The Mandel Group COO and a developer at The Griot discuss development.
The Lure of Luxury
Luxury apartment buildings continue to crop up in Milwaukee, but only a few developments have addressed the pressing need for affordable housing. We asked Bob Monnat, chief operating officer of Mandel Group, a Milwaukee firm whose upscale apartment projects have included The North End and DoMUS, to chat with Melissa Goins, developer of The Griot, a Bronzeville project that offers affordable units and includes America’s Black Holocaust Museum. She’s also a vice president at development firm J. Jeffers & Co. Their conversation took place in the DoMUS clubroom overlooking the Milwaukee River, and centered on the question of why so little affordable housing is being developed. – Moderated by Rich Rovito
Melissa Goins, developer, The Griot
Luxury apartment buildings continue to crop up in Milwaukee, but only a few developments have addressed the pressing need for affordable housing. We asked Bob Monnat, chief operating officer of Mandel Group, a Milwaukee firm whose upscale apartment projects have included The North End and DoMUS, to chat with Melissa Goins, developer of The Griot, a Bronzeville project that offers affordable units and includes America’s Black Holocaust Museum. She’s also a vice president at development firm J. Jeffers & Co.
Their conversation took place in the DoMUS clubroom overlooking the Milwaukee River, and centered on the question of why so little affordable housing is being developed. – Moderated by Rich Rovito
A condensed version of this conversation was published in the January 2019 issue of Milwaukee Magazine’s cover story: Let’s Talk It Out.
The Lure of Luxury: Bob Monnat and Melissa Goins
BM: We are defaulting to luxury housing because that’s what we can finance. The piece that we can’t do enough of is affordable housing.
MG: Doing urban renewal projects is extremely difficult. It requires funding sources from every level of government. That makes it tricky.
BM: There are a lot of areas that you would think would be kind of a natural progression off Downtown.
MG: I love Bronzeville, with its proximity to Downtown and the Bucks facility. It’s a natural urban habitat. I would think about some near South Side neighborhoods and maybe Century City as other sort of key neighborhoods.
BM: You have really become an expert and a leading voice in the areas where you work. Ten to 15 years ago, you didn’t find black women developing commercial real estate in Milwaukee. There is so much more participation across the board in the development community from people who traditionally weren’t part of it.
MG: I think everything that I’ve been able to do has been transformational. Some have had a bigger impact than others. The timing has to be right to get funding. In the case of The Griot, it definitely isn’t an accident that it’s literally on the same street and one mile to the north of the new Bucks arena. It benefits the community.
BM: The demand for affordable housing is insatiable. Milwaukee is doing just fine on market0rate and luxury housing. It’s woefully short of affordable housing. There are not enough financial resources to meet the demand.
MG: The city of Milwaukee has put together a [tax increment financing] program that’s supposed to encourage the development of affordable Downtown housing.
BM: The real challenge is not figuring out if there’s room for another high rise. The challenge is, how do you make a Downtown market that includes everyone? Luxury housing has predominated solely because of economics. You have to make it more inclusive. We had one opportunity to do that back in 2012 with The North End. We were able to get 30-some units of affordable housing into the mix because of financing that was available at the time.
MG: The unfortunate reality for Milwaukee is that when you talk about affordable versus market rate, there is a direct link to diversity. Typically, your market rate folks are white, and your affordable folks are non-whites, or a diverse population.
BM: There should be some way to take all the benefit that’s being derived from Downtown development and push it into the neighborhoods.
MG: If you think about the budget for the police, it only makes practical sense that if we somehow stabilize neighborhoods, we then save money in other ways and we all benefit.
BM: You serve as a great role model for others. That’s inspiring.
MG: Before I joined Josh Jeffers’ team, I felt complete. I felt like The Griot and the Good Hope Library were great capstones for me. I was looking to transition out. But Josh was like, “Wait. There’s more work for you to do.”
BM: We have a project that we’re working on now. The Wisconsin Cold Storage complex and Kurth (Corp.) properties that we’ve assembled. It links to the Harbor District. A lot of what is going on is in response to the millennial workforce. That has fueled some of the demand for new apartments. There’s also demand being created by aging baby boomers who’ve elected to change or simplify their lifestyles.
MG: One question that has not been answered is what Foxconn truly will generate in that neck of the woods. We’re considering some deals further south. Racine, Kenosha, Mount Pleasant.
BM: A lot of what you’ve seen happening in Oak Creek and in the south end of Franklin is because there’s a certain amount of Foxconn-induced demand.
MG: One thing that impresses me about the Mandel Group is you have a long view of real estate while also balancing and being responsive to more immediate needs.
BM: We haven’t pulled the trigger on our (20-story) Portfolio project for a variety of reasons. (Northwestern Mutual Life Insurance Co.) just finished a 300-plus unit tower, and the Couture has been in line for quite some time. We bought the North End property less than 30 days after 9/11 happened. Our plan was that it was going to be built out over seven years, not 17. But we were whipsawed by the immediate reversal out of residential housing when the condominium housing boom happened.
MG: Everything that I’ve done has been more of a two- to five-year sort of outlook.
BM: There are a lot of younger developers, and they have all their different interests. But it seems that there is this overriding interest in that whole group as to what the qualitative outcomes are of their projects, not just the quantitative outcomes. They’re worried about the impact of projects on the community. There’s a keen interest in the quality of the design, the quality of the finished product and how it fits into the city. Part of that might be market responsive in that Milwaukee has become a more design-conscious city.
MG: Everybody’s a design critic now.