Ikea considers Oak Creek


Popular furniture retailer Ikea is considering opening its first Wisconsin store in Oak Creek, according to numerous sources.


The Swedish retailer, which has been rumored to be coming to southeastern Wisconsin for more than a decade, would anchor a large mixed-use development on land owned by Northwestern Mutual Life Insurance Co., on the northwest quadrant of West Drexel Avenue and I-94, according to sources.

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An announcement about the development could be made as early as this week, sources say.

Oak Creek Mayor Steve Scaffidi would not comment.

Northwestern Mutual owns 128 acres of land at 1830 W. Drexel Avenue. In November, the city changed its land use plan so 60 of those acres could be developed.

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Before anything moves forward, zoning for the property would still need to be changed. City Administrator Gerald Peterson said he expects Northwestern Mutual to submit zoning changes soon.

Joseph Roth, public affairs manager for Ikea, said the company has recognized customers have wanted a store in the Milwaukee area for a long time.

“We’re looking at land and evaluating our options throughout the Milwaukee area,” Roth said, adding that he is “very familiar with Oak Creek,” but would not confirm the city as a potential site.

One source said a deal for an Oak Creek store has not been finalized yet.

“Anywhere is a potential location for us,” Roth said. “At this point we do not own land in Wisconsin, but we are discussing potential land ownership.”

In January, Scaffidi said Northwestern Mutual was actively trying to find partners for the property and he expected an announcement this spring. Scaffidi said the development could include retail, office and residential.

The development will likely be done through Northwestern Mutual Real Estate, the Milwaukee-based company’s real estate arm, which is one of the largest investors in real estate in the country. Northwestern Mutual Real Estate has a $30 billion to $35 billion real estate investment portfolio composed of 85 percent fixed income and 15 percent equity investments, with investments in commercial mortgages and equity investments across all major property types, including apartments, office, retail and industrial.

During a speech in October, Tom Zale, vice president of real estate investment for Northwestern Mutual, said the company would love to do more retail development.

When asked in an email about Ikea anchoring the mixed-use Oak Creek development, Northwestern Mutual spokesperson, Betsy Hoylman did not directly respond about the store.

“Because our suburban campus straddles the borders of Franklin and Oak Creek, we support economic development in both locations,” she said. “We will continue to work with the local communities to identify the best use of the property we own.”

Ikea currently has 41 stores and sales of $4.6 billion in the United States. According to its website, Ikea is hoping to increase its presence in the Midwest with the opening of several stores in the summer of 2017. The company is expanding at a 12 percent rate through 2017, according to its site.

Ikea typically needs a population base of 2 million people to support a store in a major metropolitan area. Roth said the company also chooses locations 30-40 minutes away from existing stores.

The Schaumburg,, Ill., Ikea store is about 80 miles from Milwaukee. It is 71 miles from Drexel Avenue in Oak Creek. Many real estate sources have speculated that the Oak Creek location does not make sense for Ikea because it is too close to the Chicago area, but the city’s location along I-94 and its distance from Schaumburg, appear to fit the Ikea requirements.

Roth said the company has not yet approved a Wisconsin store. Once land is purchased, Ikea will submit an internal application for the store, he said.

Ikea will open its second store in Ohio next year and its first store in Indiana. The company plans to hire 250 people for its Fischers, Ind. store.

Ikea stores are between 250,000 to 350,000 square feet. The store in West Chester, Ohio is 344,000 square feet. The Schaumburg, Ill., store, which is closest to Milwaukee, is the largest in the U.S. at 450,000 square feet.

In April, Ikea announced it was building a 1.25-million-square-foot distribution center in Joliet, Ill. to serve its Midwest stores.


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