Mark Irgens said his last multi-family project was 1984, when he built some apartments in downtown Appleton.
Needless to say, his plans to redevelop the former M&I Bank headquarters office tower at 770 N. Water St. in downtown Milwaukee into 231 apartments and ground-floor retail is a departure from the types of projects he’s become known for. His firm, Milwaukee-based Irgens Partners LLC, is mostly known as a developer of Class A office buildings.
Irgens Partners owns the 21-story former M&I building, which was most recently occupied by BMO Harris Bank, until Irgens completed the new BMO Tower next door.
In crafting a redevelopment strategy for the former M&I building, Irgens considered a mix of apartments, offices and hotel rooms before initially deciding to keep it as an office tower.
But now the firm is shifting gears and plans to transform the buildings into apartments, instead of keeping it as an office building. The new plans make sense on a number of fronts, said Irgens. The reasons include the realities of the office market and a need for more housing, particularly affordable housing, in downtown Milwaukee.
Irgens, who is chief executive officer and manager of Irgens Partners, said the 53-year-old building is outdated as an office building, with floor plates and building systems that are inferior to the likes of the new 25-story BMO Tower.
“We said, ‘Well maybe we should be doing something different,’ ” Irgens said in an interview with BizTimes.
The redevelopment will be more oriented toward creating workforce housing, Irgens said. Specifically, around 20% of its units are going to be set aside as affordable.
Irgens said apartment rental rates are high in downtown Milwaukee, which means that some of the people who work downtown can’t afford to live there.
“We think that it’s important as an economic development tool for downtown Milwaukee, is having housing that is affordable for people who work there,” he said.
The building is also in a good location for apartments, given its easy access to public transit such as The Hop streetcar, he said.
Irgens Partners has a lot of work ahead of it for this project. That includes piecing together the financing for the estimated $90 million price tag. It is in the process of securing a first mortgage, exploring tax credit programs and speaking with investors, Irgens said. The firm is seeking non-competitive federal tax credits for the affordable housing component, as well as historic tax credits.
It has applied for historic designation of the building through the National Park Service so it would be eligible for the historic tax credits. The city’s Historic Preservation Commission on Monday opted to support the nomination for historic designation. Irgens said his team will also go in front of building State Historic Preservation office this month.
“There isn’t just one lynchpin” to move the project forward, said Irgens. “There’s many things that need to be accomplished, but that’s not unlike any of the other projects we’ve worked on. Real estate development is like Jell-O until it firms up.”
Irgens Partners is assembling a project team that has experience in the residential market, including Milwaukee-based architect Kahler Slater and Chicago-based contractor Pepper Construction. The firm also brought on Dick Lincoln as a project consultant. He previously worked at Milwaukee-based multi-developer Mandel Group Inc. as well as Irgens Partners.
It is also in talks with Milwaukee-based Founders 3 and its property-management arm to potentially manage the apartments, said Irgens.
Residential conversions make sense for a lot of office buildings as they age, Irgens said.
“There may be buildings that have economic life left but maybe not as the use that they were originally programmed for,” he said. “And so, I think that you’ll see a number of office buildings that no longer really fit with what the current needs are of office tenants being converted to other uses.”
There’s certainly evidence of that happening in downtown Milwaukee. Some ongoing conversion projects include the former Sentinel Building at 225 E. Mason St., the River Bank Plaza at 740 N. Plankinton Ave. and the former Journal Sentinel office complex at 333 W. State St.
