Photo by Adam Ryan Morris
Barry Mandel was 54 and had not swum competitively since high school. But he had just accepted a challenge from Rich Lynch, a former co-captain of the UW-Madison swim team – a race.
The wry offer came after a marathon negotiation over $1.7 million in contested costs for the 37-story University Club Tower that Mandel was developing. J.H. Findorff & Son was the construction company hired for the job, and Lynch, its president, had been haggling with Mandel over changes he’d ordered and which company should pay the costs. After six hours of negotiations, they were still $25,000 apart.
Rather than settle the dispute in court, Mandel and Lynch agreed to swim a 100-meter race, with $25,000 going to the victor. Mandel would later learn about Lynch’s days as a college racer, but he refused to back down.
Instead, he hired Olympic swimmer Adam Mania as a trainer. Mandel was 36 years past his peak form as a swimmer, but he started training and even got some racing advice along the way from Olympian Mark Spitz (an acquaintance of Mania’s). Mandel stuck to it, training for three months.
On the day of the race at the Schroeder YMCA, Mandel donned Mania’s robe from the 2004 Olympics over a body suit. When Mandel’s wife, Eileen, saw the bigger and taller Lynch emerge from the locker room, she told a friend that her husband didn’t have a chance. But with the audience of some 50 friends of the two contestants cheering wildly, Mandel took Spitz’s advice and went out fast. Leading by a tenth of a second after two lengths, Mandel felt excruciating pain, but he kept pushing to the finish.
“We both hit the wall and looked up and weren’t sure who won,” Lynch remembers. “We were both exhausted.”
Improbably, Mandel was the victor, nipping Lynch by 12-hundredths of a second. Mandel won the $25,000, but between training costs and a donation to Schroeder, he spent more than he saved.
Building off of that success, Mandel started to swim competitively on the masters circuit, where he was part of a record-setting relay team for his age group. He also cemented a friendship with Lynch as a result of the race. “Barry is Barry,” Lynch says. “He always seems to find the right people and most interesting people to work with him on what he is doing.”
And that has had a huge impact on Milwaukee. Perhaps no developer has been more responsible for Downtown’s residential renaissance. Mandel was the first developer to prove suburbanites would move Downtown, thanks to his $85 million East Pointe Commons development on an abandoned freeway corridor on the Lower East Side. This set the stage for all kinds of development in the greater Downtown area, culminating with his signature University Club Tower, where some of the state’s wealthiest residents reside.
In a field that can often be cutthroat, Mandel has managed to run his business with integrity. In a city where some developers care more about making money than creating great architecture, Mandel has steered a middle ground, avoiding cutting-edge design yet aiming for a certain level of quality and learning from his critics. And at a time when many developers can’t get financing for anything, Mandel is still getting deals done and buildings built.
“He is probably more the type that you would see in a major city like New York, Chicago or L.A.,” says developer Gary Grunau. “Some people may feel uncomfortable with that personality, but as you get to know the guy, there is a lot behind Barry’s story.”
A Family of Lawyers
Barry Mandel was born in 1953 and grew up in a middle-class Jewish family in a two-bedroom home near 53rd and Keefe streets. With two siblings occupying one of the two bedrooms, he slept on a rollaway bed in the dining room. “It wasn’t a hardship at all,” he says. “It was part of being a family. I was given everything I could have as a child."
His father, Marvin, was a developer and would talk business at the dinner table, giving Barry an early education in how to analyze a real estate deal. Every Sunday, the senior Mandel would take the family to look at potential development sites.
“We may not have discussed as many political things, but I certainly understood the development process – most importantly, managing risk,” says Mandel, now 58.
Mandel graduated from UW-Madison with an economics degree then got his law degree from Georgetown University. “The expectation was that everyone in our family would go to law school [all three children did] and then decide what they want to do with their life,” Mandel says. Cindy is a retired trust attorney in Chicago. Elder brother Robert manages their deceased dad’s real estate holdings.
