Tag: biggest area business stories of 2016

For many, 2016 will be remembered for the unprecedented U.S. presidential election campaign, which culminated in the election of Donald Trump. But there was plenty of news coming from the southeastern Wisconsin business community this year, as well. As 2016 comes to a close, this is one editor’s opinion of what were the biggest news stories for the year in the region. Johnson Controls merges with Tyco In a mega deal, Glendale-based Johnson Controls, the largest corporation in Wisconsin, merged with Tyco International, creating Johnson Controls plc. The total transaction price was not revealed, but was estimated at $16.5 billion in a Reuters report. With the deal the company is now based in Ireland, but its operating headquarters are in the Milwaukee area and Tyco was expected to move some of its New Jersey operational headquarters employees to Milwaukee. The decision to base the new company outside the U.S. will save Johnson Controls $150 million in taxes annually in what is known as a corporate tax inversion, a move criticized by some politicians, including presidential candidate Hillary Clinton. The merger was expected to result in $1 billion in total savings. Johnson Controls also spun off its automotive seating and interiors business into a new company, called Adient, which will have operational headquarters in Detroit but will also technically be based in Ireland. The Tyco merger and Adient spin-off are the culmination of a years-long transformation of Johnson Controls undertaken by Alex Molinaroli when he became CEO of Johnson Controls. [caption id="attachment_140050" align="alignright" width="404"] Rendering of the Ikea store that will be built in Oak Creek.[/caption] IKEA to build store in Oak Creek BizTimes Milwaukee broke the story that Swedish furniture retailer IKEA was seriously considering plans to open a store in Oak Creek, and within a week an official announcement was made. IKEA will build a 295,000-square-foot store along the west side of I-94, north of Drexel Avenue. Construction is expected to begin in 2017 and be complete in 2018. IKEA has a cult following and its presence could make Oak Creek a shopping destination.     [caption id="attachment_156958" align="alignleft" width="316"] Rendering of the BMO Harris Financial Center.[/caption] BMO Harris to build new downtown office tower Milwaukee-based commercial real estate development firm Irgens will build a 25-story, $137 million office tower for BMO Harris, next to the bank's existing office building in downtown Milwaukee. Irgens will acquire the existing BMO Harris building, built in 1967 as the corporate headquarters for M&I Bank, and redevelop it for a yet to be determined use, once the new office building is complete in 2019 and BMO Harris has moved there. Milwaukee law firm Michael Best & Friedrich will also move to the new building, to be called the BMO Harris Financial Center.   [caption id="attachment_135686" align="alignright" width="362"] Rendering of Milwaukee Bucks Arena in downtown Milwaukee[/caption]   Construction begins for new arena Construction for a new $500 million, 17,000-seat arena in downtown Milwaukee began this summer. A groundbreaking ceremony for the project was held in June. Approximately half of the cost of the arena will be paid for by state and local taxes and the other half by the current and former owners of the Milwaukee Bucks, who said the arena was necessary for the NBA team to remain in Milwaukee long term. The arena construction is expected to be complete in 2018. In addition, construction work began this year for a parking structure for the arena and a practice facility for the Bucks. Demolition work also began this year for the site of the entertainment block that the Bucks ownership will develop across the street from the arena. Downtown Milwaukee development boom The BMO Harris office tower was the most noteworthy project announced in 2016 for downtown Milwaukee, and the arena project was the most noteworthy groundbreaking this year. But there were many others. Downtown development boomed in 2016 with several apartment, hotel and office building developments that were announced, under construction or completed during the year. Several businesses this year announced plans to move operations from the suburbs to downtown including Hammes Company, Bader Rutter and Badger Liquor. Construction of the 32-story, $450 million Northwestern Mutual Tower and Commons continued at the company's downtown headquarters campus. That project will be completed in 2017. Demolition work began this year for the Couture project near the lakefront downtown, as the long-planned 44-story apartment tower project finally moved forward. Construction work on the $122 million Couture project is expected to begin in 2017. [caption id="attachment_158026" align="alignright" width="357"] A rendering of Direct Supply’s planned $60 million campus expansion.