Komatsu to build $285 million HQ complex at Solvay Coke site

Rendering of the South Harbor Campus. (Credit: Zimmerman Architectural Studios)

Last updated on July 1st, 2019 at 11:03 am

Komatsu Mining Corp. will consolidate two of its Milwaukee-area operations in a $285 million headquarters and manufacturing facility at the former Solvay Coke site in the Milwaukee Harbor District, the company, state and local officials announced Thursday.

The Wisconsin Economic Development Corp. is providing $59.5 million in state income tax credits to support the project and the city of Milwaukee is expected to provide $25 million in assistance through a developer-financed tax incremental financing district.

In exchange, Komatsu is to create 443 new jobs, bringing its employment in the region to around 1,000. The company will also build 170,000 square feet of office space, a 20,000-square-foot museum and training building and 410,000 square feet of manufacturing space.

The new South Harbor Campus project will spread across 2.5 million square feet south of Greenfield Avenue and east of 1st Street. Komatsu will combine operations currently located at its headquarters along West National Avenue and at the Honey Creek Corporate Center.

The Solvay Coke site as seen from Kinnickinnic Avenue.

The project is expected to be complete by 2022.

It is the second major project to be announced along the Kinnickinnic River this year. In August, Brownsville-based construction company Michels Corp. said its regional office would anchor a $100 million mixed-use development at the former Horny Goat Hideaway property in the Bay View neighborhood.

“The new campus provides us opportunity for advancement in state-of-the-art facilities that expand our capabilities on a global scale,” said Jeff Dawes, Komatsu Mining Corp. president and chief executive officer. “Our new facilities will be designed to enhance safety, efficiency and environmental sustainability – all top priorities of Komatsu worldwide, allowing us to better serve our customers and deliver innovative solutions.”

Komatsu America Corp., the Rolling Meadows, Illinois-based subsidiary of Japan-based heavy equipment maker Komatsu Ltd., bought Milwaukee-based mining equipment maker Joy Global Inc. in 2016 for $3.7 billion. Joy was then rebranded as Komatsu Mining Corp.

Before the acquisition, Joy Global had reduced its Milwaukee presence. In 2015, the company closed its Orchard Street plant, relocating motor manufacturing to Longview Texas. In 2016, the company eliminated 130 positions by ending its welding and fabrication in Milwaukee.

But when Komatsu completed its acquisition of Joy, Dawes said the existing capabilities in Milwaukee allowed the company to commit to establishing its headquarters in the region.

Komatsu will consolidate its National Avenue operations to the Harbor District.

“We didn’t buy this company to close it up,” Dawes said at the time. “There’s huge experience here, more than 100 years worth, we want to capitalize on that.”

“With a 134-year history in Milwaukee, Komatsu is one of Wisconsin’s oldest employers, and we thank the company for making a long-term commitment to our state with this significant investment, which will position Komatsu for continued growth,” Gov. Scott Walker said Thursday.

Milwaukee Mayor Tom Barrett added: “Manufacturing is a fundamental part of Milwaukee’s economic history. Komatsu has embraced that history, and the company will help define Milwaukee’s manufacturing future.”

The new headquarters campus will be located about a mile from the location of one of the original Pawling & Harnischfeger machine shops built in 1886 near South First and East Oregon streets, according to the Wisconsin Historical Society. P&H was the surface mining segment of Harnischfeger Industries Inc., which rebranded as Joy Global in 2001 after emerging from bankruptcy.

A far cry from the original machine shop, the new headquarters will have advanced machine, heat treat and fabrication ships, state-of-the-art research and development and robotics labs, a purpose-built office complex and a data solutions center and a global training and conference center.

Komatsu says the new facilities will be built with the goal of having near zero emissions. Solar panels, wind spires, a remotely operated, closed-loop heat-treat system, green spaces, LED lighting and other sustainability efforts will help the company reduce energy consumption by 75 percent and water consumption by 80 percent compared to current operations.

“We are preserving existing jobs, laying the groundwork for new employment opportunities, investing in the workforce of tomorrow, and helping attract talent to the area,” said John Koetz, Komatsu Mining Corp. president of surface mining. “Milwaukee is a great place for manufacturing. We are proud of our history here and excited to start building our future.”

The Solvay Coke site includes a 47-acre property that was first developed in 1902 for manufacturing metallurgical coke for use in the production of steel, foundry coke, coal gas and coal tar, according to University of Wisconsin-Milwaukee historical archives.

At one point a Minnesota developer floated plans for an outlandish $1.5 billion, mixed-use development at the site, but the plans never materialized and the developer went into bankruptcy.

Wisconsin Gas LLC, a predecessor company to WEC Energy Group Inc. ultimately purchased the property out of bankruptcy last year. We Energies, along with East Greenfield Investors LLC, American Natural Resources Co., Cliffs Mining Co. and Maxus Energy Corp., were all deemed as potentially responsible parties for environmental contamination at the site. Work to clean up the site has been going on for years.

Ohio-based Cliffs Mining is currently suing We Energies, alleging the company has broken a 2007 agreement that called for the responsible parties to work together to respond to Environmental Protection Agency claims regarding the site and to share certain costs.

We Energies is seeking to have the lawsuit, filed in the U.S. District Court for Eastern Wisconsin, dismissed.

Brian Manthey, WEC Energy Group director of corporate communications, said the lawsuit is separate from any project at the site.

“We do not expect the lawsuit to represent any challenges to us in connection with the sale or redevelopment of the site,” he said in an email.

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Arthur Thomas
Arthur covers manufacturing for BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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