Tag Archives: frederick-lofts

FREDERICK LOFTS REPRESENTS “TIPPING POINT” FOR CITY

At the dedication of 100-unit market-rate apartment building at the former Pabst Brewery, mayor hopeful for continued growth of downtown housing.

By Michael Horne, Urban Milwaukee, August 13th, 2015

MILWAUKEE - There was a time that when you referred to a city’s “Tipping Point,” you were talking about a catalytic event that led to a community’s decline. Today, the phrase, as applied to the City of Milwaukee, has a different connotation, says Mayor Tom Barrett.

“Milwaukee is at a tipping point,” he told a group of 50 people gathered Wednesday at the dedication of the Frederick Lofts, 840 W. Juneau Ave. “Not a negative tipping point, but a positive tipping point.”

The 100-unit apartment building was developed by Gorman & Company, Inc. at the east end of the former Pabst Brewery.

Prior to the purchase of the long-vacant brewery site by the Zilber Group, “there was no reason to come here,” the mayor said. In fact, the place was so desolate that “even the bad guys wouldn’t come here,” he added.

But today, “what is happening literally before our eyes are young people and the young at heart coming downtown. It’s a national phenomenon,” the mayor said. “Downtown is 3.6% of the landmass and 18% of the tax base” of the city, he said.

As if on cue, the sidewalks outside began to fill with workers from downtown office buildings as they left work, heading to their homes, some in The Brewery neighborhood itself. Gorman & Company developed the adjacent Blue Ribbon Lofts apartment building out of the former Pabst Keg House. In addition, Gorman developed the Brewhouse Inn & Suites one block west. The new development is immediately south of the Brewery Point Apartments, a senior living community.

Ald. Bob Bauman, whose 4th district represents that 18% of the city’s tax base, and is the focus of its tipping point, joked that “groundbreakings and ribbon cuttings are getting routine.”

Ted Matkom, the Wisconsin Market President for Gorman, said the site “was the poster child for blight in Milwaukee.” He recounted the failed attempt to turn the area into an entertainment district that would have required the demolition of many buildings. Such entertainment districts did not survive the great recession, he said. After that effort failed, Joe Zilber declared that the Pabst site “was going to be my legacy.”

Things were tough at first, Matkom said. Some 30 restaurateurs turned down a chance to open what is now Jackson’s Blue Ribbon Pub at the Brewhouse Inn & Suites, including what he called “all the big players.” Today, Jackson’s, run by Mark Zierath, who was in the audience (and who catered the event) “is killing it!” Matkom said. The Blue Ribbon Lofts, dating to 2008, are “100% occupied,” he said. The 90-room hotel has some of the top rates in the city,” and hopes are high for the Frederick Lofts.

As Bauman noted, the location is a success despite being in sight of the County Jail and a state secure detention facility.

John Kersey, the Zilber Group Vice President said “We would not have imagined market-rate housing when we started this thing.”

Today, market rate at the Frederick Lofts starts at $1,350 for studios and $1,790 for a two bedroom unit.

Three models were on display, and I toured them with Gary Gorman, the president of the firm that developed and owns the property. This is 100% new construction, with high-end features like granite countertops and floor-to-ceiling windows. A live-work unit of 696 square feet has a sliding partition that separates the work unit, accessible from the street, from the live unit. For those eager go-getters who like to bound out of the bedroom and straight into the kitchen for a hearty breakfast, there is no door between the two rooms to slow things down.

Gorman noted the floors of the units, which are uniform throughout, and consist of a wood-grain pattern and texture. The material is described in the sales material as “luxury hard surface plank in natural wood,” but it is a vinyl type product. Gorman says from experience, he has to replace carpets every three years, and this material should be more durable. I would rather it express its inner vinylness rather than masquerade as wood, and I found the texture to be unnecessary.

Among the attendees was Jim Haertel, who owns Best Place across the street. He now has 35 employees. His wife Nancy says their facility is nearly completely booked for 2016, including for the wedding of Urban Milwaukee CEO Jeramey Jannene and Alison Peterson and is now taking reservations for 2017. One of the couple’s favorite weddings of 2015 was that of Ald. Nik Kovac and Grace Fuhr in July, where guests arrived by bicycle. Dan McCarthy, who was instrumental in the development of the project, (and was on the wrong side of the Pabst City plan) was there as was banker Jon Mulcahy. Also in attendance was Joy Smith, a resident of the Blue Ribbon Lofts who writes a neighborhood newsletter.

The building has a nice rooftop deck with a kitchenette, and a number of people were gathered there during the event. The building has a partial green roof of sedum that looks in fine shape for a recent installation. The bioswales outside seem to have done their work during recent heavy downpours, as evidenced by the line of silt seen on some of the plants there.

