The developer behind a 31-story timber skyscraper in Downtown Milwaukee is supposedly short $25 million of its budget, with Neutral now working with city officials to ensure the Edison can proceed.
Wood Central reported that Neutral broke ground on construction for the 378-unit luxury apartment tower at 1005 N. Edison St — set to use 100,000 cubic feet of lumber and become North America’s largest timber project under development in July. However, construction paused unexpectedly last month, with local media reporting that the builder, C.D. Smith Construction, had been absent from the site for several weeks.
Whilst much of the foundations have now been poured, and with winter fast approaching, officials met last week to consider contingency plans and options to restart work. It found that the project’s budget was originally around $205 million, with the developer experiencing a “large swing” above expected costs, reaching $230 million thanks to tariffs and inflation creep, Lafayette Crump, commissioner of the city of Milwaukee Department of City Development, told the Zoning, Neighbourhoods and Development Committee. And whilst the full project cost was not disclosed, in January, Neutral announced it had closed on $133.3 million in construction financing from Little Rock, Arkansas‑based Bank OZK and Chicago‑based Pearlmark Real Estate.
It comes as Neutral met with Milwaukee Mayor Cavalier Johnson and Crump in late September to review the pause: “Based on my understanding of what’s happened is, yes, they’ve seen some cost overruns and as they look at being responsible about completing the project over the next couple of years,” Crump said at the meeting. “If those cost overruns do continue at the same pace, it would be challenging to complete the project. So, they’re engaging in value engineering right now to determine what is necessary to still deliver the project that they have promised to investors, lenders and the city.”
Alderman Robert Bauman, chair of the ZND committee, pressed whether value engineering alone could close the roughly $25 million gap. Crump said Neutral intends to pare costs through design and scope adjustments while seeking additional capital from lenders or equity partners. He did not confirm that the developer had reassembled the originally envisioned $205 million in total funding.
Neutral was not represented at the committee meeting and did not immediately respond to requests for comment about the construction pause. The Department of City Development previously selected Neutral’s proposal to redevelop a city‑owned parking garage adjacent to the Marcus Performing Arts Center as part of a broader mixed‑use plan valued at about $700 million that included housing and hotel components. Alderman Bauman asked the department to prepare a new request for proposals for the garage in light of the Edison pause; the committee deferred a vote to give Neutral time to resolve issues at the Edison site.
- To learn more about the impact of the United States’ new deal with the European Union, which could see huge shipments of European glulam and cross-laminated timber hit with 15% tariffs upon entry, click here for Wood Central’s special feature.
