Is It Time for Downtown Shorewood to Grow Up?

Following the failure of development plans at the former Riverbrook Restaurant, and then fruition of the Cornerstone development early this year, Shorewood is putting its faith — and money — into two more developments planned for North Oakland Avenue.

The village is fronting the $60,000 bill for demolition of the Riverbrook site, with plans to recoup the cost through a special assessment on owner Sunrise Shorewood WI Senior Living's tax bill. Development plans for a senior home failed after the economy collapsed.

However, the village's most recent development project, the , quickly attracted business and residents to the previously underutilized north end of Oakland. In five month's time, all retail and apartment space was leased.

And now, village officials have two more Cornerstone-like projects in mind for Oakland Avenue and plan to invest more than $8 million in them.

The village is expected to provide $7.4 million in grants and loans in support of Milwaukee-based developer, The Mandel Group, to build a , that includes 84 apartments, two parking structures, and retail space for .

Officials plan to recoup the $3.93 million grant and roughly $1.3 million in expenses from the extra property taxes over 18 years, via a special taxing district.

The developer would pay back the $3.48 million loan over 17 years, using revenue from the apartment and retail store rents.

And just blocks away, WiRED Properties plans 22 apartments and 7,500 square feet of retail in a $6.5 million development it has coined the Ravenna. Performance Running Outfitters currently located at 4401 N. Oakland Ave. plans to take one spot, and WiRED Properties is talking with other potential tenants, said Blair Williams, president of WiRED Properties. The village in the 4500 block of Oakland Avenue at a significantly discounted price to WiRED Properties, the developer of the Cornerstone.

These ambitious plans and significant investments have residents wondering: How will these developments affect Shorewood?

Why develop?

As dense, confined suburbs like Shorewood attract more residents and businesses, it seems the only way to grow is up. Throughout the country, tall mixed-use buildings are increasingly popular solutions for suburbs looking to expand their business districts. 

"We've got a landlocked community that can't enhance its tax base by building a Bayshore," Shorewood Business Improvement District Director Plaisted said. "All it can do is maximize the value and environment of its commercial district.

Shorewood's business district has been growing at a rapid rate since late last year, adding more than 10 businesses in just a little more than six months. Village officials were envisioning mixed-use buildings for Oakland Avenue as early as 2006 when they published their master plan for the central district. The plan even targeted the stretch between Sendik's and Pick 'n Save, as well as the north end of Oakland Avenue for mixed-use development to encourage a more active and accessible shopping zone.

"You've got this massive commercial district, the entire corridor of Oakland and Capitol, and there's far too many single story buildings and surface lots," Plaisted said. "The commercial district needed to be rebuilt with an urban sensibility, which means mixed-use buildings."

Village officials say they hope the developments will attract more customers and businesses to Shorewood, as the new Cornerstone development has on the north end of Shorewood.

"(Cornerstone) is providing a new buzz and visitors to Shorewood because it is so unique," Plaisted said.

Williams said he envisions Ravenna as an extension of the Cornerstone.

"I think it will finish the task of anchoring the north end of Shorewood, and the Cornerstone and Ravenna will act as bookends at the entry to Shorewood," he said. "We've helped spread the energy of Shorewood down Oakland farther and create another node of activity and a place for the community to gather."

If Shorewood succeeds in bringing in more businesses and increasing property values, the village will bring in more tax revenue. After paying off the village's investment in the developments, village officials estimate the Mandel project will bring in more than $500,000 per year in additional taxes.

Bringing new families to Shorewood

Marc Levine, a professor of history, economic development and urban studies at the University of Wisconsin-Milwaukee, said suburbs across America are also increasingly attracted to this kind of development for the alternative housing options it offers.

"There's a growing cohort of people who are attracted to more urbanized development forms," Levine said. "They don't necessarily want to move back to the city, but they want a more urbanized environment."

Levine said this segment of the population could be growing due to aging baby boomers who are looking to downsize without leaving the comfort of their suburban community.

Many of these residents could be empty-nesters, leaving behind bigger houses for new families to move into.

School Board President Paul Zovic hopes the new development will bring new families to Shorewood, increasing the school district's resident enrollment, which has been on a downward trend for the last decade.

Will development succeed?

With the village government funding a substantial portion of the Mandel development project, the village is banking on its completion and success.

Levine said incentives like this could be motivating developers to start projects that would otherwise be too risky.

"They're being provided with a healthy set of incentives. It lowers their risk," Levine said.

In relieving the developer of some risk for the developer, the village takes it upon itself. 

Levine said this should be done with caution, and only with confidence that the market will support such a project. If a developer is unable to finance a project independently, Levine said, it might imply that there isn't enough demand for the development.

However, Levine said many factors unique to Shorewood suggest that there is a fertile local market for development.

Having multiple developments spring up in the neighborhood around the same time could bolster their success, he added.

"That's the best-case scenario — you've got good planning going on," Levine said. "The process becomes a virtuous circle where developments feed off each other and create a positive development environment."

Levine also said the proximity to Milwaukee could bring business and tenants.

Chairperson of the village's Community Development Authority, Pete Petrie, said the village erred on the side of caution in estimating construction costs, minimizing the chance of failure as much as possible.

"Anything can fail, but we have a very high certainty that this won't," he said. "We've been conservative in looking more on gloomy side than on bright side in estimating things, so we're more likely to be surprised for the good."

Levine said factors that could cause development to fail include significantly rising interest rates, inflation, or recession. But he doesn't expect any of these to occur in the near future.

Residents concern over Mandel development

Sharing the block with the Mandel development site, members of the North Shore Presbyterian Church have voiced concerns about being overshadowed by the development, literally — they have solar panels on their roof.

Members were also concerned that the alleyway north of the church used for handicap drop-off could be jeopardized.

However, church member Cynthia Mathews said representatives from Mandel have spoken with members on multiple occasions to work through their concerns.

Meanwhile, some residents have raised concerns over an increase in traffic near the proposed Sendik's development, where Walgreens will unload its trucks as new products come.

At a public hearing Wednesday night, about 10 residents gathered to hear village officials and representatives of Mandel present their plan for the block of Sendik's.

One resident was concerned the six-story building could cause wind issues on Oakland. Another was worried the entrances to parking lots could discourage pedestrian use of the area. However, most who spoke voiced support for the plan.

Others residents have raised questions about the village creating a new tax increment district to support Mandel. At the hearing, Petrie said the new district will be able to borrow money to fund the project, and then recoup the costs from property taxes.

Some residents also said the proposed building was unnecessarily tall, but Petrie said it needs to be six stories in order to make development profitable. He said the village would have to front an additional $1 million if officials decided to make the building just five stories.

The Mandel proposal is moving right along, being reviewed by the Shorewood's Plan Commission, Design Review Committee, Joint Review Board and CDA. If all goes as planned, the Village Board will vote on the plan June 20. If passed, construction will begin in the fall and last at least 13 months.

John Nehring, owner of the Sendik's on Oakland Ave., previously told the Business Journal he was worried about losing business during construction. But he later told Patch he supports the project and believes it will ultimately benefit business.

"It might hurt business for a very short time," he said. "But, I think it's a very positive thing for all of Shorewood and business on this end."