Good news, bad news of DRS move


Last updated on July 1st, 2019 at 03:32 pm

Leonardo DRS, a Virginia-based defense contractor, recently announced big plans to expand.

The company plans to build a new 350,000-square-foot high-tech industrial building in Menomonee Falls and will also utilize an existing 120,000-square-foot office building. The facility will be the new headquarters for Leonardo DRS’ Naval Power Systems business.

It’s a $56 million project. The company, which currently has 449 employees in Milwaukee, plans to add 220 new jobs at the facility. That’s the good news. The company considered moving the operations to another state, but decided to stay here, which is also good news.

Now the bad news. Leonardo DRS is one of the few large companies still operating in the central city of Milwaukee. When it moves to Menomonee Falls, it will leave its 65-year-old facility at 4265 N. 30th St. and move its 449 employees out of a neighborhood that badly needs more jobs, not fewer.

The Wisconsin Economic Development Corp. is providing $18.5 million in state income tax credits for the project. WEDC said the tax credits provide an incentive for the company to stay and expand in Wisconsin. In addition, Menomonee Falls will provide $6.4 million.

Some in Milwaukee are wondering why tax incentives are being provided to a company to move seven miles from the central city to a suburb.

But the state and local municipalities are unfortunately forced to compete with other states and other communities that also offer aggressive incentives to attract businesses.

Milwaukee officials have struggled to attract businesses to the central city. They created the Century City Business Park at the large former A.O. Smith Corp. site along West Capitol Drive to provide a destination for businesses to come to the northwest side, but have had limited success in attracting any. Amazon could have built a facility there, but chose Oak Creek instead for a large fulfillment center that will employ 1,500.

Now, DRS plans to move out of the central city and speculation is that Astronautics Corp. of America will soon do the same, perhaps finally moving forward with its long-considered plans to leave its headquarters on North Teutonia Avenue.

Milwaukee’s central city has long had major problems with crime, poverty and unemployment. Those neighborhoods desperately need more business activity. But areas with crime and poverty are exactly what most businesses want to avoid when making site selections.

What to do? To create more job opportunities in Milwaukee’s low-income neighborhoods, city and community leaders should focus their efforts on attracting and assisting locally-based startup businesses, such as Good City Brewing (which plans to add operations at Century City) and the businesses at the Sherman Phoenix.

Large corporations based in other states that have no loyalty to Milwaukee are going to make calculated, strategic decisions on where to locate their operations, and low-income neighborhoods here will not top their list.

But new, local businesses might take a chance on the area.

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Andrew is the editor of BizTimes Milwaukee. He joined BizTimes in 2003, serving as managing editor and real estate reporter for 11 years. A University of Wisconsin-Madison graduate, he is a lifelong resident of the state. He lives in Muskego with his wife, Seng, their son, Zach, and their dog, Hokey. He is an avid sports fan and is a member of the Muskego Athletic Association board of directors.