It has been a very interesting year for the Milwaukee area business community with no shortage of news.
While downtown Milwaukee is experiencing a historic transformation and revitalization, suburban communities are also attracting major developments. The slow but long recovery for the U.S. economy has continued, but the local manufacturing sector has taken some notable hits.
As 2015 comes to a close, this is one editor’s opinion of what were the biggest business news stories of the year for the region:
Funding approved for new arena in downtown Milwaukee
The Milwaukee Bucks and advocates for a new arena in downtown Milwaukee won a major victory this year getting state and local political bodies to approve public funding for roughly half the cost of a new $500 million arena in downtown Milwaukee. Construction is expected to begin in 2016. The NBA says a new arena was needed to replace the BMO Harris Bradley Center, built in 1988, to keep the Bucks in Milwaukee long term. The current and former Bucks owners will pay for at least half the cost of the arena. The Bucks owners also are planning $500 million in mixed-use development around the arena.
Johnson Controls board stands behind its CEO
In 2015 it came to light that Johnson Controls CEO Alex Molinaroli was involved in a $50 million Ponzi scheme. Molinaroli said he was a victim of the scheme. Last year Molinaroli was found to have been involved in an affair with a consultant to the company. As a result, his annual incentive performance payment was reduced by 20 percent. Despite these scandals, the Johnson Controls board has stood behind Molinaroli. Why? He is leading a massive transformation of the company, which the board evidently supports.
Wisconsin Energy Corp. acquires Integrys
Wisconsin Energy Corp. this year completed a $9 billion acquisition of Chicago-based Integrys Energy Group. It was the largest non-bank acquisition in Wisconsin history. With six utilities serving 4.4 million electric and natural gas customers in four states the company, now known as WEC Energy Group, is now one of the largest utilities, and one of the largest corporations, in the country.
Out of state investors make big real estate deals
With prices for commercial real estate so high in the nation’s primary markets, many national real estate investors have turned to secondary and tertiary markets like Milwaukee. In 2009, only 13.8 percent of the commercial real estate transactions in the Milwaukee area that were $1 million or larger involved out-of-state buyers, according to Xceligent. This year 42.1 percent of the commercial real estate transactions that were $1 million or larger in the Milwaukee area involved out-of-state buyers, up from 32 percent last year, according to Xceligent.
The big deals included: Dallas-based Westmount Realty Capital LLC’s $61 million purchase of a portfolio of 10 industrial buildings in the metro Milwaukee area. Chicago-based Speedwagon Properties paid nearly $43.7 million to purchase the adjacent Southport Plaza and Indian Trail Plaza shopping centers in Kenosha. New York-based Lexington Realty Trust purchased the Stella & Chewy’s headquarters building in Oak Creek for $22.6 million. Chicago-based M & J Wilkow Ltd. purchased the Gas Light Building in downtown Milwaukee for $20.5 million. Chicago-based R2 Companies purchased the downtown Milwaukee post office complex for $13.1 million.
In 2014, New York investor Alexander Levin purchased the Grand Avenue Mall in downtown Milwaukee for $16.5 million in an online auction. He recently sold the mall to a group that includes Milwaukee-based Interstate Parking Co. and Minneapolis-based Hempel Cos. for $24.6 million.
Kroger buys Roundy’s
Cincinnati-based The Kroger Co. acquired Milwaukee-based Roundy’s Inc., the parent company of Pick ’n Save, for $824 million, including $178 million in cash and $646 million in existing Roundy’s debt. Kroger says it will reinvest in Roundy’s Wisconsin stores and that there are no plans to close any of them. Roundy’s will remain headquartered in Milwaukee as a subsidiary of Kroger. Hopefully Kroger lives up to its promises here, but I’m skeptical.
Major plant closings announced
Several plant closings in the region were announced this year, pointing to major challenges facing manufacturers. Manitowoc Cranes plans to close its plant in Port Washington next year, which will eliminate 80 jobs. The Oscar Mayer plant in Madison will close, eliminating 1,000 jobs. A Tyson Foods plant in Jefferson will close, putting 400 people out of work. GE will shut down manufacturing operations in Waukesha, eliminating 350 jobs. Joy Global will close one of its Milwaukee plants, cutting 51 jobs.
Ascension acquires Wheaton Franciscan
Ascension Health, the St. Louis-based parent company of Columbia St. Mary’s, will acquire Wheaton Franciscan Healthcare. The deal could mean major changes for the Milwaukee area health care industry.
Nordstrom opens at Mayfair Mall
The long awaited opening of high-end department store Nordstrom at Mayfair Mall finally happened in October. The store has 330 employees. It also has its own restaurant and an e-bar that serves espresso drinks and snacks.
Downtown streetcar approved
Like it or not, it appears that downtown Milwaukee will get a streetcar. The Common Council approved the controversial $124 million project this year. Two petition drives by opponents that sought to stop the project failed. Construction of the streetcar system is expected to begin in the spring. Some utility relocation work already has begun. Design work for the main downtown line is about 90 percent complete. The line is expected to be operational in 2018.
Northwestern Mutual to build 33-story apartment tower downtown
Northwestern Mutual Life Insurance Co., which is already building a $450 million, 32-story, 1.1 million-square-foot office tower at its downtown Milwaukee headquarters campus, announced plans to also build a 33-story, $100 million mixed-use tower with apartments, a large parking structure and retail space, near its downtown campus.
Downtown Milwaukee housing boom
Speaking of apartment building development downtown, 2015 saw several downtown apartment projects that were completed, started or announced.
Suburban communities attract major mixed-use developments
Significant mixed-use developers are cropping up in several suburban communities. Those projects including Drexel Town Square in Oak Creek, Mayfair Collection in Wauwatosa, White Stone Station in Menomonee Falls, The Corridor in Brookfield and The Corners in Brookfield made major progress in 2015.
PGA Championship at Whistling Straits
The Kohler Co. hosted another successful PGA Championship at its Whistling Straits golf course near Sheboygan. The 2020 Ryder Cup will also be held at Whistling Straits. In 2017, the U.S. Open will be held at Erin Hills in southwest Washington County.
I’m sure I’m missing some other big stories, but that is a lot of action packed into one year. Have a Happy New Year and hope you have a great 2016!