The developer still pursuing plans to transform a former Sears building on Milwaukee’s near northwest side into a boutique hotel could get another year to begin paying back a $4 million loan city loan for the project as part of a tax incremental financing district for the site.
Kalan Haywood, president of Milwaukee-based
Haywood Group LLC approached the city in March 2019, seeking public assistance for his plans to turn the historic building at the northwest corner of Fond du Lac and North avenues into an 80-room, full-service boutique hotel, called the Ikon Hotel, featuring a restaurant, lobby bar and co-working space. The plans also included a 23,600-square-foot conference center to be built next to the historic building.
As part of the original agreement between Haywood’s company, HG Sears, LLC, and the Redevelopment Authority of the City of Milwaukee, Haywood had two years before he needed to begin making payments on the loan, first as interest-only payments, then three years later with principal and interest payments to be paid over 15 years.
In August of last year, the RDA voted to extend the no-payment term of the loan for another year. With that grace period slated to come to an end on Sept. 1, the Redevelopment Authority is now proposing giving HG Sears until September 2023 to begin making payments. As part of the deal, Haywood will have to provide monthly project status reports to the Redevelopment Authority.
The board that oversees the Redevelopment Authority of the City of Milwaukee is slated to vote on the extension when it meets at 1:30 p.m. on Thursday.
Asked why Redevelopment Authority officials were recommending another extension of the grace period, a Department of City Development spokesperson provided this statement:
“The future of this site is important to this part of Milwaukee and for the entire city. We are aware of the challenges all developers have faced in the past two years. With that in mind, we are proposing a modification of the terms to give the current developer an additional year to solidify a revised, feasible plan. We look forward to realizing the full potential of this site and returning it to productive use.”
Haywood could not immediately be reached for comment.
The Common Council also approved a $5 million loan for the Ikon project, under the restriction that the funds from the second loan could not be spent until the project's other financing sources have been tapped.
Haywood has already spent most of the original $4 million loan on the acquisition of the property and interior demolition at the site, according to the city.