Barry went on to work as a real estate attorney in Kansas City, Mo., from 1978 to 1981. But he didn’t like administering transactions; he wanted to be the one making deals happen. Mandel returned to Milwaukee and worked for his father’s management company for a time before heading out on his own and doing his first deal with a partner, an apartment complex in Hales Corners. Then he got connected with Trammell Crow, one of the nation’s largest developers and a real estate behemoth that would put up some 40 buildings in this metro area, including the former Wyndham Hotel and the Milwaukee Center. Mandel was hired to launch the company’s residential division, concentrating on suburban development.
“When you talk about things that Barry has done, you associate it with quality,” says Breck Hanson, head of commercial real estate for Associated Bank in Chicago. Hanson has loaned the Mandel Group more than $200 million for its developments, primarily when he worked at LaSalle Bank. “He’s a former Trammell Crow partner, and I think that pedigree brings the integrity and the sophistication. That was a good background for Barry.”
Another key influence was Eileen Murphy, the woman who would become his wife. While having dinner with his father at Grenadier’s in 1985, Mandel spotted a woman in an interesting outfit walking by on the sidewalk. On impulse, he ran after her and struck up a conversation, and he learned she had designed the clothes herself. “It was actually her creativity that attracted me,” he says.
To some, Mandel bears a resemblance to Gene Wilder’s Willy Wonka character; Mandel typically wears bow ties because, he says, it makes him feel more “genteel.” But he became very aggressive in this case. “I pursued Eileen like a mad dog until she married me,” he says. “And in the end, it turned out to be a true partnership in every way. She has stretched me in ways I never thought I would go. She broadens my horizons.”
Mandel recalls a time long after they were married when he was having second thoughts about developing apartments on the site of the old Pfister & Vogel tannery. There was extensive environmental contamination, and his business associates were reluctant to take it on. Late one night, as they sat in their car and viewed the site across the river at Schlitz Park, Eileen argued in favor of it. Finally, Mandel recalls, “She turned to me and said, ‘Are you going to retire, or are you going to be my man?’ ” Mandel did the development.
Mandel’s first major project Downtown, East Pointe Commons, grew out of his work with Trammell Crow. He was familiar with the site from riding the bus as a youth down Ogden Avenue to the Jewish Community Center. Once a thriving neighborhood, it was now vacant land – nine square blocks decimated for a freeway that was never built. Mandel would sometimes drive through the area, visualizing what might be. Although others couldn’t see the site supporting anything more than affordable housing, Mandel had a different vision.
Mandel and Trammell Crow were not the city’s first choice for East Pointe. But when the original developer dropped out because he couldn’t secure financing, Mandel was approached by the city to take on the project in 1988.
But getting the financing would be tough. Mandel’s first break came during a round of golf at Brynwood Country Club. He was on the 12th hole when a representative of Wispark, the real estate development arm of the former Wisconsin Energy Corp., approached Mandel to say the company had an interest in providing some capital for East Pointe. “After that, I hit an unbelievable drive down the middle of the fairway,” Mandel laughs.
But even with Wispark’s $5 million equity contribution, banks were not awarding many real estate loans during the savings and loan crisis, even to a firm with the financial might of Trammell Crow. Sensing the opportunity slipping away, Mandel skipped the corporate chain of command, calling chairman F. Trammell Crow in Dallas. He told Crow a Japanese bank was willing to make a $17 million loan for the project’s first phase, but they needed a personal guarantee from the head man. The legendary real estate magnate didn’t hesitate, telling Mandel he’d support him any way he could. Within the hour, Mandel was fielding phone calls from several Trammell Crow partners who were incredulous at his bold stroke.
By 1991, Mandel and Trammell Crow had finished the first phase – 188 apartments – of East Pointe. But with the real estate market tanking, Trammell Crow decided to pull out of Milwaukee and turned the East Pointe project over to Mandel, who decided to form his own company.
“At the time, Mandel’s judgment in pushing forward with East Pointe was roundly ridiculed in the local real estate community,” recalls Milwaukee Ald. Bob Bauman, who was then a practicing real estate attorney. “But it turned out Downtown was viable as a residential neighborhood. The rest is history.”
Mandel had been doing suburban real estate for years and lived in a suburban home himself. So he had an idea of the kinds of interior amenities potential renters or condo buyers from the suburbs would want, right down to where they set their coffee cup. “We always tried to develop by coming up with a distinct impression of the type of consumer, targeting the product to them,” says former Mandel associate Blair Williams, now president of Wired Properties.
