Construction Halt on Milwaukee Mass-Timber Tower Blamed on Tariffs

KEY POINTS

• Work has suddenly halted on the Neutral Edison, a 31-story Mass Timber Construction (MTC) tower in Milwaukee that was to have been the tallest wood structure in the world.

• Milwaukee, a hub for tall mass timber construction, faces uncertainty with the Neutral Edison project, which was part of a broader redevelopment plan including residential, retail, and office spaces.

• Tariffs on Canadian lumber and rising costs of mass timber have significantly impacted MTC projects in the U.S., with the Neutral Edison project highlighting broader challenges in the industry.

Work has suddenly halted on the Neutral Edison, a 31-story Mass Timber Construction (MTC) tower in Milwaukee that was to have been the tallest wood structure in the world.

The project broke ground with great fanfare in June, with The Neutral Project serving as the lead developer. Although designed by Neutral’s in-house team, Hartshorne Plunkard Architecture is named as the firm responsible for the design of the specific building.

Vancouver-based Michael Green Architecture was involved in the broader master plan for The Edison project earlier on.

The Edison project was scheduled for completion by 2027. Contractor C.D. Smith Construction had already installed a tower crane and partially completed the foundation work. It was to contain 378 residential units and approximately 7,200 square feet of retail space.

Neutral estimated the use of mass timber would reduce the building’s embodied carbon footprint by 54 per cent while also cutting operational carbon and energy use by 45 per cent.

Tariffs and Inflation Take a Toll

Tariffs were cited as a contributing factor for the work stoppage by Neutral CEO Nate Helbachl in a statement carried by the Milwaukee Journal Sentinel.

“Recent tariffs and broader inflation have materially increased key input hard costs. During this pause, Neutral is working with C.D. Smith Construction on a comprehensive cost-reduction and value-engineering process," Helbachi said.

"While an exact timeline to resume vertical construction has not yet been determined, Neutral intends to proceed once the value-engineering process is complete.”

Milwaukee a Hub for Mass Timber Construction

Milwaukee has become a hub of tall mass timber construction. The city already boasts what is currently the tallest MTC tower in the world, the 25-story Ascent MKE luxury apartment building.

As reported in October 2024, Neutral also won an earlier RFP to construct a three-phase, $700 million development on a city-owned 2.45-acre site, based on a design initially proposed by Michael Green Architecture.

If it goes ahead as planned, the proposed development of Milwaukee’s Marcus Center for the Performing Arts will feature a 186.8-meter mixed-use MTC tower.

If it goes ahead as planned, the proposed development of Milwaukee’s Marcus Center for the Performing Arts will feature a 186.8-meter mixed-use MTC tower. Image: Michael Green Architects

Plans called for a multi-phase, 1.2-million-square-foot redevelopment scheme surrounding Milwaukee’s Marcus Center for the Performing Arts and on the site of an existing parking garage property.

Initial plans envision 750 residential units, 190,000 square feet of office space, 40,000 square feet of retail space, 300 hotel rooms, parking spaces, and a collection of vibrant public plazas and walkways.

The final phase was to feature what would then become the world’s tallest MTC tower at 55 stories.

Milwaukee's Construction on the Neutral Project Hangs in Balance

Exclusive negotiations had been underway to allow The Neutral Project time to secure financing, finalize the overall scope, and ultimately to secure tenants.

However, a halt in the construction of the Neutral Edison comes as a blow. Its future prospects are under discussion.

Milwaukee Alderman Robert Bauman was quoted as saying, “We could end up with a smaller building, different façade, different amenities, and a different product that cuts the cost.”

Bauman had reportedly been skeptical of the approved three-phase project for some time, and has indicated a preference to reissue the RFPs and possibly break the larger land parcel into three parts.“

"People will kind of promise you anything upfront to get their hands on the land, and then circumstances change, maybe beyond their control, and then we go to try to claw the land back, and ‘Oh sorry, we’re going to keep it.’ So I’m very leery of phased deals.”

Neutral is cautiously optimistic that the project’s financial challenges can be resolved through discussions with C.D. Smith Construction.

The 31-story Neutral Edison tower in Milwaukee was to have been the tallest wood structure in the world. Image: Neutral Group

“Pausing to value-engineer is a difficult but prudent step to safeguard the long-term success of 1005 N. Edison,” said Helbach. “Our focus remains on delivering a resilient, exceptional building for Milwaukee.”

Inflation and Material Costs Hit the Construction Industry

Inflation has impacted the cost of construction materials. The Consumer Price Index (CPI), released after its expected date due to the government shutdown, rose less than expected in September. Still, the core measure, a better indicator of underlying inflation, increased 3% year-over-year, exceeding the Fed’s target by 1%.

ConstructConnect Chief Economist Michael Guckes said construction material prices have risen to over 5 percent from 1 percent at the beginning of the year.

Tariffs are beginning to impact MTC projects in the United States. Anti-dumping and anti-subsidy tariffs on wood from Canada are part of a long-standing dispute between the two countries concerning the timber harvested from Canadian public lands. Nearly 25 per cent of wood products used in the United States are imported from Canada.

Although some concrete and steel are involved in the Edison project, the tariff sensitivity could possibly be connected to imported mass timber components. Steel mill prices have trended downward from their peak in 2021, while ready-mix and other concrete products have stabilized over this period.  

However, lumber and wood products have increased in cost by over 27 per cent since 2020. The cost of Cross Laminated Timber (CLT) per square foot spiked to a 180 percent premium to standard lumber per board foot during 2023. The recent increases in countervailing tariffs on Canadian lumber will likely impact MTC project costs even more in the future.

According to WoodWorks data, 2,524 multi-family, commercial, or institutional mass timber projects were in progress or had been built as of June 2025.

Whether tariffs on imported wood and CLT from Canada affect the viability of projects currently in the planning stage will become clearer in the near future.

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