Last updated on March 6th, 2020 at 12:13 pm
Komatsu Mining Corp. is planning to add 443 jobs over the next 12 years at the $285 million headquarters planned for Milwaukee’s Harbor District, where the company’s total employment is expected to eventually exceed 1,000.
“We are hiring today but we are also working to develop the workforce for tomorrow,” said John Koetz, president of surface mining at Komatsu.
Komatsu is planning to consolidate its West Milwaukee headquarters along West National Avenue and its operations at the Honey Creek Corporate Center at a new South Harbor Campus that will spread across 2.5 million square feet south of Greenfield Avenue and east of 1st Street.
The Wisconsin Economic Development Corp. is providing $59.5 million in state income tax credits to support the project. The tax credits will be tied to Komatsu’s job creation and supply chain targets, said Gov. Scott Walker.
The City of Milwaukee will also create a $15 million tax incremental financing district to extend the riverwalk along the Kinnickinnic River. There will also be a $13 million to $25 million developer-financed TIF created that will be tied to the number of jobs Komatsu adds and how much development is done on the site, said Milwaukee Mayor Tom Barrett.
The South Harbor Campus, which is expected to break ground in 2019 and be operational in 2022, will include 170,000 square feet of office space, a 20,000-square-foot museum and training building and 410,000 square feet of manufacturing space.
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.
Walker said there were early concerns Komatsu would move jobs out of Wisconsin, but it soon became clear the company was committed to the state.
“We look forward to (Komatsu) not only continuing to operate here, but making an almost $300 million investment in a new campus,” Walker said. “We’re thrilled to have a potential value of more than 400 jobs.”
Komatsu approached city officials earlier this year to let officials know they were interested in looking for a new location, Barrett said.
Several sites, including Century City on Milwaukee’s north side, were shown to the company, before it became clear that the 47-acre former Solvay Coke site, located along the Kinnickinnic River south of Greenfield Avenue in the Harbor District, was the right choice, Barrett said.
The property is currently owned by Wisconsin Gas LLC, a predecessor company to WEC Energy Group Inc., which purchased it 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.
On Thursday, Gale Klappa, CEO of WEC Energy Group, said the lawsuit would not have an impact on the Komatsu project.
Barrett agreed, saying the contamination will be mitigated by the time development occurs.
“Everyone came into this with eyes wide open concerning the condition of the property and what needs to be done,” Barrett said. “But there were hours and hours of negotiation as far as the riverwalk itself, who does the cleanup, road and bridge issues. This is the site that best suits (Komatsu’s) needs.”
Jeffrey Dawes, president and CEO of Komatsu, said that as a global company, Komatsu looked at all of its options when considering a new headquarters, but Milwaukee was a clear winner.
“We’ve been part of Milwaukee manufacturing community for 134 years, we’re very proud of heritage,” Dawes said. “We needed a more modern facility to make our product more attractive, more sustainable in the future.”
Komatsu currently leases their space at the Honey Creek Corporate Center. The sprawling operation in West Milwaukee, however, is owned by the company.
Caley Clinton, spokeswoman for Komatsu, said the company is working with West Milwaukee on the future of the site at 4400 W. National Ave. The property occupies about 7 percent of the West Milwaukee’s land mass.
Walker said the location of the West Milwaukee Komatsu facility should make it an easy place to redevelop.
“That corridor, from Miller Park down Miller Park Way is one of the most dynamic areas I’ve seen, even back from the days when I was county executive in terms of retail and commercial opportunities,” Walker said.
“We have a lot of nostalgia when we think of the site by the stadium, but for (Komatsu) to be competitive in a global market, they have to have a state-of-the-art facility,” Walker said. “This is exciting, because we are not only keeping a company, but they are making an more than quarter of a billion dollar investment.”