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Strip club owner ups ante for downtown Milwaukee site

Milwaukee is trying to decide who will rent its long-vacant property, shown Wednesday, at 1118 N. Fourth St. Jon Ferraro wants to rent the space to run a strip club. Alderman Robert Bauman, chairman of the city’s Public Works Committee, is proposing giving the Department of City Development a second deadline extension to solicit lease proposals for the site. (Staff photo by Kevin Harnack)

Milwaukee is trying to decide who will rent its long-vacant property, shown Wednesday, at 1118 N. Fourth St. Jon Ferraro wants to rent the space to run a strip club. Alderman Robert Bauman, chairman of the city’s Public Works Committee, is proposing giving the Department of City Development a second deadline extension to solicit lease proposals for the site. (Staff photos by Kevin Harnack)

Strip-club owner Jon Ferraro has sweetened his offer to rent vacant commercial space in downtown Milwaukee, but that still might not be enough to persuade the city to become his landlord.

The city sought lease proposals in the fall for commercial space in a parking garage at 1118 N. Fourth St., across the street from the BMO Harris Bradley Center. Ferraro was one of two to respond, and he proposed operating a strip club called Silk Exotic Gentlemen’s Club at the site.

In December, Rocky Marcoux, commissioner of Milwaukee’s Department of City Development, said Ferraro’s proposal was the more lucrative. But during a presentation of the two options to the Common Council’s Public Works Committee, Marcoux said he was not sure the city should be landlord to a strip club.

Ferraro, who owns clubs in Milwaukee, Middleton and Juneau, had proposed a 10-year lease with four renewal options for the downtown space. His proposal included rent at $14.27 per square foot and an investment by him of $1.16 million for renovations.

The city’s other offer, which was from Wilmington, Del.-based United Broadcasting Group Inc., was for less money. UBG’s proposal, which included rent at $7.20 per square foot and $350,000 in renovations, was to open a restaurant and radio station in the space.

Rather than force the DCD to choose between those options, the Common Council voted to extend the application period by 60 days. But the city did not formally refuse to rent the space to Ferraro.

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That extension ran out in early March. Ferraro, during that time, revised his proposal to include a 30-year lease with an option to buy the space after five years. His proposed rent and renovation investment are unchanged.

But Alderman Robert Bauman, chairman of the Public Works Committee, now has proposed giving the DCD an additional, unspecified amount of time to attract a tenant. The committee is expected to vote Wednesday on the second extension.

Jeff Fleming, DCD spokesman, said the department has not requested a specific amount of time. He said the city received other lease proposals during the first extension, but he would not say what those proposals are.

Bauman and three of the other four members of the Public Works Committee did not immediately respond to requests for comment Thursday.

Alderman Jim Bohl, a committee member, said he did not know how much extra time will be offered to DCD.

But, he said, he doubts Ferraro will ever lease that space.

“It is just too problematic,” he said.

Neighbors of the site have expressed concerns of a strip club opening in the parking garage, he said, and the city is weighing those heavily.

“I think because the city government is the landlord here,” Bohl said, “that you find us being very sensitive to those objections.”

Strip1Ferraro could not be immediately reached by phone Wednesday. According to an email sent Wednesday and attributed to Ferraro, he is frustrated over the city’s failure to respond to his proposals.

Jeff Scott Olson, Ferraro’s attorney, said his client could sue the city but chose not to during the city’s first extension.

“We’ve been hoping the problem would be solved,” he said, “through means other than litigation.”

But, Olson said, he does not know when Ferraro will lose patience and file a lawsuit.

Olson also represents Ferraro in a pending federal lawsuit against the city. That lawsuit was filed in 2010 after the city denied Ferraro’s application to open a club on Old World Third Street and repealed a theater ordinance Ferraro claims would have let him operate an alcohol-free club.

Taking even more time to find a tenant, Olson said, suggests Milwaukee did not receive a proposal that trumped Ferraro’s.

“Apparently, the city is willing to do anything it can,” Olson said, “to rent that property to anyone else in the world.”

About Beth Kevit

Beth Kevit is the Milwaukee city beat reporter and also covers real estate. She can be reached at beth.kevit@dailyreporter.com or 414-225-1820.

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