Milwaukee Athletic Club Restoration Restarts with Apartments Replacing Hotel Rooms

Contractors got the green light this week to restart work on the Milwaukee Athletic Club’s $61 million restoration after the flare-up of the Covid-19 pandemic in March forced its developers to retool the project with apartments instead of hotel rooms.

The historic building, a longtime hub for networking among the Milwaukee business community, is to reopen in fall 2021, according to a Thursday announcement. The top-to-bottom overhaul will modernize the fitness and social amenities reserved for MAC members, convert five floors in to 54 apartments, and restore or create new restaurant and bar venues that will be open to the public.

Milwaukee developers J. Jeffers & Co. and Interstate Development Partners have been working with the nonprofit MAC on the restoration since 2017. They originally planned to put hotel rooms on the eight through 12th floors where apartments are planned now.

The developers were in the midst of completing financing for that in mid-March when Covid-19’s global disruption of the hospitality industry caused investors to back out. After months of regrouping, the new financing package closed, allowing construction to ramp up again.

“We had to act really fast, and think really creatively, and dig really deep to work together, work with our capital partners, work with the Milwaukee Athletic club to find a new path,” said Josh Jeffers, CEO of Jeffers & Co. “We were driving an ocean liner and had to turn the thing on a dime in order to avoid hitting the icebergs. I’ve never done that before and I’m incredibly proud of our team.”

The MAC building was constructed five years after the Titanic sunk. To finance its renovation, Jeffers and Interstate Development president and CEO Tony Janowiec are using about $15 million in public historic restoration tax credits, construction lending from The Ardent Cos. in Atlanta, and up-front investment, some from MAC members.

The initial push for the project was MAC’s need to repair its aging building and modernize its offerings to attract another generation of members. Many areas of the building will remain members-only, including its fitness facilities and a new rooftop deck with a bar, indoor-outdoor spaces for tables and an outdoor space with a turf floor for anything from weddings to sunrise yoga, Janowiec said.

The enclosed racquetball structure on the roof will become virtual golf suites.

People renting the building’s 54 apartments will gain MAC membership and have access to those members-only amenities, Jeffers said.

“Another effort we have working with the Milwaukee Athletic Club and the membership improvement effort is targeting younger professionals, who also tend to be the primary demographic that is moving downtown right now,” Jeffers said. “It works very well to have one more way to attract that younger professional demographic.”

Other parts of the building will open to the general public for the first time, a move that creates new revenue sources while also making the MAC a stronger activity generator. The historic Elephant Room bar area, for example, will open to the public. The first floor also will gain new public amenities and entrances.

About 17,000 square feet of event halls, including the MAC’s historic grand ballroom, will be restored and can be booked by non-MAC members for events, Janowiec said. The MAC, as a nonprofit owner of the building, wasn’t allowed to do that, he said.

“It would’ve violated their not-for-profit status,” Janowiec said. “This ownership regime and the partnership that has been formed for the project allows the Milwaukee Athletic Club to openly market what I would say is among some of the crown jewels of Milwaukee’s event space.”

The redevelopment group led by Jeffers and Janowiec bought the building from the MAC club organization in 2019. Denver hotel operator Sage Hospitality, a co-developer at that time, was part of that purchase and was to run the hotel in the building. Sage remains financially invested in the project, but has stepped back after the hotel rooms were removed from the project plan.

The MAC developers in July 2019 announced that the Driven Elite training business co-founded by Former Green Bay Packers wide receiver Donald Driver would run fitness programs in the MAC. Those fitness programs were for MAC members and potentially people staying at the hotel. With the project plan changing and Covid-19 forcing the developers to dial back projections for the fitness operations, Driven Elite may not operate out of the building.

“Driven Elite had been a part of the active sponsorships with the project, but similar to Sage they’ll be shifting to a more passive role in the investment,” Jeffers said. “We really have to keep working through the Covid situation to see exactly how far we can ramp up athletic facilities and that will end up factoring into the role Driven Elite plays.”

Fitness areas on the building’s fifth through seventh floors will be revamped. A two-story tall space with an Olympic-sized swimming pool on the sixth floor will become a high-ceilinged cardio and strength-training facility. A pool in the MAC’s basement, originally built for female MAC members, will be restored and remain in use.

The basketball court, another two-story tall, rare element to find in the middle floors of a downtown high-rise, will remain for members.

Milwaukee-based CG Schmidt is the lead contractor, and Kahler Slater is the project architect.

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