Milwaukee’s Loyalty Building developer commits to preservation (UPDATE)

Developers plan to covert the 124-year-old Loyalty Building, 611 N. Broadway St., Milwaukee, into a hotel. (Staff photos by Kevin Harnack)

By Marie Rohde

Another developer is working on another hotel in another historic building on the east side of downtown Milwaukee, but without the controversy swirling around the proposed Marriott Hotel.

First Hospitality Group Inc., Rosemont, Ill., expects to close the deal sometime this summer to convert the Loyalty Building, a six-story commercial building at 611 N. Broadway St., into a hotel, said James Stephenson, the firm’s vice president for facilities. He said the project should be completed within a year of approval.

“It’s a beautiful building and on the National Historic Registry,” he said. “We’re very tuned in to maintaining the structure and the facade.”

Two blocks away at East Wisconsin Avenue and North Milwaukee Street, the developer of the new Marriott plans to raze five historic buildings and build anew. Jackson Street Management LLC, Milwaukee, will re-create a portion of the facade for the $50 million hotel, a controversial decision that irked some preservationists.

Paul Jakubovich, the city’s preservation officer, said First Hospitality representatives met with several city officials in fall to discuss how to save the best of the past and still create a building for the future.

“We’re very much in favor of what they are planning,” he said. “I have not heard a word of concern or dissent.”

Skylights stand above the atrium inside the Loyalty Building. Developers say it will take about a year to complete.

The Milwaukee Common Council approved the Marriott proposal earlier this month after accusations that members of the Historic Preservation Commission were delaying a project that would bring needed redevelopment, jobs and taxes to downtown.

Nik Kovac, one of two aldermen to oppose the Marriott plan, argued the Marriott proposal raced through the city approval process.

Stephenson said his group is still trying to determine how many rooms can be carved from the 91,996-square-foot building. The renovation cost has not been determined nor has a sale price for the building, which is owned by Stonewater Historic Milwaukee LLC.

Stephenson declined to discuss financing for the Loyalty Building but said federal and state tax credits are an attractive incentive.

The tax credits amount to 25 percent of the cost of the renovation work, Jakubovich said.

The First Hospitality hotel would be the second in Wisconsin for the company, which also developed the Radisson Hotel and Conference Center in Pleasant Prairie. First Hospitality owns 39 hotels in the Midwest, and two — the Hampton Inn in Chicago and the Hilton Garden Inn in downtown Indianapolis — were converted or restored.

The architecture and construction of the Loyalty Building appealed to First Hospitality, Stephenson said.

“The standard of construction is something you cannot replicate,” he said. “Not every building is appropriate for renovation and there are often challenges, but this is a great building.”

The Loyalty Building was built in 1886, Jakubovich said. The six-story granite Romanesque Revival building was the second home of Northwestern Mutual Life Insurance Co., the forerunner to Northwestern Mutual Investment Services LLC, he said.

The building is on the site of Newhall House, a hotel that burned to the ground in 1883, killing an estimated 90 people. For decades, it was the most deadly hotel fire in the nation, Jakubovich said, adding that it was the impetus for modern building codes and the quest for fireproof buildings across the country.

“In its day, it was one of the first fireproof buildings in the country,” said Jakubovich of the Loyalty Building. “It is solid granite with vaults on every floor.”

Stephenson said the decision to build the 200-room Marriott so close to his project will have no effect on First Hospitality’s plans for the Loyalty Building.

“We have done our market research,” he said, ìand we are very satisfied that the business is there and that the market is right.”