[/caption] Direct Supply announces expansion plans Milwaukee-based senior living community supplier Direct Supply in March announced plans for a $60 million expansion at its headquarters campus on the city's far northwest side. Plans call for a 280,000-square-foot building to be constructed in place of an existing single-story building. The company, which employs roughly 1,100 people at its 10-building headquarters campus along North Industrial Road on the city’s northwest side and another 100 at its technology center on the Milwaukee School of Engineering campus downtown, said it plans to add as many as 800 employees over the next seven years. The company also is in the process of expanding its technology center at MSOE [caption id="attachment_139380" align="alignright" width="351"] The northern entrance of Milwaukee Tool’s headquarters expansion is shown in this rendering.[/caption] Milwaukee Tool expansion begins Milwaukee Tool began construction of a 200,000-square-foot, $35 million corporate headquarters expansion project on its campus in Brookfield. The company will receive up to $18 million in state income tax credits over the next six years as an incentive tied to the expansion project. The company has more than tripled its workforce in Brookfield since 2009 and now plans to add another 500 jobs in five years with the expansion. Milwaukee Tool could receive tax credits for up to 592 jobs created and retained over the next six years at its headquarters and its Empire Level facilities in Mukwonago. Several businesses damaged in Sherman Park unrest Several businesses in Milwaukee's Sherman Park neighborhood were damaged in fires set in August when violent protests erupted after a Milwaukee police officer shot and killed 23-year-old suspect Sylville Smith. The worst of the unrest lasted two nights. The damaged, or destroyed, businesses included a BP gas station, an O'Reilly Auto Parts store, and a BMO Harris Bank branch. In December, Dominique Heaggan-Brown, the former Milwaukee police officer who shot Smith, was charged by the Milwaukee County District Attorney's office with first-degree reckless homicide. [caption id="attachment_131563" align="alignright" width="374"] The Mitchell Park Domes[/caption] Mitchell Park Domes close, then reopen, but face uncertain future Milwaukee County officials closed all three of the domes at the Mitchell Park Conservatory in February, a week after a chunk of concrete fell from the ceiling of the Desert Dome. From early February through the end of October, construction crews made repairs to the lattice concrete and steel structures of the Domes. Crews wrapped thousands of concrete-cast joints that make up the structures to prevent more pieces from falling. The Show Dome was reopened April 29, the Tropical Dome was reopened on Sept. 26 and the Desert Dome was reopened on Oct. 29. But the repairs are being viewed by county leaders as a short-term solution. The Domes have been an iconic Milwaukee landmark since they opened in 1967, and their future is now in doubt. A full rebuild of each structure’s concrete frame on their existing foundations and a full replacement of all their glass panels would cost about $64 million, according to a report from Milwaukee-based engineering firm Graef. Other options, which include some basic and some extensive repairs to the existing structures, could cost anywhere from $14 million to $54 million. Graef estimated it would cost between $50 million and $70 million to build a completely new horticultural facility — one that may or may not include dome-shaped structures — at either Mitchell Park or some other site in Milwaukee, should one be selected. Milwaukee's mining equipment industry in decline Two of Milwaukee's largest manufacturers, Joy Global Inc. and Caterpillar, shrank their presence in the area in 2016 as they continue to be decimated by low global commodity prices. In July, Milwaukee-based mining equipment manufacturer Joy Global Inc. announced it had agreed to be acquired by Komatsu America Corp. for $3.7 billion. In May, Joy Global said it was discontinuing its heavy fabrication and welding departments in Milwaukee. Early in the year, Joy Global closed its Orchard Street plant in Milwaukee and moved its motor manufacturing work to Texas. Caterpillar, which acquired South Milwaukee-based Bucyrus International Inc. in 2010, plans to move 200 jobs from South Milwaukee to Arizona. South Milwaukee officials are already making plans in case Caterpillar leaves the community. Meanwhile, Master Lock Co. signed a lease to move its headquarters to the former Caterpillar mining division headquarters complex in Oak Creek. Other big M&A deals completed 2016 was another big year for merger and acquisition activity for area businesses. In addition to the above mentioned Johnson Controls-Tyco merger and Komatsu's acquisition of Joy Global, several other big M&A deals were completed in the region this year:

• Port Washington-based Allen Edmonds Corp. was acquired by Clayton, Missouri-based Famous Footwear parent company Caleres Inc. in a $255 million deal. Allen Edmonds was sold by Los Angeles-based private equity firm Brentwood Advisors, which bought the men's footwear manufacturer in 2011. Allen Edmons has 750 employees in the U.S. and all of them will be retained, according to president and CEO Paul Grangaard.
• Wheaton Franciscan Healthcare officially joined long-time competitor Columbia St. Mary’s, combining its operations and corporate services under the St. Louis-based Ascension Health umbrella.
