City Hall needs a consistent, transparent and aggressive approach to spurring commercial development — including more public dollars to help finance apartments and other new projects. That's according to , who's publicly criticizing Mayor Cavalier Johnson's Department of City Development as it recommends a rival firm for "There's a lack of certainty because there is no process," Gokhman told the Milwaukee Journal Sentinel. "There is not a collaborative approach.
" Gokhman's comments are drawing support from others, including two key Common Council members: Ald. Robert Bauman, whose district includes downtown, and council President Jose Perez, whose district includes Walker's Point. That's where Gokhman's New Land Enterprises LLC is seeking city financing help for two apartment developments.
"The lack of consistency to put these deals together is a huge challenge," Perez said. Also, Johnson on Monday said he was directing Department of City Development staff to look at how the use of city financing for apartment developments can be expanded − which he said was the result of Gokhman's "direct feedback." Meanwhile, Development Commissioner Lafayette Crump defended his department's interactions with New Land and other development firms.
"I think the development community understands very well what our policies are and what the process is," Crump said. Gokhman, whose firm is one of the Milwaukee area's largest developers, took the unusual step of airing his grievances publicly as the department on July 24 was recommending Madison-based The Neutral Project LLC as the developer to replace the Marcus Performing Arts Center parking structure. That firm's $700 million conceptual plan calls for up to 750 residential units, 190,000 square feet of office space, 40,000 square feet of retail space, 300 hotel rooms, 1,100 structured parking spaces, and public plazas and walkways at the 2.
5-acre site, 1001 N. Water St., a department statement said.
The development would be capped by a 55-story apartment tower — Wisconsin's tallest building. Two other firms responded to the department's request for proposals to redevelop the city-owned site: New Land and The Richman Group, based in Greenwich, Connecticut. Richman Group's $231 million proposal calls for 106 market-rate apartments, 88 affordable apartments, 13,000 square feet of retail space and a 25,000-square-foot amenity area, Bauman said.
New Land's $350 million proposal includes 192 apartments, a 240-room hotel, 250,000 square feet of offices and 14,000 square feet of retail, he said. Gokhman said New Land's apartments would have rents affordable to people earning around 80% to 100% of Milwaukee County's median income. Under current federal guidelines, a single person at the 80% level is earning $57,200 annually.
Apartments which target such renters amount to "workforce housing," Gokhman said. Workforce housing rents are higher than those capped at below-market rates in apartment buildings financed with federal and state But they are below the rents in most newly built market rate apartment developments, Gokhman said. The city's for the Marcus Center parking structure site includes a call for providing affordable housing — with possible city financing help.
Meanwhile, New Land since September has been seeking city financing help for two Walker's Point apartment proposals: the , at 1000-1010 S. Fifth St., and the , at 412 and 418 S.
Fourth St. Both would feature workforce housing, Gokhman said. That focus is a new one for New Land.
The firm is mainly known for developing higher-end housing, such as downtown's , which opened in 2022 at 700 E. Kilbourn Ave. Around 25% of the apartments in New Land's portfolio amount to workforce housing, Gokhman said.
Those are older buildings that the firm has purchased. The need for more workforce housing is tied to both as well as the , such as Fiserv and Northwestern Mutual, from the suburbs to downtown, Gokhman said. Developer Bob Monnat agreed.
"There's just a lot of people who cannot afford luxury apartments," said Monnat, Mandel Group Inc. senior partner. "The city needs to look at market rate housing.
" Monnat, whose firm has developed hundreds of , said he's been talking with city officials about changing Milwaukee's policy on tax incremental financing districts. So-called TIF districts provide public funding from a new development’s property tax revenue and sometimes are used to help developers complete their financing packages. Milwaukee for several years has generally not used TIF districts to help finance market rate apartments.
Crump says department officials are considering TIF districts to help convert underused downtown office buildings to apartments, including workforce housing — used in Chicago, St. Paul and other cities. That could include the nearly-empty 100 East office tower, 100 E.
