A Minnesota man and three investment partners have bought the former Milwaukee Solvay Coke & Gas Co. site on the city’s south side, where they plan to build the largest real estate development in the state’s history and change the city’s skyline.
Thomas Short and his partners, whom he declined to identify, recently purchased the long-abandoned industrial site at 311. E. Greenfield Ave.
The investors intend to develop a gargantuan, $1.5 billion, mixed-use complex of 14 20-story towers suited for residential, office, retail and marina use, Short said.
The 46-acre site is located within the shadows of the Rockwell Automation clock tower, directly south Greenfield Avenue, east of First Street and north of the Kinnickinnic River.
Short and his investment partners formed Golden Marina Causeway LLC to acquire the property from Cleveland Cliffs Inc. of Ohio. Real estate sources said the limited liability corporation paid approximately $400,000 for the site and agreed to put additional funds into an escrow account to help pay for demolition and site remediation. The property had a total assessed valuation of $929,900 in 2002.
Short is the managing partner of the new corporation, which is gathering the financing to develop the project.
He tentatively refers to the office tower redevelopment as Gas Light Park.
The investors already have some office tenants who have given preliminary commitments to occupy space in the towers, Short said.
Short, who still resides in St. Paul, Minn., said the property and others like it near the Port of Milwaukee are ripe for development. Short said he was involved in similar industrial rehabilitation projects in St. Paul when that city essentially reinvented itself by capitalizing on its waterfront properties along the Mississippi River.
"When I came here from St. Paul, I looked at the Port of Milwaukee and said to myself, ‘This is just like St. Paul 20 years ago,’" Short said.
Short said he has reached a verbal agreement with Lyle Balistreri, president of the Milwaukee building and Construction Trades Council, AFL-CIO, for the towers to be built by union labor.
Although the investors have acquired the Solvay property, they will face plenty of obstacles in their path to launch the development.
The first issue to be overcome is the environmental contamination at the site.
The site was first developed as an industrial site in 1902, where metallurgical coke was manufactured for use in the production of steel, foundry coke, coal gas and coal tar, according to historical archives at the University of Wisconsin-Milwaukee.
The US Environmental Protection Agency has not declared the site a Superfund site, but the EPA has documented some contamination at the site, which has been vacant since 1982. Contaminants found in the soil, groundwater and sediment, including arsenic, chromium, cyanide and lead, according to the agency.
The City of Milwaukee has classified the Solvay site as a "mothballed brownfield."
Indeed, the site, which is located between two sets of railroad tracks, is riddled with dilapidated buildings, rubbish, barrels and overgrowth.
"It’s a blighting influence and a nuisance," said William Zaferos, spokesman for the Milwaukee Department of City Development.
"We’ve made a deal with the EPA to clean it up," Short said.
The EPA issued an administrative order by consent for Short to remediate the site. Terms of the agreement were not disclosed, but a cost assessment study conducted by the Milwaukee School of Engineering in 2001 estimated the site remediation costs at $10.4 million.
The environmental remediation will be performed by Eli Cos., an environmental and demolition company, which shares an office with Short’s Water Street Holdings LLC near the Port of Milwaukee.
The investors have contracted Earth Tech Inc., an engineering company based in Long Beach, Calif., to be the project manager for the remediation.
"We expect to start cleanup within 30 days and hope to begin development by the end of the year," Short said.
Compared with other types of seeping contamination, soil that is polluted by coal is relatively easy to remove, he said.
In addition to the contamination, the Solvay project also faces the obstacle of gaining the approval of the City of Milwaukee to proceed with development.
The city has not devised a plan for the development of land surrounding the Port of Milwaukee, and Julie Penman, commissioner of the Department of City Development, said the city does not want the port to be developed in "piece meal" fashion.
The Solvay site is zoned by the city for industrial use and had a 2002 property assessment value of $929,900.
A final obstacle for the redevelopment project may be the market. Some real estate officials in Milwaukee question whether the city’s office and residential markets could support such a large-scale development.
To put the scope of the Solvay project into perspective, its projected $1.5 billion cost would be more than three times the value of the Miller Park project, which exceeded $400 million, and would be five times the value of the proposed $300 million Pabst City project at the former Pabst Brewery site in downtown Milwaukee.
The only other development project to rival the Solvay project would be the proposed $1 billion Pabst Farms mixed-use project in Oconomowoc.
April 4, 2003 Small Business Times, Milwaukee
