Old factory given new life
Investments will refurbish 6-story Harambee building
After three years of planning and preparation, workers have started transforming a former shoe factory and business incubator on Milwaukee’s north side into offices and apartments.
The Welford Sanders Historic Lofts will open the refurbished office space in May, with the affordable apartments opening in spring 2018 at 2801-2821 N. 4th St. The project’s complicated financing package includes a city grant, as well as state and federal tax credits.
The $21 million investment will play a big role in improving the Harambee neighborhood, which is seeing other major projects, said developer Robert Lemke.
Those other developments include Gorman & Co.’s June start to convert the neighboring former Fifth Street School, 2770 N. 5th St., into 49 affordable apartments for seniors, and plans to replace the King Library branch, 310 W. Locust St., with a four-story building that includes a new library and retail space on the street level, and 44 marketrate apartments on the upper floors.
Wisconsin Redevelopment LLC, led by Lemke, is working with Martin Luther King Economic Development Corp., a nonprofit group, on Welford Sanders Historic Lofts.
The developers are converting a 190,000-square-foot building that was constructed in 1916 by Nunn Bush Shoe Co., according to the Wisconsin Historical Society.
The sprawling property covers about half the block north of W. Hadley St., between N. 4th and 5th streets, and consists mainly of three connected buildings, said Ben Johnson, Martin Luther King Economic Development Corp. board chair.
The Milwaukee Area Technical College bought the closed factory in 1985 and created a small-business incubator, Milwaukee Enterprise Center North. The college sold the property in 2011 to a local investors group.
That group’s plan to create apartments fell through, and it was sold in 2014 to Tampa, Fla.-based Mercy Foundation Group Inc.
Mercy continued leasing space to small businesses, but around two-thirds of the building remained unused before it was sold later that year to an affiliate of Sunset Investors for $220,000.
The Sunset group, led by developer and investor Ken Breunig, then donated the building to the developers, according to state real estate records.
“He’s a hero,” Lemke said about Breunig’s role in the project.
Lemke and his partners in 2015 announced plans for Welford Sanders Historic Lofts.
Its financing includes $14 million raised by selling state and federal historic preservation tax credits, and federal affordable housing tax credits, to Associated Bank and New York-based R4 Capital.
The financing package also features two Wisconsin Housing and Economic Development Authority loans, and city funds provided through the improved building’s property taxes.
The developers on Jan. 31 completed the financing package and promptly started the renovations. The project’s general contractor is Catalyst Construction, with Continuum Architects and American Design serving as the architects.
The first phase involves creating around 35,000 square feet of office space on the building’s three-story eastern portion, Lemke said. The building’s office tenants will move there in May.
The improved space will include new hardwood floors, exposed brick and, on the top floor, the building’s original skylights. Around 3,000 square feet of office space is planned for the detached former boiler building.
Around 80% of the offices are already leased, with the building retaining most of its commercial tenants, Lemke said.
The development is providing affordable office rents to help attract and keep groups that work on finding jobs for people, especially those who face barriers to employment.
Around eight small businesses that don’t share that mission will relocate. Some might move to the nearby Ameritech King Commerce Center, 2745 N. King Drive, said Deshea Agee, executive director of the Historic King Drive Business Improvement District.
The conversion of the building’s sixstory western portion into 59 apartments will begin this spring after the office tenants move to the building’s eastern portion.
The development’s housing portion will include underground parking in the building’s basement, Lemke said. The former shoe factory’s cafeteria will be converted into a community room for residents.
The apartments will be leased at below-market rents to people earning no more than 60% of the area’s median income. That requirement is tied to the federal affordable housing tax credits.
A two-story, 53,000-square-foot former shipping area will be removed from the middle of the building to help bring more light into the future apartments.
Demolishing that part of the building also will create an outdoor courtyard for the residents. It will include a statue of the development’s namesake, Welford Sanders.
Sanders became involved with the Martin Luther King Economic Develop-