Former West Bend Co. factory redevelopment continues with new luxury apartments

WEST BEND – More than a decade in the making, the redevelopment of West Bend Co.'s former factory complex is entering its final stages.

The next batch of new luxury apartments will open Sept. 1 at the four-story Cast Iron building, part of the larger River Shores development near downtown West Bend.

All 59 new apartments will open by Oct. 20, with about half the units already leased, said Cathryn Gallun, Cast Iron's property manager. They will join Cast Iron's first phase of 70 apartments, which began opening in May 2016 and were fully leased within three months.

"It went very quickly," Gallun said.

Cast Iron's success comes after years of delays in redeveloping the former manufacturing site. The River Shores project lagged during the recession, which led to renting out housing units that were built as condominiums. That's caused a lag in paying off the city's $14.2 million financial stake in River Shores.

The turnaround comes as demand strengthens for both condos and apartments in West Bend.

The vacancy rate for apartments in Washington and Ozaukee counties, which includes West Bend, was 1.2% during the first quarter, according to the latest report from Marcus & Millichap, a national commercial real estate services firm.

That compares with a 3.4% vacancy rate for the entire Milwaukee area, the report said.

Meanwhile, with strong housing sales, the condos at two River Shores buildings — The Lofts at River Shores and The Point at River Shores — are nearly sold out after being put back on the market in 2016, Gallun said.

West Bend's strong housing market is helping Cast Iron land new renters, Gallun said.

Cast Iron offers leases for six months, 12 months and 18 months. Some of those six-month leases have been to people who've sold their West Bend houses and are waiting to buy or build a new house or condo, Gallun said.

Monthly rents at Cast Iron's new phase start at $750 for studio units, $1,100 for one-bedroom units, $1,500 for two-bedroom units and $1,800 for three-bedroom units.

The residents in Cast Iron's first phase include both younger professionals without children, as well as older couples whose children are now adults, Gallun said.

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Some residents work in West Bend, a city of around 31,500 people that includes University of Wisconsin-Washington County, West Bend Mutual Insurance Co. and Serigraph Inc. among its largest employers.

Other residents work in such communities as Fond du Lac, Menomonee Falls, Wauwatosa and Milwaukee, Gallun said.

"They're kind of all over," she said.

Cast Iron overlooks the Milwaukee River and is near such attractions as the Museum of Wisconsin Art, the Eisenbahn State Trail and Regner Park. Its amenities include a rooftop courtyard with an outdoor kitchen, firepit and bocce ball court.

The apartments, carved out of former industrial space, feature 12-foot ceilings. All units include stainless steel appliances, stone countertops and washing machines and dryers.

The commercial space at River Shores includes the Kettle Moraine YMCA and restaurant Tochi Ramen, which moved there in 2015 from Shorewood. Downtown West Bend's restaurants are within a short walk.

Meanwhile, River Shores developer Hendricks Commercial Properties LLC recently finalized a lease at Cast Iron's first-floor commercial space with Children's Hospital of Wisconsin for a 5,800-square-foot clinic, said Kyle Gapson, a Hendricks Commercial asset manager.

The clinic is to open by the end of this year. That leaves around 16,000 square feet of commercial space still available for lease at Cast Iron, he said.

Cast Iron's latest phase represents a big step forward for the larger River Shores project.

The Lofts at River Shores and The Point at River Shores were completed in 2005 and 2006, at the peak of the housing market.

After the real estate bubble burst in 2007, followed by a deep recession, condo sales at those two buildings stalled. As of 2013, only 25 of those combined 58 units had been sold.

So, Beloit-based developer Hendricks Commercial began leasing out the condo units to take advantage of strong demand for higher-end rentals.

That demand for more apartments led to Cast Iron's development.

Cast Iron's new apartments are generating more property tax revenue. That is helping reduce the city's debt from helping finance River Shores through a tax incremental financing district.

Starting in 2004, the city spent $14.2 million for new streets, utilities and a bridge over the Milwaukee River at River Shores Drive.

The city's involvement was designed to help redevelop an area left dormant after the closing of West Bend Co., which made cookware and kitchen appliances. The Cast Iron name is an homage to that century-old former factory, which shut down in 2001.

The city had initially expected to pay off its tax financing district debt by 2031, but that was postponed by the delays in developing River Shores. The revised estimated payoff debt is now 2041.

Once the debt is repaid, the property taxes from River Shores will go to the city's general fund, West Bend School District and other local governments.

The 72-acre tax financing district includes 11 town homes and the 61-unit Regency of River Shores senior apartments. Regency's developer is Manitowoc-based Doneff Cos./Hometown Apartment Communities.

River Shores and the district's other improved properties are now valued at $27.3 million, which Cast Iron's second phase will increase, said Mark Piotrowicz, city development director.

Meanwhile, there's space for additional projects, including the former West Bend Co. offices. That three-story building could be used to attract office users, or could be converted to residential space, Gapson said.

"As we finish up the second phase of Cast Iron, we will begin to concentrate on this piece of the project," he said.

Tom Daykin can be reached attdaykin@jrn.com