|By Tom Daykin, Milwaukee Journal
SentinelMcClatchy-Tribune Regional News
Jan. 13, 2009 - Gatehouse Capital Corp. has pulled the plug on its Palomar Hotel and condominiums project it had planned for downtown Milwaukee's Park East area, a company spokeswoman said today.
Executives at Dallas-based Gatehouse "with great disappointment" decided they couldn't proceed with the $150 million project, said spokeswoman Carolyn Alvey. The project was to feature 66 condos and a 175-room Kimpton Palomar Hotel.
The project was planned for a county-owned parcel, bordered by W. Juneau and W. McKinley avenues and N. Old World 3rd and N. 4th streets. The block is largely vacant, except for the former Gipfel brewery and the empty Sydney Hih building.
The big decline in demand for downtown condos, and the tightening credit markets, were the main culprits in the project's demise, Marty Collins, Gatehouse chief executive officer, said in a statement.
County officials couldn't be immediately reached for comment.
In November, the County Board voted to extend Gatehouse's purchase option to November 2009. That extension came after David Sullivan, Gatehouse's director of investments and development, told board members that the nation's frozen credit markets had caused a delay in the project.
Gatehouse had planned to begin construction in 2008. Sullivan said last fall that Gatehouse hoped to begin by the second quarter of 2010.
Sullivan also said at that time that Gatehouse would continue to operate its condo sales center at 520 W. McKinley Blvd. and was cutting the price of the condos.
The Park East area, a vacant strip of 16 acres on downtown's northern edge, was created by demolishing the Park East Freeway.
Another county-owned parcel, between N. Milwaukee St. and N. Broadway and E. Lyon St. and E. Ogden Ave., was to be the site of 175 apartments or condominiums and 185,000 square feet of commercial space. But Chicago-based RSC & Associates dropped those plans.
Just over a year ago, the county sold another parcel to RSC. The firm plans to build a 122-room Hyatt Place boutique hotel, a 102-room Hyatt Summerfield Suites extended-stay hotel, 105 apartments and 6,900 square feet of retail space on a block bordered by N. Milwaukee, N. Jefferson and E. Lyon streets and E. Ogden Ave.
But construction, which was to begin this past spring, remains on hold because of the credit crunch.
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