Schlitz Park developer Gary Grunau today announced plans for a $76 million multi-phase, mixed-use expansion over the next five years for the complex just north of downtown Milwaukee.
The projects planned for Schlitz Park would add 290,000 square feet of office space, a 140-room hotel and 140 apartments.
The first phase of the expansion will be a conversion of 50,000 square feet of warehouse space, formerly occupied by Assurant Health, in the Schlitz Park Rivercenter building into office space. Construction is expected to begin during the first quarter of 2016 and be complete by the end of the year. The converted office space will have room for 400 employees, Grunau said.
The second phase of the expansion would convert some existing space and add a four-story addition to the Schlitz Park Powerhouse building, which would create an additional 80,000 square feet of office space. The building addition would include terraces overlooking the Milwaukee River and the Brewhouse Square park. The new office space would provide room for 480 employees. Construction is expected to begin in 2016 and be complete in early 2017.
“(The Powerhouse building expansion) is being seen by a couple of tenants looking at moving in 2017,” Grunau said. Some pre-leasing of space will be necessary to get the Powerhouse building expansion going.
The cost of the first two phases of the Schlitz Park expansion is estimated at $20 million, he said.
For the third phase of the project, Schlitz Park plans to add a $25 million, four-story, 160,000-square-foot office space expansion on top of the four-story Rivercenter building. This project is targeted for a corporate headquarters and will need at least half of the space pre-leased to begin construction, Grunau said. The space could be available in 2017, he said. It would provide views of the river and the downtown skyline.
“We think that space would be spectacular,” Grunau said. “It would make a great corporate headquarters. We’re trying to see if we can get a corporate headquarters moving from the suburbs to downtown.”
Schiltz Park also plans to develop a $15 million, four-story, 140-room hotel targeted towards business travelers on a one-acre site along the Milwaukee River between the ManpowerGroup corporate headquarters and the Time Warner Cable building. The Brewery Works Inc., which owns Schlitz Park, would likely partner with a hotel developer for that project, Grunau said. Existing tenants in Schlitz Park, including ManpowerGroup and UMB Fund Services, would benefit from having a hotel nearby, he said.
Schlitz Park also plans to partner with a multi-family housing development to do a $16 million, 140-unit market rate apartment development on a vacant site north of Pleasant Street between North 1st and 2nd streets.
The expansion plans for Schlitz Park come after The Brewery Works invested $62 million in improvements to the 46-acre campus from 2011-14 and increased the occupancy of its 1.2 million square feet of space from 67 percent in 2010 to 98 percent in 2015.
Schlitz Park currently only has 15,000 square feet of available office space, although an additional 20,000 square feet of office space will be vacated by the relocation of The Previant Law Firm.
Schlitz Park is close to announcing new leases for the 18,000-square-foot fifth floor and the 17,000-square-foot fourth floor of the Stockhouse building, Grunau said. The fifth floor tenant will bring 110 employees to Schlitz Park, he said.
The expansion projects will create a need for more parking spaces. Schlitz Park is in the early stages of planning to add one or more parking structures, Grunau said.
“We have a lot of places that we could add parking decks,” he said.
Grunau’s group purchased the former Schlitz brewery in 1983 and converted it into an office complex. The campus had a high vacancy rate and needed an upgrade in 2010, so The Brewery Works invested $62 million in space and amenity upgrades hoping to take advantage of rising national trends of more people and businesses moving to downtown areas.
The latest expansion plans show that Grunau remains bullish that more residents and businesses will want to move downtown. The area around Schlitz Park is booming with several apartment projects under construction or planned along North Water Street. Plans for a new arena nearby and a possible King Drive extension to the planned downtown streetcar are also helping to attract interest in Schlitz Park, Grunau said.
“Milwaukee is on a roll right now,” he said. “We want to keep it going. Obviously, as a developer, you want to take advantage.”