Wisconsin Ave., owned by a group led by Klein Development Inc. and John Vassallo, and the vacant former Marshall & Ilsley Bank building, 770 N.
Water St., owned by a group led by developer Mark Irgens. TIF districts could be used for other workforce housing developments, Crump said, including New Land's planned Walker's Point projects.
Crump said the department's nearly-year long evaluation of New Land's request for financing help in Walker's Point is extensive, and involves determining whether a financing proposal would receive Common Council support. "(Gokhman) has asked us to do something we've never done before," Crump said. Both Bauman and Perez said the city should consider using TIF districts to help finance workforce housing.
They say developing such buildings has become more difficult in recent years because of inflated construction costs and higher interest rates on construction loans. The Department of City Development could move faster and be "more creative" in its approach to TIF requests for workforce housing, Perez said. "I hope we will get there," said Perez, a department employee before being elected to the Common Council.
Bauman, while open to the idea, also said the issue is complicated. That includes evaluating whether a TIF district is truly needed to help a developer close a financing gap, he said. Meanwhile, The Neutral Project is considering a workforce housing component for its Marcus Center parking structure development proposal, said Chief Executive Officer Nate Helbach.
The number of workforce housing units would be among the issues discussed if the Common Council approves the Johnson administration's request for The Neutral Right to have a one-year exclusive right to negotiate a site purchase. Helbach praised Department of City Developments officials for their "constant communication" throughout the process of considering Marcus site proposals. He also complimented city officials for their review process of , a 32-story, 383-unit high-end tower which The Neutral Project plans for 1005 N.
Edison St., just west of the Marcus parking garage. Site preparation work is underway, and construction is to begin by late fall/early winter after two bank loan agreements are completed, Helbach said.
"Other cities don't have as clear a process to get approvals as the City of Milwaukee," he said. Bauman, however, doesn't currently support the Johnson administration's recommendation of Helbach's firm as the Marcus site developer. He cites delays in The Edison's start, and the firm's track record.
The Neutral Project has no completed developments, with two projects, including a 14-story apartment building, under construction in Madison. That led Bauman to introduce a Common Council resolution directing the Department of City Development to hire a consultant to analyze the feasibility of the three Marcus site proposals. The council could consider that resolution in September.
Crump said the department would use the proposed year-long negotiation period with The Neutral Project to conduct a more extensive feasibility study. He hopes the council approves that proposal this fall. Gokhman said his public criticism isn't an attempt to influence the council's actions regarding the Marcus site, and said New Land withdrew its proposal.
Instead, he's trying to spur changes to City Hall's development strategy. "The goal is to get policies in place and change the thinking inside DCD," Gokhman said. "There is talk of collaboration.
But there isn't action." Gokhman said the Department of City Development's review of Marcus site proposals included a failure to meet a May 31 deadline of recommending a proposal, and ignoring the need for affordable housing. In a series of posts on X, formerly known as Twitter, and in an interview with the Milwaukee Business Journal, Gokhman also criticized the department on other attempts to attract development to city-owned sites.
That includes a large parking lot at 401 W. Wisconsin Ave. — part of which houses the recently opened The department for the rest of that parking lot — which the city has targeted for development Crump told the Journal Sentinel there was no May 31 deadline.
Instead, department officials asked New Land and the other developers if they'd be ready to proceed by that date, he said. As for concerns about The Neutral Project, Crump said a development firm's track record is among several criteria used to judge the proposals. Other criteria include maximizing the property tax base, encouraging a high level of pedestrian activity, creating new parking for the Marcus Center, and creating a landmark development with a mix of uses.
Also, the department's request for proposals at the Marcus site encourages an affordable housing component — but doesn't require it, Crump said. He noted The Neutral Project's plans to provide some of the apartments as workforce housing. "We are in complete agreement with the development community that it's appropriate for the city to play a role to ensure we have a development that brings more housing for hard-working Milwaukeeans," Crump said.
Meanwhile, Gokhman hopes city officials will listen to his critique — and that other developers speak out. "There's no way to grow the city without change," he said..
