Wauwatosa tower development worth $50 million halted, developer opts for car wash instead

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Wauwatosa’s plan for a 28-story, $50 million apartment and office tower was halted after developer John Vassallo announced on Monday plans for a car wash instead.

The proposed 80,000-square-foot Drew Tower was slated to be constructed on the corner of West Bluemound and North Mayfair roads. The building would have featured a glass and steel façade designed by Milwaukee-based architecture firm Kahler Slater. Plans were scaled back from 354 apartment units to 65 units as the tower faced neighborhood opposition. It was also the focus of a lawsuit claiming the city didn’t follow its own public input rules.

Vassallo said on Monday lending interest rates over the past year have been higher, where standard rates started from 3.5% when he announced plans in 2020 to more than 6% in late 2022.

“We had a once-in-a-century opportunity to build something spectacular at market rate, but it can’t happen now,” Vassallo said. “Maybe if you go back and do it with (tax increment financing,) but you can’t go back.”

Vassallo will instead build a Tommy’s Express Car Wash on the lot, which is worth 10% of the $50 million apartment’s projected value. He said he was already approved for the franchise and will go through the city’s permit process to build the car wash.

Cost for building construction were up by 20% and higher interest rates have been a culprit for projects in 2022. The Federal Reserve Economic Data’s bank prime loan rate was 3.25 in 2020, when Vassallo first submitted his building plans to city officials. The rate was 7.75 on Thursday, the data showed.

Vassallo’s initial plans were for a 25-story, 354-unit market rate apartment complex. Over time, pushback from residents caused the project to be scaled down to 65 units.