In an effort to revitalize the retail component of its Midtown neighborhood, Milwaukee helped design and finance the construction of a new shopping center. Called Midtown Center, the $57 million development is replacing an ailing regional mall and creating up to 1,900 jobs for area residents.

Midtown Center, the first phase of which opened last fall, sits on the former site of Capitol Court, a regional mall that opened in the mid-1950s. The mall was successful until the 1980s, when newer regional malls and suburban shopping centers began to lure tenants away. By the end of the 1990s, just a handful of stores were left, estimates Julie Penman, commissioner of city development for Milwaukee.

The decline of Capitol Court was of great concern to city officials. “It left this entire area without a commercial anchor,” Penman says. “Without a commercial district, the residents would have to travel all the way across town to make purchases. That dynamic makes the neighborhood weaker, because people want to live in an area that has the services for their day-to-day living.”

By 2000, locally based Boulder Ventures was negotiating with Seattle-based Winmar, the owner of Capitol Court, to buy and redevelop the site. Boulder representatives informed city officials that the cost of tearing down the mall was a roadblock to the company's ability to start the project. The city agreed to loan the developers $6.5 million for the demolition and infrastructure improvements. The city designated the site a Tax Increment District, which allows the developers to repay the loan with property taxes from the center.

“From our perspective, we strongly feel that government should get out of the way and let the private markets work,” Penman says. “That's one of [Milwaukee Mayor] John Norquist's basic philosophies. But, there are times when the market is not operating efficiently, and it needs a nudge. This was one of those times.”

Milwaukee also helped create the new shopping center's concept. During a series of meetings in which the developer presented city officials with its redevelopment plans, City Planner Peter Park persuaded the company to make the development a “town center.” In contrast to Capitol Court, which was surrounded by a gigantic parking lot, Park wanted the center to contain streets and sidewalks lined with shops. In place of one large parking lot, the developers created several medium-sized parking lots.

“The design connects the project with the surrounding neighborhood,” Penman says. “Instead of a mall surrounded by a huge, sprawling parking lot, it is connected to the neighborhood through streets and sidewalks. This makes it easy for people in the neighborhood to get to the site.”

Upon completion of the project's final construction phase, expected to take place in 2004, Midtown Center will contain 606,000 square feet of retail space. The 300,000-square-foot first phase contains a Wal-Mart, a Pick 'n Save grocery store, a Foot Locker and a Payless ShoeSource.

To capitalize on the increased shopping traffic in the neighborhood, Milwaukee has designated the area surrounding Midtown Center as a Catalytic Project Area. The designation gives business owners in the area increased access to several types of business-improvement grants. For example, business owners in the area can receive matching grants of up to $6,000 for improvements to their buildings, compared with $5,000 in other sections of the city. Milwaukee also concentrates façade matching grant money, used for making exterior improvements to a business' building, in Catalytic Project Areas.

Milwaukee is working with retailers in Midtown to form a local business association, which eventually could form a Business Improvement District (BID). Members of a BID tax themselves a certain amount beyond their regular property tax to fund area improvements, such as streetscaping projects.

“The bottom line for us is that we want to add value to the city and to have healthy, thriving neighborhoods,” Penman says. “Midtown Center [and the offshoot projects] weave the neighborhood back together again and make it strong and vibrant.”