MILWAUKEE - When workers tore down the elevated freeway between North Dr. Martin Luther King Drive and Milwaukee’s increasingly busy downtown, local officials decided to bring new shops and offices to this area of warehouses and vacant lots.

So Gorman & Co., Inc., filled the entire first floor of its new Park East Enterprise Lofts here with spaces for small businesses, even though the sidewalk outside is usually empty.

“We don’t think this is a retail location,” said Tom Capp, executive vice president for Gorman, an affordable housing developer based in Madison, Wis. “The appetite for mixed-use from planners and developers is sometimes a little more than the market actually has.”

But since Gorman finished the four-story building in December, all of the first-floor spaces have rented except for a 3,000-square-foot retail space on the corner, for which Gorman is in negotiations with a national chain of deli-style sandwich stores.

Live-work spaces are the secret to Gorman’s success. About a third of the 85 mixed-income apartments at the Lofts have two floors and two doors. Residents can use the lower floor as an office, a shop, or even an artist’s studio and use the upper floor as living space. Each of these workspaces opens straight out onto the sidewalk and even has a shingle-style sign that hangs over the door.

“The whole building looks commercial,” Capp said.

The building also includes common spaces for the residents that are designed to help foster a community of entrepreneurs. For example, the building’s business center includes a large-format computer printer for creating posters and blueprints. The building also includes a 16-seat theater for presentations.

Of the 85 apartments, 68 are reserved for families with incomes topping out at between 50 percent and 60 percent of the AMI. The other 22 apartments rent at market rates. All of these apartments rented as quickly as the developer could finish them. The project has 130 names on its waiting list for new residents. “The concept hit the marketplace at the right time,” Capp said.

This fall, Gorman plans to begin building another 92 live-work apartments, this time set in the historic Pabst Brewery “just a tennis ball’s throw away,” Capp said.

The development cost for Park East was $12.5 million. Gorman used a $4.7 million mortgage from the Wisconsin Housing and Economic Development Authority, along with $7.5 million in equity from the sale of 9 percent LIHTCs to Alliant Capital. Under the rules of the tax credit program, the duplex live-work spaces were treated just like large apartments, so all of the cost to build the units generated tax credits.

That’s just another example of how Gorman got the best of both worlds at the Lofts: all the benefits of supplying housing to a market hungry for it, plus the approval of local planning and zoning officials.

Additional project information, as provided in application by the nominator.

Q. Why does the nominated project deserve to be recognized based on the award criteria of this contest?

A. The Park East Enterprise Lofts development represents the first mixed-use development completed in the new Park East corridor of downtown Milwaukee. Since the restructuring of the city’s downtown expressway interchange, a portion of the city that had previously been unavailable for development needed revitalization.

Gorman and Company sought to create a structure to house residents near downtown Milwaukee at affordable rental rates, and at the same time offer a way to keep young entrepreneurs and small businesses within the city. The project combines mixed-income, mixed-use, and live/workspace for entrepreneurs. Its innovative mix of uses is appropriate for a development inspired by an innovative planning district.

These live/work lofts are specifically designed for entrepreneurs to establish residence and businesses in this vita neighborhood. The building consists of four floors, of which the upper thee are residential lofts. The street level features a mix of residential live/work units, each with a street entrance and frontage, and a mix of amenities, common areas, and retail space.

The generous common areas include two conference rooms and public mezzanine gathering spaces, which provide adequate resources for social networking and private business meetings. The project also features 2,600 square feet of retail space; a movie theater for residents’ personal use and business presentations; a community room with a fireplace, kitchen, and rooftop deck overlooking downtown; and a fully equipped business center. All of these features were designed to attract and retain entrepreneurs who will make significant contributions to the city’s economy for years to come.

In total, the development consists of 85 one-, two-, and three-bedroom units, about 75 percent of which are offered below market rate. In addition to its innovative features, it is among the first in the area to address the need for affordable housing and economic development. This vision has been carried through from the building’s footprint—featuring spaces fronting on a major arterial roadway that provides substantial drive-by exposure—to the units themselves.

Q. How does this project represent an innovative solution to a specific development challenge?

A. The development of the Park East Enterprise Lofts hinged on a visionary, urbanist planning process that included the removal of a highly used expressway spur in the heart of the community. The removal of the highway was a deliberate part of Milwaukee’s planning process, and paved the way for a new urban neighborhood that will border the existing downtown.

The redevelopment plan for the area had just been established by the city when Gorman and Company committed to this project in the fall of 2004. Other businesses are now starting construction, including the new world headquarters for Manpower International across the street.

The design of the building respects both automobile and pedestrian relationships, providing appropriately wide sidewalk and storefront spaces without hindering the flow of automobile traffic. In addition, signage and metalwork on the building set an appropriate scale for pedestrians. The broad signage and urban design of the building relate well to the neighborhood at large, bringing a vital new presence to the area, which complements, rather than disrupts, the tone and tenor of the neighborhood.