Nordstrom Rack, Dick's Sporting Goods and Container Store could be among the tenants at a new retail center planned for the site of the old Roundy's property on W. Burleigh St. at Highway 45 in Wauwatosa.
No stores have been formally announced for the 69-acre site, known as the Burleigh Triangle, but a proposal for a multiuse project there will be submitted to the city on March 23, said developer Timothy Blum of HSA Commercial in Chicago, the owner of the site.
The entire development would eventually expand to over 1 million square feet.
This is the second major retail project announced for the Milwaukee metro area in as many weeks, following news of a 450,000-square-foot center that would be anchored by a Von Maur department store on W. Blue Mound Road in the Town of Brookfield.
The 250,000-square-foot retail portion of the HSA project is being compared to the developer's project at Orland Park Place in suburban Chicago. Orland Park has a Nordstrom Rack store and Dick's Sporting Goods, as well as other retailers who typically locate in open-air shopping centers rather than malls.
Nordstrom Rack is the discount arm of the Seattle-based upscale department store chain, and it is the division that Nordstrom has been expanding during the recession. The Rack stores have large shoe departments and an apparel offering of lower-priced clothing than is typically found in the Nordstrom department stores.
If the project is approved, HSA would like to break ground on the project this fall. The retail portion would be placed in the former distribution center, which fronts Highway 45. Blum plans to chop off the front quarter of the building facing the highway and create a new retail facade. Parking would be in front of the building, along the freeway.
The design gives the center visibility to the freeway, Blum said. The so-called Burleigh Triangle is bounded by Highway 45 to the west, Burleigh on the south and the Union Pacific Railroad to the east.
"This is a creative way to get things started now, to clean up the ugly warehouses and to tap into what little demand there is for development," he said.
HSA plans to market the site to best-in-class soft goods, electronics and furniture retailers that would be new to the Milwaukee area, Blum said.
"We are very complementary to Mayfair mall and would help strengthen that entire Mayfair corridor," Blum said.
Former warehouses
In July 2007, HSA Commercial bought Roundy's Supermarkets Inc.'s former warehouse properties, totaling 39 acres, for $8.5 million. One month later, the firm bought the nearby former warehouses for Kohl's Food Stores Inc., a 24-acre site east of the Roundy's site, for $9 million.
Both Roundy's, which operates the Pick 'n Save supermarket chain, and the now-defunct Kohl's Food Stores stopped using the warehouses several years ago. A 6-acre warehouse property, operated by Total Logistic Control, remains in the area.
A city redevelopment plan for the entire Burleigh Triangle envisions condominiums overlooking Currie Park along the property's eastern edge, along with offices and high-tech manufacturing - with many of those buildings along Highway 45. The plan also calls for retail space along W. Burleigh St. and a hotel.
HSA Commercial initially planned to demolish all of the former Roundy's and Kohl's buildings to create a development site, Blum said. But after the recession and near-collapse of the global financial services industry, "it was a new world," he said.
As a result, there's no demand for office or condo uses at the site, Blum said. And the only way retail use makes sense is by cutting costs so store and restaurant tenants can afford the rents that HSA Commercial would seek, he said. The firm is reducing its development costs by using portions of the existing former warehouses.
"I can't afford to build new construction. Nobody can," Blum said.
The proposed project works around Total Logistic Control's operation, he said. Blum also said the firm plans to eventually develop the former Kohl's site in future phases.
City backing
City officials and HSA Commercial representatives have discussed the possibility of city financing to help with the site's redevelopment, said Nancy Welch, community development director. No specific financing plan has been proposed, she said.
Cities often help pay for developments through tax incremental financing districts.
With a tax district, a city can borrow money and spend it on development projects. That debt is paid off over several years through property taxes generated by the new development. Once the debt is gone, those property taxes flow to the city, its schools and other local governments.
Two Wauwatosa aldermen who represent the district where the project is located expressed support for the project in a prepared statement.
"This development is expected to serve the people of Wauwatosa by supporting the city's long-range vision of creating a gateway to the Mayfair corridor and further enhancing the appeal of the area," said Craig Wilson.
"The initial development will be essential in creating jobs and boosting tax revenue for the community," said Jason Wilke.