Can the place that made the beer that made Milwaukee famous become a magnet for downtown fun-seekers?
Developers hope to transform the site of the Pabst brewery, which closed in 1996, into 480,000 sq. ft. of entertainment and retail space, 225,000 sq. ft. of office space, 500 residential lots and a 3,320-space parking structure. “The goal is to make PabstCity a one-of-a-kind regional draw,” says John Ferchill, CEO of Cleveland-based Ferchill Group, a member of theteam Juneau Avenue Partners.
Ferchill, which turned the Cleveland Flats warehouse district into an entertainment destination, is the majority partner in the PabstCity development. Financing for the $300 million project has not been nailed down, and no major tenants have been signed, but the developers say they will break ground next year and the first stores will open in late 2005. The only announced tenant is a youth sports facility — operated by a non-profit organization established by Milwaukee Bucks Head Coach George Karl — which is taking 50,000 sq. ft.
The upper floors of the buildings will be devoted to about 500 residential lofts and roughly 225,000 sq. ft. of office space.
Ferchill anticipates that a $150 million mortgage will cover half the cost of the project, with the partners kicking in roughly $100 million in equity. The remaining $50 million is expected to come from sources such as tax increment financing, historic tax credits and the sale of loft development rights.
In addition to Ferchill, the Juneau Avenue Partners development team includes Milwaukee-based Wispark LLC, the real estate development subsidiary of Wisconsin Energy Corp., which has signed on as majority partner. Minority partners include Milwaukee-based BCR Group and Atlanta-based TerreMark Partners, which also is in charge ofand marketing PabstCity.
The partnership closed on the purchase of the property in September 2002, buying 22 acres of land and 26 buildings for $10 million from the Pabst Brewing Co. The price amounted to less than $10 per sq. ft. — a steal, considering the shell is worth more than that, Ferchill says. The site includes buildings constructed between 1872 and the 1940s, 20 of which will be converted to commercial use.
PabstCity already is being billed as a catalyst for redevelopment on the west side of the city. “I think it is a wonderful thing for the downtown area and Milwaukee in general. Urban renewal is terrific for any city,” says Max Rasansky, president and CEO of Milwaukee-based Polacheck Co., a CB Richard Ellis partner. PabstCity represents a continuation of downtown's rebirth that started more than a decade ago with the redevelopment of the Schlitz Brewery as a 44-acre office development, he says.
If successful, PabstCity could fill a hole in the entertainment scene, drawing an estimated 1 million people to downtown Milwaukee annually, according to the developers. Nearly 7.2 million people live within an 80-mile radius. And those visitors have dollars to spend. According to a recent study, average per capita spending on food and entertainment in the Milwaukee MSA is $429 per year, compared with theaverage of $402.
In many cases, those entertainment dollars were being spent in places such as. “I don't believe that we are competing with anybody,” Ferchill says. “What we are going to do is grow the market.”