The developer of downtown Milwaukee’s Couture high-rise said it won’t meet a deadline for a federal loan guarantee to finance the project, in another delay for the long-awaited tower.
Barrett Lo Visionary announced that the firm wouldn’t meet a Friday deadline for a loan guarantee from the U.S. Department of Housing and Urban Development to finance the 44-story luxury tower overlooking Lake Michigan. Instead, the development firm said it is seeking more investors for the project and intends to submit a fast-tracked loan application in the future. The project could have received an $80 million loan guaranteed by the agency for the $122 million project.
The developer has sought multiple extensions for filing an application to receive a HUD loan guarantee after announcing late last year that it had secured preliminary approval for the project from the agency. The Couture project, which is slated to be built on a lot at the corner of East Michigan Street and Lincoln Memorial Drive in Milwaukee, would include a first-floor transit hub to host an extension of Milwaukee’s streetcar. The component must be operational by the end of 2020 to spare Milwaukee County from $6.7 million in federal penalties.
In a statement, developer Rick Barrett said the project needs additional investors, and that he was working with an unnamed investment bank to finance the project.
“We have had positive conversations with the bank about potential investors. We look forward to working with them to advance this transformational project for Milwaukee’s lakefront,” according to Barrett’s statement. “As part of that process, we will voluntarily let the HUD application extension expire. Once we complete the capital stack, we will resubmit an application through HUD’s Direct-to-Firm Program, which provides for a shortened review timeframe.”
A HUD spokesperson did not return a message seeking comment by press time Friday.
After announcing in November that it had secured HUD’s preliminary approval for the project, Barrett Lo has sought numerous extensions for filing a final loan application. The developer pushed back a deadline in late January to May, and again sought an extension that ended Friday.
Barrett’s announcement that the firm will miss its Friday deadline is another setback for the long-contemplated project. The developer in 2012 first announced plans to develop the property, but was mired in legal battles for years to win the right to build on the site.
The Couture high-rise project carries risk for Milwaukee County, which received a federal grant in the 1980s to build a transit center at the high-rise site. Milwaukee County sold the land to the developer for $500,000 — a steep discount — to aid the project’s development, and Barrett tore down the former bus terminal in 2017. But terms of the original grant still stipulate that the property must serve as a transportation hub.
If the property doesn’t have an operational streetcar hub and rapid-transit bus service as-planned by the end of 2020, Milwaukee County could face $6.7 million in federal penalties. The city of Milwaukee delayed the start of the streetcar’s lakefront line by a year to accommodate the Couture project, though track has already been laid for that route.
The city of Milwaukee has also committed $17.5 million in tax incentives to support construction of the transit hub. The project is expected to create hundreds of construction jobs after it breaks ground.Follow @natebeck9