Citing tariffs and escalating material costs, the developer of The Edison, a $200 million, 32-story mass timber-concrete hybrid building in Milwaukee has paused the project planned to be one of the world’s tallest buildings of its type 

Neutral, the Madison, Wis.-based developer of the 378-unit residential building said in a statement that it has temporarily halted construction “to address cost pressures and optimize the project’s budget. Recent tariffs and broader inflation have materially increased key input hard costs.” 

The developer gave no timetime for when construction could restart by contractor C.D. Smith Construction, and Thornton Tomasetti, the structural engineer, but said in a statement that during this pause, it is working with the contractor “on a comprehensive cost-reduction and value-engineering process.”

Ground was broken on the project in the spring and the foundation is complete, Neutral said, adding that the team will maintain the site and safeguard completed work during the pause. “While an exact timeline to resume vertical construction has not yet been determined, Neutral intends to proceed once the value-engineering process is complete,” the company stated. 

“Pausing to value-engineer is a difficult but prudent step to safeguard the [project] long-term,” said Nate Helbach, CEO of Neutral.

Milwaukee Alderman Bob Bauman, who represents the district where The Edison would be built, said his reaction to the news is “surprise, disappointment and concern that it will never get finished.” 

He said Neutral had not specified which material—timber or concrete—was pushing up costs and is worried that the finished product may now be lesser than what had been proposed. 

“When I hear value engineering that means dumbing it down—making it shorter, or with less luxury finishes or amenities,” he said. 

If the building is revised to be shorter he said it would likely not need additional city review. “If they want to go from 31 stories to 10 stories that’s probably allowed,” Bauman said. 

Fed Novikov, director of product strategy and marketing for Neutral, dispelled a notion being reported that the developer was at odds with its contractor. “There are no issues between Neutral and C.D. Smith,” he said. “We don’t know where these rumors came from, they are false.” 

Related to the pause, Bauman said, “I have to imagine there’s a lot of consternation among lenders, equity value investors, contractors and subcontractors who are concerned they won’t get paid. I see danger signs all over this.” 

He said he has seen a tower crane on the site. “If we see that tower crane come down then we know we really have a problem,” Bauman said. 

ENR reported in January that Neutral had secured $133 million in construction financing for the project that also is planned to have two public plazas on the north and south ends of the development site, 7,000 sq ft of retail space on the tower’s first floor, an amenity floor and 288 parking spaces. 

On its website Thornton Tomasetti notes that The Edison, set to finish in 2027, is “on track to become the world’s tallest timber building
in 2027, when the residential project tops out at 375 ft,” ahead of the Ascent, which is also in Milwaukee and 25 stories.

“To achieve
this record, the project employed several innovations – many based on
what we learned designing Ascent,” which is currently the tallest and located about one mile away, the company said. “We used our Advanced Timber
Delivery process, delivering our structural design model to the
fabricator and we worked with the contractor to develop a hybrid system
that encases all connections in concrete to enhance constructrability
and fire protection,” the website notes. 

C.D. Smith did not immediately respond to a request for comment.