Mandel credits Jack Shepherd, a Milwaukee architect, for teaching him the nuances of “inside-out” development – analyzing how someone lives and tailoring the dwelling unit to them. “I wasn’t as concerned with the exterior of the buildings as I was how they lived from the inside out,” Mandel says.
Before East Pointe, Milwaukee real estate development was mostly suburban in character, says former city planning director Peter Park. At the time, then-Mayor John Norquist pushed the idea of structures with a more urban quality. Although later projects would be more urban, East Pointe in many ways realized Norquist’s vision, shunning superblocks and using row house construction, harp lights and courtyards that promoted “passive policing” by residents.
“It was a complete package – it had style, it brought presence and brought tax value,” says Rocky Marcoux, commissioner for the Milwaukee Department of City Development. “It knitted back the urban fabric. Before that, it was this huge scar on the east side of Downtown. Barry had a lot of vision.”
East Pointe would go on to be recognized for excellence by the international Urban Land Institute. It also helped change the perception among developers and city residents about Downtown, says Norquist, now president and CEO of the Congress for the New Urbanism in Chicago. “Barry understood pretty early that there would be a market in the Downtown, so I give him credit.”
East Pointe was catalytic for the surrounding area, contributing to the Brady Street revitalization. Other developers followed Mandel’s lead, with new condominium construction and redevelopment of older buildings in the Downtown, Third Ward and East Side areas.
Sweating the Details
In November 2003, John Norquist called Mandel to gauge his reaction to the mayor’s idea of building side-by-side high-rise condominium towers on Prospect Avenue between Kilbourn Avenue and Wells Street. The city owned one plot of land, and the other tower would go up on the parking lot of the University Club, which was interested in the idea. Mandel was one of four developers who submitted plans to University Club, and he got the project.
“I had done $400 million worth of developments by then,” Mandel says. But that hadn’t really prepared him for this challenge. “If East Pointe was a leap of faith, then building a high-rise for the first time is like jumping from here to Chicago – it’s an enormous difference. Any mistake is tens of thousands of dollars, if not millions of dollars.”
Mandel’s company brought in outside investors for the first time, but the project’s cost and scale was still scary. He would spend $250,000 on detailed plans for the luxury high-rise, only to later scrap those plans (for six units per floor) when market research showed potential tenants wanted more space (3,500 square feet) and large terraces integrated into their living units. The final design settled on two units per floor, eliminating common hallways, with an elevator opening up to the owner’s private residence. The targeted customers were the city’s elite, who, Mandel says, could afford to live anywhere in the world. They wanted space, privacy and good craftsmanship.
Mandel hired Peter Ellis, an architect from Skidmore, Owings & Merrill who, only six months earlier, had visited the Milwaukee Art Museum’s Santiago Calatrava addition and marveled at its design. An architect who had designed world-class high-rises, Ellis jumped at the chance to create an iconic building across from the Calatrava.
All these changes pushed the budget upward: The original plan cost $57 million, but the final figure soared to some $120 million.
Ultimately, the University Club Tower was only a break-even proposition for Mandel. But it was a signature building, what Marcoux calls Mandel’s “crowning achievement.” And it would have been a horrible failure if Mandel hadn’t attracted the kinds of buyers he had projected – partners of major law firms and brokerages as well as elite CEOs like Steve Marcus of the Marcus Corp., who shares the top floor with Mandel. Occasionally, Mandel's residence serves as the backdrop for charitable events.
Knowing your market is one key to his success, Mandel says. “We have been studying this market, and only this market. This is our laboratory. This is what we do.”
“Barry thinks through all the issues very carefully,” says Bruce Block, a real estate attorney with Reinhart Boerner Van Deuren. “With other developers, you’ve got people who are not big-picture oriented, focus on the details later, or fail to look at all the details, period.”
“The main thing I liked about Barry was the integrity, and that he was so hands-on in the project,” says Fran Brzezinski, the former head of Wispark. “I knew Barry would do enough worrying for both of us to have the project perform at the highest possible level. So he was the perfect partner.”
