On Monday, the Milwaukee city plan commission tabled a development proposal for a Midtown Center site that has been vacant for over 10 years. The proposal includes affordable housing, a library, and a “data processing" facility which opponents say should be called a data center.
This likely means the plan commission will take this back up later this month, cutting close to a July 31 deadline needed to receive tax credits for the affordable housing.
Addison Lathers is a reporter for the Milwaukee Business Journal covering real estate and economic development. She joins Lake Effect’s Sam Woods to discuss the proposal and its pushback.
This conversation has been edited for length and clarity.
Lake Effect’s Sam Woods: What is in this most recent proposal, and what are those points of contention?
Addison Lathers: We have affordable apartments being built by housing developer Gorman and Co. in the parking lot. The city would set up a new library branch, and there's potential for a senior center and even another gym down the road. And tucked into the back of the Walmart, we have a 19,000 square foot data processing facility, or computer research lab, however you want to refer to that.
Yeah, and what we're calling what happens on that 19,000 square feet does seem to matter for getting this project approved. So is it a data center?
That's a hard question. But we know what it is and we know what it isn't. This isn't a hyperscale data center. Those need acres upon acres of land. This facility is measured in square feet. It's the size of a church, maybe a small retail strip center. And we know what similar data processing facilities are, and Milwaukee is home to plenty of them. Potawatomi has one. The Milwaukee School of Engineering has one, and that one's just 70 feet away from apartments. There's a handful of them in office buildings downtown. They walk among us, if you will.
The developer said the facility is similar to these, separate in cooling processes, but it would not be something we don't already have right now in Milwaukee. It's only using about five gallons of water a day, we're told. It wouldn't require a substation upgrade. It would consume a similar level of power to the former Walmart. City planners say the facility's level of energy usage wouldn't result in costs being offset by residents. Those are all things we've seen in Port Washington and Mount Pleasant. These are just the realities of a large Microsoft data center, but these are not the realities of what's being proposed here.
So Addison, this might be a dumb question, but if the data center/data processing portion of this proposal is the hangup, why can't you just scrap that part. It's a small part of the land use anyway, just do everything else and find some other way to use that about 20,000 square feet. Why isn't it that easy?
Big Box is not doing great. It's not going to be easy to find a user for 160,000 square feet that was a former Walmart - that's tricky. Can it be a giant trampoline park? Maybe, but does a giant trampoline park user want to be there? Probably not, because they're not there right now. What we do know is that Affordable Family Storage wants to potentially lease this proposed library to the city for a dollar. They want to sell the land for the affordable apartments to Gorman and Co. for a dollar. So when you ask yourself what kind of low-margin, high-profit endeavors would make these deals possible, it makes sense that it's storage and data processing. Those are things that can work anywhere, they do not require a lot of foot traffic. It's a difficult place to be, but it's what makes sense.
The City Plan Commission tabled an approval decision for this proposal until next month. So what comes next?
What happens next is that at the end of July, the Plan Commission will come back together and maybe have a better idea of what they want to see. Hopefully that doesn't take seven hours, and hopefully they can get it together at that meeting because we are approaching a sort-of deadline for this project.
Gorman and Co., who we talked about building those apartments, would fund that project in part by housing tax credits. Those were already awarded by the state last year for phase one, and those tax credits have deadlines, use them or lose them. So their deadline is July 31. The city's own director of development, Lafayette Crump, said at the meeting that if the Plan Commission doesn't approve the deviation at its next meeting, as well as a separate approval for changes to the Walmart site itself, that project could be in peril or at the very least, subject to a costly extension process. You know, affordable housing, it doesn't have big margins.
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