The City of Milwaukee might again seek redevelopment plans for a prominent downtown site because of doubts about a pending proposal − from a firm that recently halted work on a neighboring high-rise with a $25 million cost overrun.
The Common Council’s Zoning, Neighborhoods and Development Committee is considering that action after committee members heard a report from Mayor Cavalier Johnson’s Department of City Development on the stalled Neutral.Edison apartment tower.
Construction on that 31-story, 378-unit building, at 1005 N. Edison St., unexpectedly stopped in September.
Its developer, Madison-based Neutral, has characterized the halt as a temporary measure while it looks at ways to reduce project costs. The project began construction in spring and has completed the foundation work.
The Johnson administration in July 2024 recommended Neutral be granted a one-year exclusive right to negotiate a purchase of the city-owned Marcus Center site, 1001 N. Water St. That would give Neutral time to refine its $750 million high-rise development plans.
But the Common Council hasn’t considered that negotiation right because Bauman and other council members are skeptical of Neutral’s ability to make its plans a reality.
That skepticism was displayed at the zoning committee’s Oct. 7 meeting.
Financing not complete for Edison, which is under construction
Neutral hasn’t completed its financing for the Edison, which is over budget, said Alderman Robert Bauman, committee chair. He said general contractor C.D. Smith Construction apparently has walked off the job, and subcontractors are preparing to file liens over unpaid bills.
Development Commissioner Lafayette Crump said he believes C.D. Smith is working with Neutral on finding cost reductions for the Edison.
Crump told Bauman and other committee members the project’s budget has increased from $205 million to around $230 million. That increase is tied to increased material costs, he said — with Neutral earlier citing inflation and tariffs as factors.
Neutral also is seeking additional equity investments to help close that $25 million gap, Crump said.
Crump said he expects Neutral is “going to get this project done.”
Neutral hasn’t requested city financing help, Crump said.
Edison developer might seek additional city funding
But, the firm is considering changing the Edison’s unit mix to add apartments set aside for “workforce housing,” Crump said.
That could take advantage of a new city policy that provides city financing help for apartment developments that set aside units at below-market rents for people earning 80% to 100% of the Milwaukee area median income.
The Common Council recently approved tax increment financing districts — which use property tax revenue generated by new buildings — for two pending apartment developments: the conversion of the 100 East office tower to 373 units at 100 E. Wisconsin Ave., and the conversion of the historic Mitchell Building, 207 E. Michigan St., into 60 units.
Both development plans include workforce housing.
Neutral CEO Nate Helbach declined the Milwaukee Journal Sentinel’s request for comment.
In a separate action, the committee reviewed Bauman’s proposal directing the Department of City Development to again seek redevelopment proposals for the 2.5-acre Marcus Center parking structure site.
Bauman said Neutral has a weak track record, and said its conceptual plan for high-rises at the Marcus site isn’t viable.
“Let’s resubmit the project … and see what the national real estate market has to say about it,” Bauman said. “I see no harm in that.”
He said “there’s no way” the council would grant Neutral a negotiation right for the Marcus site.
Crump said there are legitimate questions about Neutral’s ability to complete the Edison and develop the Marcus site.
But, he said, there could be cost savings for Neutral to develop both projects given the fact they are next to each other.
Crump said restarting the process of requesting proposals would take time.
He also said not granting the negotiation right to Neutral — which would create a process for city officials to more closely evaluate the Marcus proposal — sends a bad message to developers.
“I think this is extremely premature,” Crump said. He said the city should wait six months to see if Neutral can proceed with the Edison.
Committee members weren’t swayed.
“Shutting down a project three months after groundbreaking?” Bauman said. “That’s normal?”
Meanwhile, the Marcus Center needs to make improvements to the parking structure if it isn’t going to be developed, Bauman said.
The committee approved Bauman’s proposal to delay a decision on his proposal for 30 days to see if any progress occurs on restarting the Edison. But he didn’t sound optimistic.
“I think this project is dead, period,” Bauman said.
Tom Daykin can be emailed at tdaykin@jrn.com and followed on Instagram, Bluesky, X and Facebook.
This article originally appeared on Milwaukee Journal Sentinel: Halted Edison high-rise has $25 million cost gap. That could stop its Marcus development plan
Reporting by Tom Daykin, Milwaukee Journal Sentinel / Milwaukee Journal Sentinel
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