Mandel is quick to credit others: “I learned early on that one of the most important things was to hire people better than me.”
Mandel will flesh out a plan’s details in a collaborative brainstorming effort, Williams says. “He will review the process and the conclusions the team has made, or push the team to think about it in a different way.”
Mandel is recognized for turning around troubled developments, such as the financially distressed Point on the River and the Park Lafayette Towers, which saw occupancy rise from 65 percent last July to the current 95 percent.
And Mandel insists on high-level service and maintenance on his properties: “We resod our grass every single year – we want it to be the greenest. We want people to feel like this is their home.”
In projects like Marine Terminal Lofts in the Third Ward and the North End in the Park East corridor, Mandel has successfully attracted suburban empty-nesters and young urban professionals. “The Mandel Group knows who they are and how to find them,” says Ald. Nik Kovac, whose district encompasses a number of Mandel developments. “They really have discovered a magic bullet in terms of finding the right demographic.”
When the first phase of the North End opened in 2009, the apartments were 97 percent leased within the first year, with 77 percent of the tenants moving from somewhere other than Downtown. “They are driving a new demand,” says Kovac, “which is catalytic for Downtown.”
Mandel has been just as detail-oriented when it comes to handling financing. He’s paid back all of the more than $200 million loaned to him over the years by the former LaSalle Bank, Hanson says.
Mandel Group has a reputation for completing every project, Williams says: “Barry is very diligent and doesn’t extend himself beyond the rational limits of market conditions.”
That paid off after the 2008 financial meltdown. “There are developers who have done nothing wrong, and they are out of business because the banks had to take their loans to them off the books,” says Robert Dennik, who works for VJS Construction Services in Pewaukee.
Not Mandel. When the condominium market frothed over in 2006, his company was close to completing its last condo development, The Watermark in Elm Grove, and then pivoted to developing apartments.
“If you have a lot of experience and history, when the water moves away from shore, you’ve built a longer dock, and you still have water underneath,” Williams says. “Barry understood how to remain in position until the tide comes back in.”
Jim Shields of HGA Architects has worked as an architect with a number of developers. A hallmark of the Mandel Group, he says, is its political know-how. “They can win approval for difficult projects,” says Shields, who worked with Mandel on an adaptive design for the Marine Terminal Lofts on the Milwaukee River.
Dennik says Mandel has a rare combination of political savvy and street smarts: “Typically, developers are the worst at government affairs. Barry is not going to pick a fight if it’s not going to do anyone any good. He has been able to reach out to people and find that balance point of what you need to do to get something done. He has done a lot of really tough developments where others would just throw up their hands and say, ‘We quit.’ ”
In October 2009, after Mandel completed his $22 million North End project, he was in a good spot to ask for city help for the second phase. The project, after all, was a success story, among the largest in the redevelopment area where the Park East freeway once stood. The property tax revenue it generates will help the city pay off the $37 million in debt incurred in preparing the 64-acre Park East area (with new streets, a new bridge, etc.) for development projects.
Mandel received $8.5 million in city help for demolition and environmental cleanup related to North End. Now, he wanted an $8 million loan from the city for North End II, a $36.7 million, 155-apartment expansion. The city was amenable to helping with street work and other public improvements at the site (it will spend $2.2 million on this), but Mandel wanted the loan as well. However, the negotiations with Marcoux and Mayor Tom Barrett dragged on.
Meanwhile, Mandel secured some $26 million in tax-exempt bonds issued by the Wisconsin Housing and Economic Development Authority for phase two, lowering his financing costs and generating some grumbling from real estate observers. The money was part of the federal Midwest Disaster Area Bond program for flooding that occurred in southern Wisconsin. How exactly did this project relate to a subsidized housing program for a flooding disaster?
There are no special requirements for the government help, Mandel notes, other than providing affordable housing: To qualify, 20 percent of the units in North End II have to be priced at 60 percent of the area’s median income.
But the negotiations for the $8 million city loan seemed to hit a stalemate. Finally, says one real estate insider, Mandel decided to try an end run around the mayor.
“That was a gutsy move,” the source says. Mandel did it anyway, enlisting the help of Kovac and Ald. Michael Murphy, and lining up a majority to vote his way. But it was not a huge victory.