The final word on the tipping point came from the mayor, who said “my wife wants to move downtown!” Barrett says that may happen soon, once the kids are out of the house.

The Brewery’s 100-Unit Frederick Lofts

By , UrbanMilwaukee.com, May 8th, 2015

Not so many years ago, the Pabst Brewing Complex was a ghost town at all hours of the day. The abandoned brewery, which abruptly closed its doors in 1997, served as a highly visible reminder of Milwaukee’s industrial past, looming over Interstate 43 with unused smokestacks and silos. Then in 2006, Joseph Zilber stepped in to buy the complex, rebranding it “The Brewery” and set out to build an entire neighborhood within it.

Gorman & Company has been an important partner of Zilber Ltd in the creation of The Brewery. The Oregon, Wisconsin-based firm has developed the 90-room Brewhouse Inn & Suites hotel in the former brewhouse building and the 95-unit Blue Ribbon Lofts apartments in the former keg house. With many of the historic structures renovated (or in the process of being so), Gorman has now started developing new buildings in the area.

Gorman’s 100-unit Frederick Lofts apartment building is scheduled to open this summer at the northeast corner of W. Juneau Ave. and N. 9th St. The privately-financed project will feature exclusively market-rate apartments. The project is named after Pabst namesake Captain Frederick Pabst. From 1875 to 1892 Pabst lived in a home on the site. Prior to that (and before mechanical refrigeration) tunnels were installed underneath the site to keep beer cold; construction crews found those tunnels on accident last April.

 

This residential project will take advantage of the recently rebuilt W. Juneau Ave., which was converted from a street designed for beer delivery trucks to a more human-scaled boulevard like Broadway in the Historic Third Ward.

Residents of the project will be able to park in an underground parking facility or in a surface lot behind the L-shaped building.

Frederick Lofts residents might soon find themselves with new neighbors as the new owners of the Milwaukee Bucks are seeking to build their own neighborhood just east of the The Brewery in the Park East corridor.

 

Developer Gorman realizing impact of housing at Pabst

By Sean Ryan, Milwaukee Business Journal, March 21, 2014

Developer Gary Gorman said he now knows the market for apartments in The Brewery in Milwaukee because there is a waiting list of people trying to get into his existing Blue Ribbon Lofts there.

That’s a good confidence builder as Gorman & Co. Inc. prepares to break ground on 100 additional market-rate apartments in The Brewery campus north of downtown Milwaukee.

But it wasn’t always this way, said Gorman, CEO of the Oregon, Wis.-based company. Development of the 95-unit Blue Ribbon Lofts, which opened in 2009, was a “white-knuckle ride,” he said, because the redevelopment of the large former Pabst Brewing Co. campus was just starting.

“I thought that was a pretty high-risk thing,” he said of the Blue Ribbon Lofts. “I didn’t know how the market would react.”

Blue Ribbon Lofts, which has a mix of market-rate and affordable apartments, is performing well, driving the follow-up Frederick Lofts project that will open in July 2015. Other buildings at The Brewery will be converted into housing for seniors and foreign college students.

“We were the pioneer in terms of residential,” Gorman said. “People will move into challenged or new neighborhoods if you give them an interesting place to live.”

Whitestone Realty Capital, New York City, is planning an up to $46 million restoration of buildings in The Brewery to create 124 senior housing units. Construction is expected to begin in April for a July 2015 opening.

Blue Ribbon Management LLC plans to renovate a different building in The Brewery into 360 housing units for foreign students attending Milwaukee colleges. That project also includes a 40-room extended-stay hotel.

Frederick Lofts at Pabst

By , Reporter- Milwaukee Business Journal, March 15, 2014

Work will start this month on Gorman & Co.’s market-rate apartment project in The Brewery in Milwaukee after the developer secured financing and bought the project site.

The four-story building will open to tenants in July 2015, with rents starting at $1,350 for a one-bedroom and $1,750 for a two-bedroom unit. The three live/work units will start at $1,450 a month.

The Frederick Lofts will be built at North Ninth Street and West Juneau Avenue in the former Pabst Brewing Co. campus just outside of downtown Milwaukee.

BMO Harris Bank has closed on $10.3 million in financing for the project, said Gary Gorman, chief executive officer of Gorman & Co., Oregon, Wis. Gorman also has $6 million through a Chinese investor. Chinese investors, through the federal EB-5 immigration program, have financed several projects in The Brewery in exchange for green cards.

This investor, however, simply is putting money into the project without using the federal program, Gorman said. The investor, who Gorman met through his connections in Shanghai, selected the project after touring The Brewery and the Brewhouse Inn & Suites hotel that Gorman developed.

