Port director would welcome development around harbor

Organizations:

Kenneth Szalli, director of the Port of Milwaukee, readily acknowledges that much of the privately owned land surrounding the port resembles a war zone that time has forgotten.
For centuries, the Port of Milwaukee has served its maritime trading function — ships and cargo come in, and ships and cargo go out.
Indeed, the Port of Milwaukee provides about 2,000 jobs, creating about $94 million in personnel wages and salaries and generating about $80 million in annual revenues, according to a study by the St. Lawrence Seaway Development Corp.
However, other Great Lakes cities have begun to rethink the missions of their ports and the potential uses of the nearby real estate.
Szalli discussed the Port of Milwaukee’s future in a recent interview with Small Business Times executive editor Steve Jagler. The following are excerpts from the interview.

SBT: The Port of Milwaukee continues to function as a viable Great Lakes commercial port. What is the traffic going in and out of the port?
Szalli: A round number – last year, we did 3 million tons of cargo. Over the last 15 years, tonnage in the port has doubled. We are growing, we are healthy and we continue to do our thing here.

SBT: Has the economic slowdown, with Wisconsin manufacturers losing or shifting so many production jobs to China, affected the port? So many manufacturers are shifting production to China, and the Chinese are then pirating that technology and selling it for lower prices, undercutting the American manufacturers.
Szalli: This is the world conundrum. That’s what it is. This is something we’ve been seeing for a number of years. Interestingly enough, the impact of that on the port is not (significant).

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SBT: I suppose that if a Wisconsin company outsources some of its production to China, that product ultimately has to come back, and the port would still get the business anyway.
Szalli: Yes, it comes back. Although, I have to admit, that as a citizen, I’m concerned about what I see. I think there is kind of a bargain with the devil that goes on.

SBT: What about the steel tariffs that President Bush imposed on foreign steel to protect American steel? He promised the tariffs when he was campaigning in Ohio and Pennsylvania, and so he threw them that bone. But Wisconsin manufacturers have told me their steel prices have gone up by more than 30% since those tariffs were raised. Has that had an impact on the port?
Szalli: That’s a tragedy. You can quote me on this. That’s one of the dumber things Bush has done. The tariffs have cost more jobs in this country than they saved. At the port, we lost two-thirds of our steel tonnage. We went from 175,000 tons to 47,000 last year.

SBT: I understand that what comes in and out of here changes over time, but the essence of the port, of its function as a Great Lakes port, has remained the same, hasn’t it?
Szalli: Yes. Going back probably to when the first guy came here in a canoe. That’s one of the things that made Milwaukee a great city – to bring things in and out by water. It’s a functioning, thriving port.

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SBT: Yes. But have you or the Board of Harbor Commissioners ever given any thought to the notion that the land around the port could be put to a higher, greater use? Today, the land looks like a war zone.
Szalli: First, that’s not port property you were looking at. We only have jurisdiction over our property. On an ongoing basis, we talk to the Department of City Development. Years ago, the port turned over land for public use – the Summerfest grounds.

SBT: Could any more port land be turned over for public use, or has that been cut to the bone?
Szalli: It really is. All the rest is privately owned. For instance, if somebody wanted to go in and buy out Miller Compressing and build an office tower, have at it. They can watch ships come and go on an ongoing basis. That is perfectly acceptable.

SBT: Other cities have developed the land around their ports to become more than just a port. Places like Cleveland, Ohio; Erie, Pa.; and Detroit, Mich.
Szalli: Yes and no. If you look at Cleveland, what they actually did is move their port, to put the Rock ‘n Roll Hall of Fame in, actually. Unfortunately, we don’t have that option here.

SBT: What about the other ports in Wisconsin? Places like Racine, Kenosha and Port Washington are dressing up their ports to be public destinations.
Szalli: Well, they closed their ports for lack of (shipping) business, is what they did. They’re yacht harbors. They were not really functioning ports.

SBT: What about a car ferry? Is it important that Milwaukee be the western destination for a car ferry that goes between Michigan and Wisconsin?
Szalli: Yes. We’ve been heavily involved in the car ferry development and expect to make a positive announcement on that in the next 30 to 60 days. We’ve been working with Sheldon Lubar, and that deal is fundamentally put together. There are a few outstanding issues they need to cover.
This would be a high-speed ferry called Lake Express. It will operate between Milwaukee and Muskegon, and it will carry automobiles and passengers. It would operate from May 1 through Dec. 31, making three roundtrips per day. You’ll get across the lake in about 2-1/2 half hours, dock to dock.
It’ll carry 250 passengers and 46 cars. We’ll build a terminal.

SBT: So, it’s just a matter of working out the details?
Szalli: They are working out the details now. They’ve signed the shipyard contract, and they’re finalizing the long-term financing. The equity is in place.

SBT: From the tourism aspect of it … the ferry will drop people from Michigan off here on the south end of the Port of Milwaukee, at the foot of the Hoan Bridge. There’s a Coast Guard station and a Naval Reserve building. There’s nothing there to make it a tourist destination. Are these poor folks from Michigan just going to be dropped off in the middle of nowhere? Is there any thought of making the area more compatible as the ferry’s landing point?
Szalli: That is Bay View. That is not our jurisdiction. That is the Department of City Development. We will continue to work with the Department of City Development, with the transit people. The plan is not fully developed, but we would request that the county make this a trolley stop.
Some of those things still have to be worked out.

SBT: Would you anticipate discussions about what’s the best use of that surrounding land? Do the Coast Guard station and Naval Reserve building have to be there, or could the land be put to a greater use, to accommodate the car ferry and public lakefront access?
Szalli: In future years? Absolutely. We would think that that would be ripe for discussion.

SBT: The port owns the land on which the Coast Guard sits. What is the lease for that building? What about the lease for the Naval Reserve building?
Szalli: The Naval building, we’re actually redoing that lease right now, but on a more short-term basis. Those leases were 50-year leases. We no longer do those. I think the Coast Guard has 15 more years left on its lease, so that’s not an issue at the moment, which is OK, because it will give the ferry a chance to prove out. We’re hopeful that over time we’ll have two (ferry) ships operating.
Before we get the Coast Guard excited and the Navy excited, we would want to see the direction that (the ferry) moved before we start discomforting them in any respect.
SBT: So there is hope for the south side?
Szalli: I do personally believe that the ferry also could eventually act as a catalyst for Kinnickinnic Avenue.

SBT: You mean Kinnickinnic could eventually be developed with antique shops, cafes, theaters, coffee shops and other businesses to serve the people who would be coming off the ferry?
Szalli: You got it. That’s exactly right. But that’s only going to be if the people in the (Bay View) area want it.

SBT: So, big picture, what about the possibilities? In principle, it seems that you’re saying that there are other types of development around the port that could coexist with the port.
Szalli: I want to be crystal clear on this. I’m not talking about development within the port (property). There are private sites …. I think we can utilize some of these unused places, and I think we’re fully in tune with that and want to see that happen.
(He points to a map of industrial sites around the port) You come down right here, and this is a tragedy. It looks like Berlin after the war, for crying out loud. The Solvay Coke site is a mess.

April 4, 2003 Small Business Times, Milwaukee

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