Tom Daykin

Milwaukee Journal Sentinel

Downtown Milwaukee's massive postal facility would be redeveloped into offices and retail space under conceptual long-term plans being pitched by the building's new owner.

The 1.1 million-square-foot building, 341 W. St. Paul Ave., would undergo a dramatic makeover. That could eventually include two newly built towers at either end of the property, overlooking N. 6th St. and at N. 2nd St., that would be used for offices and housing.

However, those towers are largely meant to show the site's potential, said Matt Garrison, managing principal at building owner R2 Companies, a Chicago-based firm.

Most of Garrison's focus is on the U.S. Postal Service's four-story processing facility, which runs between N. 5th and N. 2nd streets.

R2's conceptual plans would convert the building from what is now a light industrial use into roughly 200,000 square feet of stores and restaurants on the first and second floors, 500 parking spaces on the third floor and around 100,000 square feet of offices on the fourth floor.

That conversion would cost more than $100 million, Garrison said.

Conceptual renderings show a glassy, brightly lit complex that includes a pedestrian bridge spanning the Menomonee River to the Harley-Davidson Museum grounds, boat slips, a kayak launch, a public RiverWalk, an entrance into the development's parking structure from the 6th St. viaduct and a green roof.

GRAPHIC: Post Office Proposal

Chicago-based R2 Companies and Polsky Holdings, which bought the property in October 2015 for $13 million, would need anchor office and retail tenants in order to obtain financing for the ambitious plan.

R2 and Polsky would compete with other downtown office developers, including the new owners of the Grand Avenue. The Grand Avenue owners announced plans in April to seek an anchor tenant to help convert much of that underused shopping center into offices totaling around 120,000 square feet.

Also, while Garrison hopes to begin the project sooner rather than later, the Postal Service has a lease that runs until at least 2020. The agency has renewal options that could extend that expiration date for several years.

The agency in 2009 bought 64 acres at E. College and S. Pennsylvania avenues, in Oak Creek, to build a more efficient mail processing facility. But that project has been on an indefinite hold with the Postal Service facing declining revenues.

The Postal Service has no updates on its possible plans for the Oak Creek site, said Sean Hargadon, the agency's district spokesman.

R2's conceptual plans, drafted by San Francisco-based design firm Gensler, are designed to present the firm's vision for the site, Garrison said, and help attract interest from prospective tenants.

Gensler's portfolio includes converting a bunker-like former Sears department store, in downtown Oakland, into corporate offices for ride-sharing service Uber. That project, known as Uptown Station, is a model for the Grand Avenue's planned redevelopment.

While the Milwaukee building is now seen as a "dead zone," Garrison said the property has a strong location.

He cited its riverfront access and its ties to both the nearby freeway system and mass transit. Along with Amtrak and intercity bus lines, the neighboring Milwaukee Intermodal Station also will be a stop for the future downtown streetcar service.

"The location is a hub," Garrison said.

The conceptual proposal reflects an exciting vision and does a good job of connecting the property to downtown and the Menomonee Valley, said city Development Commissioner Rocky Marcoux.

"I love it," Marcoux said.