Century City building on Milwaukee's north side is still empty, but hopes remain for its future

Four years ago, Mayor Tom Barrett's "state of the city" speech included news that an industrial building would be developed at Century City Business Park on Milwaukee's north side.

Today, as Barrett prepares for this year's annual speech, that building — designed to help jump-start a business park at the former A.O. Smith Corp./Tower Automotive Inc. complex — remains empty.

City officials and others say they're optimistic about the future of the building, which was completed in January 2016. But the development, which includes city financing, has faced challenges, including neighborhood crime and poverty.

"As bad as it's been, and the fact that the building is empty two years later, I'm more optimistic now than I've ever been," said Linda Gorens-Levey, a partner at building developer General Capital Group.

"I think we're close," said Rocky Marcoux, city development commissioner. "We've worked with a number of prospects that look promising."

The 53,200-square-foot building, south of W. Capitol Drive on the west side of N. 31st St., is called Century City I. It's part of Century City Business Park.

The city Redevelopment Authority created the business park by buying several dilapidated former A.O. Smith/Tower Automotive buildings and demolishing them. The authority sold part of the site to an investors group affiliated with General Capital.

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So far, no additional lot sales have occurred at the business park's remaining 45 acres, bordered mainly by W. Capitol Drive, W. Townsend St., railroad tracks, W. Hopkins St. and N. 27th St.

However, one of the former A.O. Smith buildings owned by the city, north of W. Townsend St. and west of N. 27th St., is leased to Spanish passenger rail manufacturer Talgo. The company's rail car overhaul facility has nine employees and expects to have 25 workers by mid-year, said Nora Friend, vice president of public affairs and business development for Talgo.

Century City I has seen prospective tenants since its marketing started in 2015 while the building was still under construction, but no leases have yet been signed.

That's due in part because city officials and General Capital executives don't want a distribution center, which could potentially use the entire building but employ just a handful of people. That restricts the building's prospects largely to manufacturers.

"This was always about economic development," Gorens-Levey said. "This was always about job creation."

"We can be patient," Marcoux said.

Also, some industrial companies might avoid the building because it's not close to an interstate highway interchange, said James T. Barry III, president of The Barry Co. commercial real estate brokerage.

Century City I is 1.5 miles west of the I-43/Capitol Drive interchange.

By contrast, the Menomonee Valley Industrial Center, a successful business park developed by the city, is virtually adjacent to the I-94/Miller Park Way interchange.

Finally, the neighborhood next to Century City is marked by poverty and crime, said Cheryl Blue, executive director of the 30th Street Industrial Corridor Corp., a nonprofit neighborhood improvement group.

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Those challenges can be overcome, Blue and others said.

The location, despite its problems, has some positive aspects.

That includes easy access, including from Milwaukee County Transit System bus lines, to people eager to work, said broker Brian Parrish, president of Paradigm Real Estate Corp.

"I think it's a big misconception that we don't have a good workforce there," Marcoux said. "We do."

Also, the building itself is well-designed, Parrish and Barry said.

Its features include 24-foot clear ceiling heights, full-depth loading docks and columns spaced to maximize space flexibility, according to listing broker Colliers Co.

"It's probably the nicest industrial building in its neighborhood by far," Barry said.

There are new efforts to improve Century City's neighborhood.

Blue's group, which she's led since mid-2016, has changed its focus to working with business operators and residents.

The group's strategies include supporting existing small businesses while attracting new ones, Blue said, while also encouraging more renters to buy homes.

Its work also features quarterly neighborhood cleanups, promoting biking and walking, and creating new block clubs.

There's more interest from businesses in investing throughout Milwaukee's central city, including the neighborhood near Century City, Blue and Gorens-Levey said.

Both said they're optimistic about Century City's future.

There's been increased interest from prospective tenants over the past six months or so, Gorens-Levey said.

"I feel good right now," she said.

Milwaukee taxpayers have a direct interest in the building's future.

General Capital financed the development with a $3.5 million loan from Milwaukee Economic Development Corp., a nonprofit business lender.

Additional financing included $400,000 ownership stakes from both Michael Weiss, General Capital's president, and the city.

The city funds, approved in 2015 by the Common Council and Barrett, were raised by selling federal New Markets Tax Credits to investors and didn't include any property tax revenue.

The public has a much larger stake in Century City Business Park.

Barrett and the council in 2009 approved a $35 million redevelopment plan for the former A.O. Smith/Tower site, including state and federal funds totaling more than $9 million.

That money has paid for acquiring the property, demolishing several buildings, doing environmental cleanup work and building new roads, sewers and other public improvements.

Of the $25.6 million in city funds, $15.6 million is to be repaid by 2035 through property taxes generated by development at Century City and by selling the business park's parcels.

The city expects the business park to eventually host companies with an estimated 900 employees.

But the jump-start expected from the Century City I building hasn't happened yet.

There have been high hopes that the business park would benefit from Milwaukee-based REV Group Inc.'s bid to land a $6.3 billion U.S. Postal Service contract to build the next generation of mail delivery trucks.

That Century City manufacturing complex would have around 1,000 employees, according to REV Group.

Tim Sullivan, president and chief executive officer, said in 2016 that the company was seeking the Postal Service contract in a partnership with Turkish commercial vehicle manufacturer Karsan Otomotiv.

But Karsan Otomotiv in October announced an agreement to partner exclusively with Sturgis, Mich.-based Morgan Olson LLC in connection with the Postal Service bid, according to a Reuters.com report.

Sandy Bugbee, REV vice president of investor relations, declined to comment on that report. An email inquiry to Karsan's U.S. office went unanswered.

Barry said he hopes Century City I succeeds, saying it would be "a great validation for companies doing business in that area."

But he worries that it might go the same route as the North Avenue Commerce Center, a pair of light industrial buildings developed with city subsidies at W. North Ave. and N. 27th St. during the 1990s.

Those buildings had trouble attracting industrial firms and ended up with such tenants as a Family Dollar Store and Hope Christian School.

"It was a disappointment," Barry said.

Tom Daykin can be emailed at tdaykin@jrn.com, and followed on Twitter and Facebook.