,” Mayor Tom Barrett said. “We are eager to get to work."

The Century City property could be available for businesses to move in by 2013, Department of City Development Commissioner Richard “Rocky” Marcoux said.

“Job creation and blight elimination are the bottom lines for this project,” Marcoux said.  “This site was the source of quality jobs for nearby residents for many years, and it’s our goal to replace between 700 and 1000 of those jobs at this property. We believe Century City will be a positive focal point for the community and a source of pride for the surrounding neighborhoods.”

The Century city project is the second redevelopment project done by the city at the former Tower Automotive site. In 2006 the Department of Public Works moved to a new facility on 24 acres at the site. The DPW moved to make way for the Harley-Davidson Museum project in the Menomonee Valley.

County sells land for airport hotel project

The Milwaukee County Board recently agreed to sell a 27,317-square-foot parcel of land at 5904 S. Howell Ave., Milwaukee, to Madison-based Raymond Management Co. for $213,000.

Raymond wanted to add the property to the adjacent former St. Stephens Church site, which it purchased from the church and where it is building a Hilton Garden Inn hotel.

Construction began recently on the three-story, 85,600-square-foot hotel building. It will have 143 rooms, 3,800 square feet of meeting space, a full-service restaurant, a full-service bar area, a business center, a fitness center and an indoor pool and spa.

The project is expected to be complete by the fall of 2010.

The area around the airport has attracted several new hotels this year and several existing hotels have done remodeling, including some that have also been rebranded. Three new hotels opened near the airport this year: an 82-room Sleep Inn & Suites at 4600 S. 6th St., a 100-room Candlewood Suites at 6440 S. 13th St. and a 120-room Fairfield Inn & Suites at 6460 S. 13th St.