The Marshall Field’s Condominiums?
The name is speculative. But plans for converting at least part of the soon-to-be vacated home of the downtown Milwaukee Marshall Field’s to residential use are serious, said developers Richard Leep and John Raettig.
“We think the Marshall Field’s building can be a success,” Raettig said.
Marshall Field’s spokeswoman Lynn Galia said the building would be listed for sale at an undisclosed price. She said the company received inquiries about the building after the recent announcement that corporate parent Dayton Hudson Corp. would close the Marshall Field’s store at the Grand Avenue retail center Sept. 6.
“We’d like to take care of selling the property as soon as possible,” Galia said.
The building’s two lower floors, which connect to the street and Grand Avenue’s second level, would likely remain as retail space, say real estate sources.
Mark Brickman, president of Polacheck Co. real estate brokerage, said larger “category killer” tenants might be good candidates to fill the space.
Those types of stores, such as OfficeMax and Home Depot, typically use at least 20,000 square feet and specialize in one category of goods, such as office supplies or home improvement goods.
Some speculation centered on Kohl’s Corp., a rapidly expanding department store operator based in Menomonee Falls, Wis.
A company spokesman said Kohl’s probably wouldn’t be interested in the Field’s building, which has 600,000 square feet on eight floors. Kohl’s operates in suburban locations and typically uses about 80,000 square feet.
Meanwhile, the upper floors of the Marshall Field’s building could be ripe for conversion to either residential or office space.
Leep and Raettig, who have converted other older buildings into condos and apartments, first toured the Marshall Field’s building in 1996 with Milwaukee Mayor John Norquist.
They have since submitted a proposal that called for buying the top four floors of the building at fair market value, an amount they declined to specify.
The entire building has a fair market value of about $6 million, according to assessment records.
Leep and Raettig said they have proposed renovating the top four floors without any city financial assistance and said they would donate a portion of development profits to local charities.
Word of the developers’ interest in the building leaked out in January. That’s when Dayton Hudson announced plans to sell the entire building to an undisclosed party and lease back part of the building just for the department store. The building’s remaining space, now largely vacant, would have been developed for other uses.
Dayton Hudson’s announcement that it would close Marshall Field’s came after the company was unable to reach a sale agreement for the building.
In the wake of that announcement, Leep and Raettig were reluctant to provide more specific information, partly because of competitive reasons and partly because they need more information about the building.
That additional information would include the results of an extensive engineering and environmental inspection, which would help determine renovation costs. Leep and Raettig also would need to do market research to determine whether condos or apartments would be best.
To do those things, Leep and Raettig said, they need access to the building.
To secure access, they would probably need to negotiate a sale agreement with Dayton Hudson, including an option on the property. Securing that option would likely require Leep and Raettig to line up a preliminary financing source to show Dayton Hudson that the developers are credible.
Leep declined to comment on whether he and Raettig would seek to negotiate an option agreement with Dayton Hudson.
Leep and Raettig have done these types of renovations, albeit on a much smaller scale.
Their projects include the current conversion of the upper floors of Milwaukee’s Cawker Building, 108 W. Wells St., into 19 condominiums. In 1996, they converted former tannery offices and storage space into Gallun Tannery Row, a loft-style apartment building with 26 units at 1818 N. Water St.
In both cases, Leep and Raettig did the projects without any public financial assistance, which makes them unusual among downtown housing developers in Milwaukee.
They also did the projects at low cost by providing just the basics: heated living units with plumbing and electrical fixtures. Interior walls and other design features were left for the apartment renters and the condo buyers to finish to their specifications.
Another trait of Leep and Raettig’s developments is their flexible approach. They typically advertise their buildings’ availability for residential use by displaying banners, and then tailor their development plans based on the response.
In some cases, the response is lukewarm, and nothing happens.
That occurred earlier this year, when Leep and Raettig tested the waters for possible residential use of Milwaukee’s former Woolworth Co. building at Grand Avenue. Leep said the building’s location, at 275 W. Wisconsin Ave., played a role in the unenthusiastic response.
The Riverwalk runs along the Marshall Field’s building, which improves its prospects as a residential development, Leep and Raettig said.
Other favorable characteristics of the building include its location in the heart of downtown, and its design.
Another possible use for the upper floors of the Marshall Field’s building would be office space. Towne Realty Inc. announced it would be willing to revise its 1989 plans to buy the building and convert the non-retail space to offices.
“We’re optimistic that a suitable, and hopefully superior, replacement (for Marshall Field’s) can and will be found if it becomes necessary,” said Towne spokesman Michael Mervis. Towne owns several downtown office buildings and is developing a new 110,000-square-foot corporate headquarters building for United Health Inc. at 111 W. Michigan St.
Towne’s 1989 plans called for leasing two to four floors to Marshall Field’s and leasing the remaining space to office tenants. That deal was reached with Batus Inc., which then owned Marshall Field’s.
The deal was killed after Dayton Hudson bought Marshall Field’s from Batus in 1990.
One real estate source said the deal was killed because accounting rules would have required Dayton Hudson to post a loss on the building’s sale. The source said Dayton Hudson probably has since written off much of the building’s value as an asset.
That lower value might make the company more willing to accept a lower purchase price for the building, the source said, because a sale wouldn’t result in a loss for the company.
