Work continues on central city hotel
Work to convert a historic former Sears store into a boutique hotel in Milwaukee’s central city is continuing even as the developer is late on paying the building’s property taxes.
The planned 80-room Ikon Hotel, 2100 W. North Ave., is being created with up to $9 million in city funds.
Work began in late 2019 on removing the building’s asbestos, and doing internal demolition as part of the $36 million project.
That initial phase will be completed in about four weeks, said Ikon developer Kalan Haywood Sr.
It has taken longer than expected because of the COVID-19 pandemic, Haywood said.
When that work is finished, Haywood and his development team will focus on possible changes to the hotel’s design and operations to adjust to “the post-pandemic world,” he said.
He declined to say when the Ikon might open. The hotel was to be completed by the end of 2022.
The property is owned by HG Sears LLC, an investment group led by Haywood.
HG Sears is late on paying the 2019 property tax bill of $52,329, according to the city Treasurer’s Office.
Haywood said that bill will be paid by the end of 2020.
The Common Council and Mayor Tom Barrett in May 2019 approved a $4 million loan to help start the Ikon project.
HG Sears LLC, has so far spent $3.3 million of that loan, according to the Department of City Development.
Those funds were used to help pay for buying the property, as well as interior demolition, asbestos removal and architectural fees, said department spokesman Jeff Fleming.
No additional city funds will be provided until the overdue property tax bill is paid, he said.
Additional financing sources include an expected $13.5 million from private investors drawn by the development’s location in an Opportunity Zone — providing big federal tax breaks.
Other financing would include $7 million in federal and state historic preservation tax credits, $3 million in Property Assessed Clean Energy financing, a $2 million private loan and Haywood’s $1.83 million deferred developer’s fee.
A woman who says Haywood raped her has asked a court to take the sexual assault investigation away from the Milwaukee Police Department, arguing it has violated her constitutional rights as a crime victim.
Haywood has denied the allegations and has not been arrested or charged. The case remains under review at the Milwaukee County District Attorney’s Office.