Milwaukee’s first hostel, forced to close its doors because of the economic fallout from the coronavirus pandemic, is being transformed into cooperative housing for city residents.
Cream City Hostel opened in June 2019 in a building at 500 E. Center St. but fell victim to the pandemic. It will undergo a conversion that is being backed with a $450,000 program-related investment loan from Bader Philanthropies.
The cooperative tenant housing model is particularly well-suited for the realities caused by the pandemic through the creation of a safe “pod” of known residents and offering a living community that helps support people dealing with losses and uncertainty such as jobs, instability and landlord challenges, according to RiverBee LLC, which owns the property.
“The beauty of this pivot is that the project will stay true to our original vision of this work, which was to collectively empower the community, ourselves and each other to make our lives and neighborhoods better,” said Juli Kaufmann, managing member of RiverBee LLC and president of Fix Development.
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The RiverBee redevelopment project is situated between the Riverwest and Harambee neighborhoods. The neoclassical brick building was constructed in 1927 to house the Holton Street State Bank, but after the bank’s 1960 closing it became a site for groups like the Boys & Girls Clubs, Centro Del Nino, and a Head Start-affiliated charter school.
The building was deserted in 2006.
RiverBee convened more than 40 local investors to purchase the building and completed the build-out that transformed it into the Cream City Hostel, which hosted thousands of travelers from more than 38 countries within a year. The project also sparked additional investment in the commercial corridor, including streetscape upgrades by the city of Milwaukee.
Concerned that the hostel business would face one of the most difficult recoveries, RiverBee changed course to the cooperative housing model.
Kaufmann led the $1 million redevelopment Cream City Hostel project, partnering with Riverwest residents Wendy Mesich and Carolyn Weber. More than 40 community members, most of them from the Riverwest and Harambee, became direct investors in the building through a crowdfunding ownership model.
“Affordable housing is one of the biggest issues we face as a society, and Milwaukee isn’t immune,” RiverBee investor Jerad Tonn said. “Cooperative housing is another way for people to have a more affordable style of living and easier access to home ownership, while being part of a smaller community within the great communities of Riverwest, Harambee and Milwaukee. I think that’s really appealing for some people, and I think Riverwest is the perfect place for it.”
Since cooperative housing is not yet common in Milwaukee, RiverBee is seeking to grow its expertise through partnerships with experienced groups that can help recruit interested occupants and guide the formation of the cooperative.
RiverBee initially partnered with Milwaukee Area Cohousing and is now actively seeking individuals interested in exploring becoming lead members of the cooperative housing model. There are plans to make some modifications to the current rooms and redevelop the property’s garden. The transformation will begin in January, with the hope of opening in spring or summer.
RiverBee is anticipating local residents will be looking for affordable housing in the coming year with the ending of the eviction moratorium on Dec. 31. RiverBee hopes to provide housing for at least 12 residents.
“These developments are successful, in part, because they engage community investors who are committed to the success of the tenants, support tenants who are responsive to the neighborhood’s desires, and reflect the community throughout its owners, tenants, employees and customer base,” Kaufmann said.
The program-related investment load from Bader Philanthropies will replace two bank mortgages and allow RiverBee to restructure the debt payments to account for the current economic situation resulting from the pandemic.
“Bader Philanthropies supports RiverBee and this trailblazing concept, which addresses a critical community issue – access to affordable housing,” Bader Philanthropies president and CEO Daniel Bader said. “We recognize that this is a time when we can make a real difference in the lives of people who need many things, including our community members who are looking for an affordable alternative to renting.”