“He made the decision on the spot,” Gorman said. “Just made a $6 million decision on the spot and shook our hands and said, ‘That’s it.’ We had to talk him into hiring a lawyer for it. He said, ‘But I just shook hands with Gorman.’”

Gorman last week also closed the $1.4 million land purchase for the site with The Brewery’s owners. which is run by executives at Zilber Property Group.

Gorman’s project is among a slew that developers are getting out of the ground this spring in that area.

“Part of it is interest rates are very favorable right now,” Gorman said. “That really makes the numbers work, and the demand is good.”

Pabst apartments site sells for $1.4 million

By Tom Daykin, The Journal Sentinal, March 18, 2014

A planned apartment site at downtown Milwaukee’s former Pabst brewery has  been sold to a developer for $1.4 million.

The 1.3-acre site, at 810-840 W. Juneau Ave., was sold to Frederick Lofts  LLC, an affiliate of Oregon, Wis.-based Gorman & Co., by Brewery Project  LLC, according to state real estate documents recorded Monday.

Gorman in August announced it would develop a four-story building with  100 high-end units, known as Frederick Lofts, at that site. Construction is to  begin this spring, with the building completed by spring 2015.

This will be the third development Gorman has done at the former Pabst  complex, now known as The Brewery.

Gorman converted the former keg house into the 95-room Blue Ribbon Lofts  apartments, 901 W. Winnebago St., and converted the former brewhouse and  millhouse into the 90-room Brewhouse Inn & Suites hotel, 1215 N. 10th  St.

 

Former real estate lawyer Gary Gorman overcomes early challenges to build successful business

By Tom Daykin, Journal Sentinel, September 30, 2013

Gary Gorman was a real estate attorney when he decided he’d rather be a developer, instead of the guy who gives developers legal advice.

Gorman & Co. was launched in 1984. Within a few years the firm was focusing on apartment buildings, aimed at lower income renters, partly financed with federal affordable housing tax credits, along with projects that use historic preservation tax credits. Today, located in the Dane County community of Oregon, the firm has 230 employees, operates dozens of properties in Wisconsin, Illinois, Florida and Arizona, and annually develops apartment buildings and other projects costing around $75 million.

The firm’s Milwaukee-area developments include the new Brew House Inn & Suites, a hotel created at the former Pabst brew house, along with Blue Ribbon Lofts, apartments developed within the brewery’s former keg house. The company also plans for another apartment development at the Pabst complex, now known as The Brewery.

Gorman recently met at the Brew House Inn to talk about his early challenges as a developer — including a partner who was a cocaine addict — how the firm grew, and its new foray into the hotel sector. Here’s an edited transcript of that interview.

Q.How did you become a developer?

A. When I got out of law school (in 1980) I was hired by a firm and promoted by that law firm as somebody who knew something about real estate syndication, which is just a fancy term for putting together a group of investors to do deals. I represented developers and syndicators for four years.

Then they offered me a partnership. And I thought, if I become a partner, then I’m going to stay. And it really wasn’t what I wanted to do. I was more intrigued by the business side. So, June of ’84, I left the law firm. I teamed up with two other guys (including a marketing expert). One guy that was older, more experienced and allegedly had more money.

Q.Did it turn out he didn’t have any money?

A. Well, you’re guessing the rest of the story. Our basic strategy was that we were going to put existing properties under contract, we were going to raise the equity capital by selling limited partnership shares, buy the properties, have somebody else manage them, and then we sell them after five years and take a piece of the profits. That was the idea.

So, within about six months of leaving the law firm, the marketing guy and I started seeing these letters coming in from collection agencies, and dunning letters from banks and other creditors to this older guy. The bottom line is he had this white powder problem that I didn’t know about. Should have done better due diligence. His frequent trips to Jamaica were not just to lay in the sun.

Q.What happened?

A. The marketing guy and I left him and formed our own little shop. And we did one deal in 1985 called Seminary Park Apartments, in Evansville, Wis. It was a small deal, 24 units. It was a historic rehab of abandoned school buildings that had previously been a private school for boys. So it had been empty for a long time.

It was immensely complicated for a small deal, and we probably made about $1.50 an hour. But that created a track record. At the end of that deal, the marketing guy said, “I can’t live like this any more. I never know if we’re going to have the deal, not have the deal. I don’t know if I’m going to have a paycheck.” (So the partner left the firm.)

Q.How did it feel to be on your own?

A. It felt a little lonely. Then tax reform started heating up and it eventually passed in 1986. That changed the tax code completely, and it eliminated a lot of the benefits of investing in real estate. But it created a new tax credit, the affordable housing tax credit. So I thought maybe I could work with that.