Marcoux made a verbal offer of a $4.5 million loan. The Common Council upped it to $4.629 million. “In the end, [Mandel Group] elongated the process, and I think it ended up costing them money on holding costs,” Marcoux says. “What was gained? Nothing.”
Mandel unhappily concedes the point: “It took us way too long, nearly two years, to get the loan for what should have been an easy answer for the city.”
And he misses the days of the Norquist administration: “It was always, ‘How can we get this done and make it better?’ ” Now, he says, the Barrett administration lacks such passion and fervor about development.
Getting a development done is a financially risky process. Before ground is broken, the predevelopment phase requires the expenditure of anywhere from $1 million to $4 million of at-risk capital. “We don’t just go and put our hand out at City Hall,” he says. “By the time you know you have a deal, you are really invested.”
All big developers ask for public money, says Norquist, whose administration took a stance of not providing city subsidies outside of offering tax incremental financing. “Everything Barry has received is very little compared to other cities. In other cities, they get taken to the cleaners.”
All told, however, Mandel did pretty well, getting some $31 million in low-interest government loans for North End and leaving just $5.7 million in conventional financing to secure.
Mandel is a tough negotiator who is politically savvy, Hanson says. As Williams puts it, “Barry is very adept at identifying the opportunities and the risks and where they lie. He is good at complex transactions, and some of those involve public participation.” Mandel’s success in getting subsidies from Milwaukee and other municipalities is a testament to his deal-making ability, Williams adds.
Indeed, Mandel will do better for a planned development in Shorewood. LightHorse 4041 will be a $35 million, six-story, mixed-use development with 84 upscale apartments on Oakland Avenue. Mandel has secured $27.5 million in Midwest Disaster Area bonds and $8.5 million in community development bonds from Shorewood. This provides low-interest financing for the entire project.
Mike Mervis, vice president for the Zilber Ltd. development firm, says Mandel has the ability to identify the shortest distance between two points when he encounters an obstacle. “And that’s what really defines a good developer,” Mervis says. “He’s smart and tenacious. Sometimes, how he succeeds is pretty much a mystery.”
The Big Picture
In 1999, Mandel completed his Lake Bluff project on Prospect Avenue. Even before it was finished, its design came in for criticism from then-Milwaukee Journal Sentinel architecture critic Whitney Gould, who called it a “historical wannabe” that, despite some good features, foolishly verged toward a “literal-minded imitation” of classic historical buildings on the street.
“He was very wounded by my column,” Gould says. “He said the market would not really support the kind of buildings I was advocating – that people wouldn’t want to live in new modern buildings.”
Another sometime critic was Milwaukee Magazine architecture reviewer Tom Bamberger, who says that, over time, Mandel learned from his critics. “He has learned from Norquist about urbanity, and Whitney Gould and Peter Park,” Bamberger says. “He didn’t start out knowing any of this stuff. Most developers don’t believe in modern architecture, but Barry does.”
Gould agrees. “I have to say he has invested in better and better architecture, gotten better architects and allowed them to explore better design. He realized that you can build good contemporary buildings and not break the bank.”
She points to University Club Tower. With well-articulated design at the street level and flecks of white quartz that reflect in the afternoon sun, Gould says the building evokes the feel of a cathedral in Sienna. The surface of the tower is clad in clear glass and white precast panels, which form a crown and add a contemporary landmark to the Milwaukee skyline, says architect Ellis. At 446 feet, it's the third-tallest building in Wisconsin.
John Vetter is a principal with Vetter Denk architects, known for its cutting-edge designs. He says Mandel does a good job of balancing the dictates of the market and the challenge of creating a strong design: “That is the skill the Mandel Group has. They push the architecture to the right amount without going overboard, and it becomes a successful development.”
“Barry has a very solid working knowledge in the field of architecture,” Shields says. “He has gone to study buildings around the world when he travels, he subscribes to Architecture Magazine, and he reads books on architecture.” That’s unusual for a developer, he adds. “It’s part of what makes Barry exceptional.”
In his travels, Mandel says he likes to visit the newest hotels looking for interesting concepts. Lake Bluff’s hallways were inspired by Istanbul’s Four Seasons Hotel.
