A U.S. magistrate judge has dismissed a lawsuit seeking to evict the U.S. Postal Service from its downtown Milwaukee location.
Separately, USPS is moving forward with plans for a 425,000-square-foot facility in Oak Creek. That project, however, is a replacement for the current USPS facility in Oak Creek, according to USPS spokesman Sean Hargadorn.
The lawsuit, brought by an affiliate of Chicago-based R2 Properties, the building’s owner, argued USPS had failed to properly maintain the facility, breaking the lease and warranting the eviction of the Postal Service.
The two sides did engage in settlement talks, but those reached an impasse this spring.
R2 Properties bought the facility in 2015 and announced ambitious plans to redevelop the site along St. Paul Avenue with offices, residential, shopping and entertainment. USPS currently has the option to renew its lease in five-year increments through 2040.
When documents for the Oak Creek project were filed by USPS with the Wisconsin Department of Natural Resources in September, it was seen by many as a sign of life for the downtown redevelopment project, even as the lawsuit was still pending.
U.S. Magistrate Judge Nancy Joseph ruled Wednesday that the lawsuit failed to state a claim on which relief could be granted and dismissed it, giving the property owner 30 days to potentially file an amended complaint.
The lawsuit pointed to a number of issues with the building including moss, plants and bird droppings on a portion of the roof, safety netting installed to protect from falling concrete and the erosion of an epoxy coating that would allow water to get into the building.
Matt Garrison, managing principal of R2, said that USPS was unresponsive to his company’s concerns prior to the lawsuit being filed.
“This dismissal notwithstanding, we accomplished our main objective when the USPS began significant repairs on the property earlier this year,” Garrison said in an email. “We are watching, and expect the property to be maintained and avoid ‘voluntary waste’, or we may take further action.”
Hargadorn did not address the lawsuit’s dismissal when asked for comment.
Joseph determined that the current lease does not require USPS to repair ordinary wear and tear, damages from the elements or circumstance beyond its control.
“The lease does not require USPS to keep the Property in a state of perpetual readiness for new tenants. At most, during the lease term USPS must only maintain and repair the Property as necessary to continue using it for postal purposes and refrain from voluntary waste,” Joseph wrote.
She noted that moss and bird droppings appeared to be a cosmetic issue, safety netting actually allowed the for the continued use of the building and the epoxy issues were the result of normal wear and tear.
“On the facts alleged, I can only infer that these defects are caused by the natural deterioration of aging structures, and they are not alleged to significantly impact USPS’s operations, if at all,” Joseph wrote.
She said the contract also gives USPS “extensive leeway to perform repairs in its own way and at its own pace.”
“Honoring this discretion does not erase USPS’s responsibility for maintenance and repairs, as the Owner argues,” Joseph wrote. “It simply prevents the Owner from requiring USPS to perform specific repairs at a specific time or in a specific way during the lease term.”
While the status of the downtown Milwaukee location is more certain, the outlook for the Oak Creek project is more up in the air.
Oak Creek city administrator Andrew Vickers said the city received a letter on July 30 from USPS indicating it planned to proceed with construction of the new facility at 2201 E. College Ave. The letter gave the city seven days to indicate if it would provide comment on the project, which the city did.
The letter indicated construction would begin in October. Hargadon said the project is still in the early phases of design so actual timelines are not available.
“This new facility is being built to replace the current Milwaukee Annex, located in Oak Creek, due to the increased parcel volumes and increased space and operational challenges that facility has faced in recent years,” Hargadon said.
Outside of the letter, Vickers said the city has not had any communication with USPS and in some cases is learning details through the media.
“We have not receive a single plan,” he said, noting USPS cited federal law that could exempt it from the typical approval process. “We have not heard anything.”
Oak Creek did approve plans for a larger USPS facility at the site in 2008, but those approvals have since expired.
He said city staff is drafting a resolution for the common council to consider next week that would encourage USPS to go through the typical approval process.
