Meet the landlord who wants to evict the Postal Service in Milwaukee

It's an unusual move: the owner of a huge downtown Milwaukee building might evict its only tenant — which holds a lease that could extend until 2040.

But Matt Garrison may not be your typical commercial real estate developer. 

When Garrison recently announced, via Twitter, he was filing an eviction suit against the U.S. Postal Service over its 1-million-square-foot mail processing center at 341 W. St. Paul Ave., he concluded with a Latin phrase: nec temere, nec timide.

Translation: “Neither rashly nor timidly.”

That seems to summarize Garrison's approach in what could speed up his ambitious plans for a building long seen as a strong redevelopment play.

Still, while he likes the building's potential, Garrison said the Postal Service's lease also makes it a valuable investment.

The problem, he said, is that the agency isn't properly maintaining the building.

And, Garrison said, Postal Service officials (who have declined to comment to the news media) haven't responded to his complaints.

So, Garrison filed a lawsuit in Milwaukee County Circuit Court asking a judge to evict the Postal Service from a building the agency has used for about 50 years. 

The suit, filed in August, claims the Postal Service has defaulted on its lease by failing to to make building repairs.

'Green roof'

Garrison's Chicago-based firm, R2 Companies, received a warning sign a year ago.

That's when Emcor Group Inc., a firm hired by the Postal Service to help oversee its properties, sent a notice to Garrison about the St. Paul Avenue facility.

Emcor's notice said the building had a green roof — but not the kind which evokes notions of environmental sustainability.

"There is grass, moss, plants, bird droppings and debris all over the roof," read the notice, filed with the lawsuit.

"There are a couple roof leaks on the north side. Need roof maintenance and repairs," it stated.

Emcor said the repairs should be done within a month. Garrison said it was the Postal Service's responsibility. 

The repairs didn't happen.

In March, a representative of 345 Property Owner LLC, the R2 Companies affiliate that owns the building, toured the property. 

Along with the roof problems, that visit found safety netting installed under concrete ceilings, water leaking through a second-story concrete floor and "obvious signs of concrete deterioration" on the building's east ramp, according to the suit.

Garrison sent an April letter noting the problems to the Postal Service. The agency didn't respond.

So, in July, a lease default notice was sent to the Postal Service — giving the agency until Aug. 15 to make the repairs.

A Postal Service attorney, Kathleen Raven Gurrola, replied that the agency was planning to take action, the suit said.

But, Garrison's deadline passed without the repairs occurring. The lawsuit was filed and is scheduled for an Oct. 2 hearing.

The Postal Service could respond by creating a plan to maintain the building. A city building permit was issued Aug. 30 for repairs to the building's parking ramp and interior concrete ceiling.

In announcing the suit on his Twitter account, @condoshark, Garrison said he was seeking to evict the Postal Service and begin renovations at the massive St. Paul Avenue facility.

"As one of the most visible structures/locations in MKE, this building deserves better," he wrote.

But Garrison, in an interview, acknowledged the Postal Service's long-term lease.

"Our only expectation is that they perform under the lease," he said.

The Postal Service's lease runs at least through March 2025.

With options, the agency can extend the lease until 2040. So, barring an eviction, plans to redevelop the building could be several years away.

'Blown away' by building's potential

To be sure, the Postal Service wants to move out.

The agency in 2009 bought 64 acres in Oak Creek at East College and South Pennsylvania avenues, to build a more efficient mail processing facility. But that project has been on an indefinite hold with the Postal Service facing declining revenue.

The St. Paul Avenue building overlooks the Menomonee River between North Second and North Fifth streets.

It fronts on The Hop, Milwaukee's new streetcar service; is next to the Milwaukee Intermodal Station, which includes Amtrak service to Chicago, and is one block south of I-794.

Also, the site is within a short walk of the Historic Third Ward, the Harley-Davidson Museum and other downtown-area attractions.

R2 Companies and Chicago-based Polsky Holdings bought the property in 2015 for $13.1 million.

In 2016, R2 released conceptual plans to eventually convert the building into roughly 200,000 square feet of stores and restaurants on the first and second floors, 500 parking spaces on the third floor and around 100,000 square feet of offices on the fourth floor. 

That conversion would cost more than $100 million — which R2 would raise if it secured anchor tenants.

R2 hasn't been marketing the space because it doesn't know when it might be available, Garrison said. But he said his firm has received inquiries.

"Anyone who goes in the space is blown away by its potential," he said.

Meanwhile, a lot has happened on downtown's west side in the three years since Garrison and his partners bought the building.

Among other things, the Fiserv Forum recently opened. The Milwaukee Symphony Orchestra's future concert hall is under construction. And the Grand Avenue mall is being redeveloped.

"We liked the location when we bought the property, and we like it even more today," Garrison said.

Garrison was largely unknown in Milwaukee until his firm took control of the Postal Service building. R2 has since invested with the Grand Avenue's owners in acquiring neighboring office and retail space south of West Wisconsin Avenue and east of North Plankinton Avenue.

Chicago roots

Garrison, 42, grew up in the Chicago suburbs, attending New Trier High School, in Winnetka.

He graduated from the University of Illinois in 1998 with a bachelor's degree in English, and got his start in real estate as a condominium sales broker in downtown Chicago.

Garrison has been buying and developing properties for 15 years. His first project was rehabbing a four-unit Chicago apartment building — while living in the basement.

At R2, where he became managing principal in 2015, the portfolio includes a renovated 150,000-square-foot office building in downtown Chicago's River West neighborhood; several office and retail buildings in the West Loop, and Germania Place, which features an events venue in the Gold Coast.

Perhaps the company's most interesting Chicago project — and the one most similar to plans for the Milwaukee building — would redevelop Morton Salt's former packaging facility. That's just east of I-94 (the Kennedy Expressway) and a couple blocks south of West North Avenue, near Goose Island.

R2 plans to create office, retail and entertainment uses within redeveloped warehouse space on the 4.2-acre site, which overlooks the Chicago River's north branch. The firm is finalizing its designs. 

"Post-industrial properties are a part of the fabric of Midwest cities," Garrison said, "and can offer interesting and creative space that can’t be replicated." 

Whether, and when, something like that happens at Milwaukee's Postal Service facility has yet to be seen. But Garrison is happy to have a foothold here.

"We believe in Milwaukee," he said. "The pace of urbanization has been impressive, but we think it is just getting started."

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