• McLean, Va.-based Gannett Co. Inc. completed its $280 million acquisition of Milwaukee-based Journal Media Group Inc., the parent company of the Milwaukee Journal Sentinel.
• Milwaukee-based Rexnord Corp. acquired Cambridge International Holdings Corp. for about $210 million.
• Milwaukee-based Douglas Dynamics Inc. completed a $206 million acquisition of substantially all the assets of Kings Park, New York-based Dejana Truck & Utility Equipment Inc.
• Brookfield-based Fiserv Inc. completed a $200 million acquisition of a division of ACI Worldwide.
• Milwaukee-based A.O. Smith Corp. acquired Texas-based water treatment system developer Aquasana Inc. for $87 million.
• Denver-based Molson Coors Brewing Co. completed its $12 billion acquisition of London-based SABMiller plc’s 58 percent stake in MillerCoors LLC. MillerCoors will remain a separate business unit headquartered in Chicago, and will maintain its significant brewing presence in Milwaukee.
• Missouri-based law firm Husch Blackwell acquired Milwaukee-based law firm Whyte Hirschboeck Dudek. No money changed hands in the combination. WHD's shareholders exchanged their ownership for ownership in Husch Blackwell. The combined firm has more than 700 attorneys operating out of 19 U.S. cities and in London.

REV Group HQ moves to Milwaukee Tim Sullivan, former chief executive officer of South Milwaukee-based Bucyrus International Inc., moved Orlando, Fla.-based REV Group Inc. to Milwaukee this year. Sullivan is the CEO of REV Group, which ended the 2016 fiscal year with more than $30 million in profit and nearly $2 billion in revenue. Milwaukee beat out Chicago in attracting the headquarters of the $2 billion company, which Sullivan said was because of Wisconsin’s strong manufacturing heritage. REV Group is bidding on a U.S. Postal Service contract that could create up to 2,500 jobs in Milwaukee to produce 180,000 postal vehicles. The company also plans to go public on the New York Stock Exchange to raise up to $100 million in an initial public offering. Waukesha's request for Lake Michigan water approved The City of Waukesha’s request to withdraw water from Lake Michigan was approved by representatives of the eight Great Lakes governors, after an application process that took several years. The city needs to tap Lake Michigan because its existing supply of water has an unacceptably high level of radium. The closely watched request was the first test of the 2008 Great Lakes Compact, which banned diversions of water to communities outside of the Great Lakes basin. The compact included an exception for communities in counties that straddle the boundaries of the basin. Waukesha is just a few miles to the west of the basin line, which cuts through the eastern portion of Waukesha County. Waukesha will now be able to move forward with plans to withdraw up to 8.2 million gallons of water per day. The city plans to purchase the water from Oak Creek and transport it 27 miles by pipeline. Once used, the water will be treated and returned via the Root River. A group representing more than 120 cities around the Great Lakes is challenging the approval of Waukesha’s request to divert Lake Michigan water. [caption id="attachment_157444" align="alignright" width="386"] Rendering of the new Milwaukee Symphony Orchestra concert hall planned at the Warner Grand Theatre.[/caption] MSO plans move to former Warner Grand Theatre The Milwaukee Symphony Orchestra said an anonymous patron donor is leading an initiative to buy the vacant former Warner Grand Theatre on West Wisconsin Avenue in downtown Milwaukee to restore it and convert it into a new concert hall. The MSO is running a special $120 million fundraising campaign to secure enough money to acquire, design and renovate the theater. That campaign would also pay for an endowment for the symphony. Currently, most MSO performances are held at the Marcus Center for the Performing Arts in downtown Milwaukee. But numerous scheduling conflicts at the Marcus Center force the MSO to play at various other venues for about 16 of its 39-week season. Major improvements planned for Summerfest The 50th edition of Summerfest will be held in 2017, and in 2016 Milwaukee World Festival officials announced major improvement plans to Henry Maier Festival Park. A new U.S. Cellular stage will be built, to replace the existing U.S. Cellular stage on the north end of the festival grounds. The new stage will have a seating capacity of 9,000. Its construction will be completed by 2018. Milwaukee World Festival also announced plans to renovate the Miller Lite Oasis in time for the 2017 Summerfest. Also, Milwaukee World Festival president and CEO Don Smiley told BizTimes Milwaukee this year that plans are in the early stages to replace the Marcus Amphitheater. Wow, what a busy year 2016 was for the Milwaukee area business community! Let me know if you think I've missed anything. Have a Happy New Year and a great 2017!