When Mandel was building a later phase of East Pointe, Park says he got the developer to see the wisdom of leaving nearby land undeveloped to enhance the overall aesthetic. That’s become a Mandel trademark: creating parks or green space within the context of the developments. On a late December tour, Mandel points with pride to the parklike settings in his developments, adding, “We try to create surprises in the urban environment.”
Shields points to the example of Burns Commons, the triangular park bordered by Prospect and East Ogden avenues, which is overlooked by two Mandel apartment complexes, Lake Bluff and The Franklin. Mandel Group worked on a public-private venture with the city and county to create a sculpture garden. Mandel and several other local companies spent about four times as much as the usual price tag for local public art to buy a Beverly Pepper sculpture, Shields notes. “I can’t think of another developer here that has been associated with a major gift to the civic realm,” he adds.
“He’s got a vision for Downtown Milwaukee,” says Lyle Balistreri, president of the Milwaukee Building and Construction Trades Council. “He wants to connect his buildings, such as the North End, to the RiverWalk and to the surrounding neighborhood.”
And he’s an art collector with a passion for promoting the creative class. The Mandel Group has provided office space rent-free to a software development firm, Translator, and to Plaid Tuba, which works to provide business structure and career management for artists. Housed in the Marine Terminal building next door to Mandel’s offices, Plaid Tuba is thriving. One of its business endeavors involves consulting with the Mandel Group to integrate fine art into the North End and other developments. Several paintings by Plaid Tuba principal Reginald Baylor hang on the walls of Mandel’s own residence.
“Barry has a mad love for the arts,” Baylor says. “He seems to be directly integrating the creative economy into his business model for development. It helps when you have an organization such as the Mandel Group supporting local creatives.”
Bob Monnat, chief operating officer of Mandel Group, says Plaid Tuba and Translator were hand-picked with the goal of adding to the creative culture of the Third Ward. “I sit here all day looking at spreadsheets,” Monnat says, “and there are days where I see Barry walk over there to cool his brain off and get a little bit of inspiration … and he walks in to me and says, ‘It’s so much fun having those guys next door.’ ”
Mandel has also worked to promote minority participation in real estate. He sponsored the Associates in Commercial Real Estate Program at Marquette University for three years, giving $105,000 and teaching a course in conjunction with other Mandel Group associates. “That really says a lot about who he is and how he operates,” Marcoux says. He’s been a mentor to one program graduate, Melissa Goins, who founded a real estate firm specializing in urban revitalization. She says Mandel helped guide her when her business was in its infancy, and he remains a friend and adviser.
In 2007, the Hispanic Chamber of Commerce of Wisconsin named Mandel Group as its corporation of the year for efforts in hiring minority contractors. “They are extremely well-connected, and they make it their business to give everyone a fair shot,” says Maria Monreal-Cameron, Hispanic Chamber president.
To date, the Mandel Group has developed and constructed more than $500 million in residential and retail developments, and financed, acquired or sold approximately $700 million worth of real estate. The Mandel Group boasts some $14 million in annual real estate taxes created by its developments, with $10 million of that annual impact in the city of Milwaukee. The boom in Downtown housing that Mandel helped create was measured by a DCD study, which found 18,000 people now live in the greater Downtown area, a 20 percent increase from the year 2000.
All of that success has won wealth for Mandel. But Leonard Sobczak, CEO of the gay newspaper Wisconsin Gazette and a man who’s known Mandel since they were UW-Madison students in the early 1970s, says Barry is still Barry. “He doesn’t put on airs or talk about his money,” says Sobczak.
On a midwinter tour of his developments with a reporter, Mandel greets the employees who work in his buildings by their first names. He is the benevolent leader, treating everyone as an equal but very much in command. One stop is at Park Lafayette, the high-rise apartment development on the Lower East Side that the Mandel Group effectively rescued from the bankruptcy of its original developer. It offers a commanding view of the East Side, Downtown and the lake. When asked if he feels like he’s looking out over his own real estate empire, Mandel defers.
“The way I feel inside, everything we do as a company is one development at a time,” he says after deliberating on the question. “One brick at a time.”