Coffeehouse owner Steve Goretzko has had his eye on the historic Milwaukee River Flushing Station for years. The café has been a gold mine for Alterra Coffee. But in March, the Milwaukee Metropolitan Sewerage District extended Alterra’s lease in a no-bid process that has Goretzko crying foul.
“That’s parkland that belongs to all of us, being used for private gain,” says Goretzko, who runs Sven’s European Café in Bay View.
The old Socialist ethic of Milwaukee opposed using public land for private gain. But those days are long gone. Milwaukee County alone leases lakefront land to Lake Park Bistro, the Bradford Beach pavilion and the Northpoint Snack Shop, as well as to Starbucks at Red Arrow Park.
“The forces of development are always imagining an idea to corrupt our beautiful lakefront,” says Milwaukee County Supervisor Gerry Broderick. The Preserve Our Parks advocacy group lists some 24 lakefront proposals made over the years, including a clown museum, an organ donors’ plaza and a 120-room hotel.
Interestingly, most parks advocates have embraced Alterra and similar places. “We don’t have a problem with things like snack bars for people who are down there enjoying the lake,” says John Lunz, president of Preserve Our Parks .“When it comes to Pieces Of Eight, a destination restaurant, that clearly does not fit the criteria of private usage of public land.” The group has also opposed replacing Pieces of Eight with UW-Milwaukee’s proposed School of Ocean Sciences .
Alterra’s original lease, signed in 2002 for an annual rent of $21,500, was far too low for such a prime location, says Goretzko. The MMSD came to the same conclusion, and in September renegotiated and extended the lease through 2022, with a far higher rent ($144,000 a year), though with a considerably larger footprint. But MMSD officials note that Alterra has spent some $500,000 on capital improvements at the facility.
In fact, these contracts typically require renters to pay for upgrades, which is why long-term leases are signed. “No one is going to put that kind of money into capital improvements for a one-year lease,” notes County Parks Director Sue Black.
The Bartolotta Restaurant Group has spent some $800,000 to update the 114-year-old pavilion occupied since 1995 by Lake Park Bistro, and $160,000 on improvements at Northpoint. The G-1 company is required to spend $100,000 during its first three years at Bradford Beach.
The details of these deals can vary greatly. The G-1 lease for the Bradford Beach concession stand (signed in March 2009) requires it to pay 6 percent of gross sales for the first three years, and 10 percent in years four through nine. The Bartolotta group’s lease for Northpoint Snack Shop (signed in April 2009) calls for a 4 percent commission on gross sales for the first three years and 5 percent in years four through nine.
Starbucks at Red Arrow Park has a more straightforward deal: Its 10-year lease, signed in 2002, requires an annual payment of $33,000. Lake Park Bistro pays $34,981 per year, but also contributes 3 percent of sales in excess of $1.5 million (so far, an average of $82,500 a year) to a fund dedicated to improving the area around the building.
Lunz believes the deals should receive more scrutiny. “We think there should be a free and open discussion, an open bidding system.”
Yet the high usage of these facilities suggests the public is pleased. “Everybody loves them,” says Janet Marie Tierney, executive director of The Park People of Milwaukee County. “They bring people to the lakefront, and then they rediscover the lakefront.”