Q.Did you just immediately think there’s just unlimited opportunity there?

A. No, God no. I thought: Would this ever work? And who would ever invest seeking this credit? And should I go back and beg my senior partner at the law firm to take me back? All those thoughts were going through my head. And there were times when I literally ran out of money.

I worked with a law firm and an accounting firm to put together four private placements in 1987 that were raising capital for (tax credit) deals that another builder built because I didn’t have the capacity to build anything. It was a lot of work.

I got a call one day (in 1987 from Boston Financial). They had a fund that had raised money to invest in these tax credits, and would I be interested in having that fund invest as the equity investor?

Q.And you said, “Would I?”

A. I kind of held the phone away like, is this really happening? Absolutely, I wanted to.

Q.With the advent of the fund, I assume your life got a lot easier in terms of financing.

A. It did. Trying to find investors that put in $5,000 apiece a year was tough. The first institutional deal was a big break-through.

Q.At what point were you starting to do multiple projects a year?

A. I think we did two a year in ’88 and ’89. (As the firm grew, it added in-house property management and construction divisions. In 1995, it hired Tom Capp, a former Fitchburg mayor who is now Gorman & Co.’s chief operating officer.)

Q.Was adding Tom a turning point?

A. It really was. It added a level of political sophistication that, frankly, I didn’t have. He really knows how to work with city planners, mayors, elected officials, plan commissions. He knew that mentality. He had a greater level of patience with the political process.

Then we started to grow, did more projects. All of the equity was from institutional investors. Then we thought we would internalize the architectural function. We did that in ’99. At that point we sort of had the bones of an integrated development firm. That’s where we are today.

Q.What percentage of your business comes from affordable housing developments?

A. Probably 85%.

Q.How did you first get involved in doing the Brew House Inn & Suites?

A. (During a presentation to some Chinese government officials who were visiting Madison, Gorman was impressed with the interpreter, University of Wisconsin-Madison law student Ying Chan. Gorman hired him as an intern.) I was paying him, but I really didn’t know what he was doing. He was going to seminars here and there, and then he left when he graduated from law school.

He called me about six months later and said that he had been successful raising money through this EB-5 program (in which foreign citizens receive green cards in return for job-creating investments in the United States) for an immigration attorney out of the state of Washington who had never done a development deal before. I said, Ying, if you can raise money for someone who has never done anything before in the development area, it ought to be easy for you to raise money for us.

We had done Blue Ribbon Lofts, and we thought, where can we find another historic (preservation) deal that was of some size? Talking to the Zilber folks (owners of the Pabst complex), they pointed us to this building. The reason it’s a hotel rather than an apartment building is that to attract EB-5 capital you have to create jobs. A hotel and (restaurant) produce a lot more jobs than an apartment building.

Q.You’ve never done a hotel before, right?

A. No, but we have a regional manager, Laura Narduzzi, who’s got 25 years experience (in the hotel industry). I completely defer to her judgment on designing the hotel, running the hotel. I’ve stayed in a thousand of them but I don’t know anything about running them. I’m learning a little bit now, though.

Q.What have you learned?

A. The staffing level is much higher than an apartment building. The service level is huge. You have to have skilled, well-paid people on site, all the time.

Q.Are you making money?

A. We’re doing OK. Is it belching cash? No, not in the early phases. But we’re doing a lot better than our projections showed.

Q.Are you going to do other hotel investments?

A. We have a deal in Kenosha, called Heritage House. It’s a historic building. We’re about to convert that into a boutique historic hotel. I just made a presentation to the mayor of Rockford, Ill., and his staff on a project there that would be a historic hotel combined with a conference center. I made a presentation in Butte, Mont., with a concept of a similar combination of a historic hotel and a conference center. It’s opened up another area for us.

Q.But you’re going to continue to primarily be an apartment developer, right?

A. Yeah, that’s our core competency.

New apartments at Pabst win approval

The Milwaukee Plan Commission approved a proposal Monday to develop a 100-unit high-end apartment building at the former Pabst brewery.

As I reported last week, the $20 million four-story building would be at the northeast corner of W. Juneau Ave. and N. 9th St. The vacant lot is just east of the parking structure at the Pabst site, now known as the Brewery.

Gorman & Co., based in the Madison area, plans to begin construction next spring. Known as the Frederick Lofts, it would include underground and surface parking, a fitness center, clubhouse and rooftop deck.

The prospective monthly rents would range from $990 for efficiency units to $1,750 for two-bedroom units.

By Tom Daykin of the Journal Sentinel

http://www.jsonline.com/blogs/business/220242071.html