Another Couture delay looms — due to City Hall conflict
Contract calls to replace unspent federal money
Another delay might be looming for the Couture high-rise construction start — this time because of a conflict at City Hall.
The issue centers on a contract between Couture developer Barrett Lo Visionary Development LLC and the City of Milwaukee which the Common Council
approved on March 2.
It was updated to require Barrett Lo owners Richard Barrett and Tan Lo to personally guarantee a $1.4 million payment to the city if the Couture’s groundlevel transit hub isn’t finished by June 2022.
Mayor Tom Barrett’s administration said that provision was needed because a federal grant used to help finance The Hop streetcar’s lakefront loop requires all the money be spent by July 31, 2022.
Around $1.4 million for The Couture’s transit concourse, which would complete the lakefront loop, remains unspent because of the apartment tower’s construction start delays.
The updated contract, known as a development agreement, also included a requirement that Barrett Lo provide $100,000 to the MKE United AntiDisplacement Fund. The private fund helps low-income homeowners who face big property tax increases.
The council voted to include that under an amendment proposed by Ald. Robert Bauman.
That provision has led City Attorney Tearman Spencer to refuse to sign the contract.
In Spencer’s opinion, the contract is problematic because individual council members do not have the authority under city ordinance to negotiate development agreements.
Spencer’s opinion doesn’t carry the force of law.
But his refusal to sign the development agreement could bring another delay to the long-stalled Couture, a 44story, 322-unit development planned for 909 E. Michigan St.
In an opinion issued to the Common Council, Spencer said the development agreement is void without his authorization.
Bauman, who’s also an attorney, said Spencer actually is required to sign the development agreement.
Also, Bauman said, Spencer is mistaken that city ordinance requires his approval on the development agreement.
The ordinance Spencer cites in his opinion only applies to the purchase and sale of real estate, Bauman said.
Spencer said the council could vote again on the development agreement without the provision that triggered his objection.
Or, the council could vote to authorize Bauman’s actions which led to that provision, Spencer said.
Bauman said Tuesday another vote isn’t planned when the council next meets on March 23.
“We voted. We approved the development agreement,” Bauman said. “The city attorney did not appear at committee to object or otherwise object prior to our final approval.”
The provision requiring Barrett Lo to make the donation was opposed by Mayor Barrett.
He said there should instead be a transparent and consistent policy involving payments by developers to the anti-displacement fund.
As a result, Barrett refused to sign the council resolution which approved the development agreement, But the legislation doesn’t need the mayor’s signature to become law.
Neither the mayor’s office, nor Barrett Lo, had any immediate comment Tuesday on the possible project delay.
The U.S. Department of Housing and Urban Development in November agreed to insure a $103.5 million loan to build the Couture.
That loan from JLL Real Estate Capital, combined with equity financing raised from outside investors, means the $188 million project can proceed with the city development agreement approved, and the financing package officially completed.
With construction to start this spring, The Couture is to begin opening apartments by around May 2023, with completion by August 2023.
The Couture’s 2.2-acre project site was sold in 2016 to the developers by Milwaukee County for $500,000. That below-market price was used to help ensure the project’s feasibility.
Also, the council and Mayor Barrett have approved two separate measures for city financing tied to the Couture.
The largest portion is $17.5 million to pay for the Couture’s public improvements — including the transit concourse. Also, $2 million will pay for a new sewer line at the project site.
Those funds will be repaid through the Couture’s property taxes.