USPS asks judge to toss developer’s suit seeking eviction from downtown Milwaukee building

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The U.S. Postal Service has asked a federal judge to toss out a developer’s lawsuit seeking to evict the USPS from the sprawling building it occupies in downtown Milwaukee.

The Chicago-based developer R2 Companies filed an eviction notice in August against the USPS, arguing the postal service had let the 1.1 million-square-foot building it has rented for decades fall into disrepair. The case landed in federal court in late September.

In a response filed on Tuesday, the USPS argued its lease with R2 grants it “broad discretion” over ways to make repairs to the property and argued that the federal magistrate judge overseeing the case, Nancy Joseph, should dismiss the dispute.

“Plaintiff cannot, nor does it attempt to, point to any provision in the lease imposing an obligation on the tenant to perform repairs on demand or under any time frame other than what the Postal Service decides, in its sole discretion, is necessary to keep the property in proper condition,” attorneys for the postal service wrote.

One of the lawyers representing R2, Eric Van Schyndle, of the firm Quarles & Brady’s Milwaukee office, declined to comment on Wednesday.

The USPS’ attempt to get the case dismissed is its first public response to R2’s claims. The developer, for its part, has been far less muted.

Matt Garrison, the managing principal of the firm, took to Twitter in August to complain of the building’s condition. In an eviction filing, the developer contended it had found “grass, moss, plants, bird droppings” and a leaky roof and had been asking the USPS for months to repair the damage.

R2 and Polsky Holdings, also of Chicago, bought the building on St. Paul Avenue, which is along the Menominee River and within walking distance of Milwaukee’s Third Ward, in 2015 for $13 million. The USPS was occupying the property even before that transaction.

In 2016, R2 released a plan calling for $100 million worth of work to the building should the postal service move out. The project would turn the structure into a mixed-use complex complete with restaurants, shops, 980,000 square feet of office space and a 282,000-square-foot residential tower on the property’s east end.

But the post office, which has occupied the space since 1970, argues in its court filing that its lease with R2 gives it an option to stay for another two decades and then buy the building at a fixed rate in 2040.

Lawyers for the USPS also argue that the Wisconsin statutes that R2 is invoking in its attempt to evict the agency are trumped by their client’s mandate to provide “efficient and reliable” postal services, and that the USPS’ lease, with its decades’ worth of renewal options, is meant to ensure the postal service isn’t faced with the “costs, burdens, and uncertainties” that could come with a hasty move.