City loan to help finance downtown Milwaukee's Moderne apartment high-rise paid off

A city loan used to help finance downtown's Moderne high-rise has been paid off as the developers work to complete their financing for another Milwaukee apartment tower. 

The developers paid off the second of two Moderne loans as of June 1, according to a public notice posted Tuesday. That loan due date was Dec. 31, which itself was an extension from June 2016.

The notice was included with the agenda for Thursday's city Redevelopment Authority board meeting. The board will review a resolution approving the release of collateral for the loan.

That collateral release will help developer Rick Barrett complete his financing for the proposed Couture high-rise on downtown's lakefront.

The Common Council and Mayor Tom Barrett in 2009 approved two loans, totaling $9.3 million, to help Rick Barrett and his partner finance the $55.3 million Moderne.

That 30-story building, with 203 apartments, 16 condominiums and Carson's restaurant, opened in 2012 at 1141 N. Old World 3rd St.

A $2.8 million city loan was paid off in 2014.

But the larger $6.5 million city loan had a $3.1 million balance remaining when its due date was extended two years ago to Dec. 31, 2017.

The extension was needed because the Moderne's condos did not sell as quickly as expected.

The remaining units have since been sold, and the apartments are 95 percent occupied, Barrett said.

The city loans earned $2.67 million of interest payments, he said, while the Moderne's annual property tax payments total $1.4 million.

Also, the Moderne played a big role in boosting the overall redevelopment of downtown's west side, said Rocky Marcoux, city development commissioner.

That project, along with ManpowerGroup's relocated headquarters from Glendale and the redevelopment of the former Pabst brewery, helped pave the way for the future Milwaukee Bucks arena and other new developments, Marcoux said.

"It basically solidified development to the west," he said.

The Moderne loans were borrowed by two groups organized by Rick Barrett: Milwaukee Moderne Residences LLC and Milwaukee Moderne LLC. 

Their collateral includes a subordinated mortgage on the Moderne's apartment, parking and retail portions; a first mortgage on the condominium units; and personal guarantees from Barrett and his partner, Tan Lo.

Their firm, Barrett Lo Visionary Development LLC, plans to begin construction by October on the 44-story Couture high-rise, Marcoux said in April.

The Couture is to be built at 909 E. Michigan St. The site once held a Milwaukee County Transit System facility that Barrett Lo demolished last year after buying the property from Milwaukee County.

The Couture is to include 312 high-end apartments, 52,000 square feet of restaurant and retail space and a transit concourse featuring the new downtown streetcar.

The lakefront loop from the main streetcar line to the Couture and back is under construction.

It would take about 30 months to complete the Couture.

The firm is ready to begin construction as soon as it obtains a loan guarantee from the U.S. Department of Housing and Urban Development, Teig Whaley-Smith, county director of administrative services, said in May.

A similar loan guarantee was used to help finance the Moderne.

A HUD spokeswoman couldn't immediately be reached for an update on the status of that loan guarantee application. 

Tom Daykin can be emailed at tdaykin@jrn.com and followed on Instagram, Twitter and Facebook.