$250,000 WEDC grant supports Sherman Phoenix
The redevelopment of a former BMO Harris Bank, one of six Sherman Park buildings burned in the unrest that followed the 2016 shooting of Sylville Smith by a Milwaukee police officer, has been awarded $250,000 by the Wisconsin Economic Development Corp.
The WEDC awarded Milwaukee County a Community Development Investment Grant to support the Sherman Phoenix development, which Lt. Gov. Rebecca Kleefisch and Milwaukee County Executive Chris Abele announced alongside the developers, Juli Kaufmann and JoAnne Sabir, at the development site Tuesday.
The Sherman Phoenix, 3536 W. Fond du Lac Ave., named to symbolize rebirth from ash, will provide affordable space for minority-owned businesses and is expected to open this fall.
Sabir, who will operate her own restaurant, to be named Shindig, out of the Phoenix, said 20 mostly black-owned businesses have signed on as tenants, and 10 business owners are on a waiting list to access the space.
In addition to Shindig, tenants include Funky Fresh Spring Rolls, Embody Yoga, Queens Closet Consignment Shop and Studio 69, a martial arts practice.
The building is roughly 20,000 square feet, but because of its architec-
ture, only about 10,000 of it is rentable, according to the Sherman Phoenix investor overview.
Kleefisch said the project is expected to create more than 75 jobs, “having entrepreneurship lead the way for economic success in Sherman Park.”
The $3.5 million project also received a $225,000 grant from the City of Milwaukee, which will be repaid through the building’s property taxes.
Kaufmann said her goal is to create a self-sustaining commercial development for the neighborhood. She acknowledged that because the hub is in a low-income ZIP code, there were initial gaps in funding.
To raise the remaining roughly $3 million, Kaufmann has had to employ less conventional methods, typical of her developments. Rather than rely on traditional funding models, Kaufmann tends to crowdfund her projects — the Phoenix included.
Crowdfunding relies on small contributions from a large volume of investors and donors, rather than large donations from only a few investors. Kaufmann said giving residents ownership of commerce in their neighborhoods is a catalyst for further change, particularly because she invests in “traditionally disinvested” commercial corridors.
“I’m not doing real estate, I’m developing communities,” Kaufmann said.
When Kaufmann crowdfunds, she asks community members to invest between $1,000 and $10,000 for an ownership stake in the business. Sherman Phoenix has 50 such investors, as well as three angel investors, including Milwaukee Bucks Senior Vice President Alex Lasry.
All of the equity in the project has been raised, Kaufmann said, and the final $1 million is expected to come from philanthropy.
Kaufmann emphasized the importance of local control and decision-making. Kaufmann said she tries to respond to what people in the neighborhood need, making sure the money is recirculated in the community.
Crowdfunding is a new trend in commercial real estate and poses challenges, Stewart Wangard, another Milwaukee developer, said.
“Crowdfunding has limitations with what you can raise,” Wangard said. “The return is a social return.”
That social return is exactly the point, according to Kaufmann.
“Most of my projects are in neighborhoods where traditional real estate does not come,” Kaufmann said. She said her projects have emerged out of self-interest and a desire to see change that traditional institutions were not providing.
“I have no interest in being a real estate developer,” Kaufmann said. “I got started because I was a frustrated resident.”
Her crowd-funded projects include: the Tandem restaurant, 1848 W. Fond Du Lac Ave., in Lindsay Heights, which has 45 community investors (a third of whom are neighborhood residents); The Freshwater Fix building, 205 S. 2nd St., which houses Purple Door Ice Cream and has 25 investors; and the in-progress Cream City Hostel, 500 E. Center St., which has 50 interested investors, half of whom have formally committed.
One of the Cream City Hostel owners, Wendy Mesich, said the model offers people who would not otherwise qualify to invest a chance to have a sense of ownership in their community.
“When (community members) feel some ownership, it’s better for everyone,” she said.
Sabir said the crowdfunding aspect is about cultivating relationships in the community, and she and Kaufmann hope the model is something future developers will replicate.
Joanna Brooks, owner of Embody Yoga and soon-to-be Sherman Phoenix tenant, said her interest in the project is “bigger than money.” Brooks said she felt a “heart connection” with the enterprise and the example it sets for young people in the community.
“The biggest things for us is knowing there are young people watching us,” Brooks said. “They will be able to see themselves reflected.”