Talgo to leave Milwaukee

Spanish train manufacturer Talgo Inc. has notified the City of Milwaukee that it will be terminating its lease and moving out of its Century City facility on the north side, taking with it two trains built for the State of Wisconsin that the state has refused to pay for.

Milwaukee Mayor Tom Barrett said the loss of Talgo is “tragic” for the City of Milwaukee and the impoverished neighborhood near the Century City site, which was formerly the home of A.O. Smith and later used by Tower Automotive. Talgo hired dozens of employees at the  facility there that it leased from the city for $29,000 a month.

“These (former Milwaukee Talgo employees) are people who had been out of work, needed jobs and wanted to support their families,” Barrett said. 

It is expected Talgo will wrap up its lease in early June, said Jeff Fleming, spokesman for the City of Milwaukee. Talgo also manufactured two train sets for Oregon at its Milwaukee facility, located at the corner of West Townsend and North 27th streets.

The firm ended manufacturing operations there in 2012 and has been storing the trains in the 133,000-square-foot facility while it has been locked in a legal dispute with the State of Wisconsin, which has refused to pay for the trains that were ordered from Talgo when Jim Doyle was governor. 

“This has become such a partisan issue,” Barrett said. “There was so much venom attached to these trains. I’m sure some people are celebrating (that Talgo is leaving Milwaukee). We are losing out become of the shortsightedness of Madison”

The State of Wisconsin Claims Board this morning is considering a $65.9 million claim filed by Talgo against the state.

Talgo filed the claim in November, and the issue is on the closed session portion of the agenda for today. The Claims Board could not be reached for comment.

In the claim, Talgo accuses Gov. Scott Walker’s administration of failing to live up to a deal to purchase two sets of the company’s trains.

Among other things, the company accused the state of inventing a dispute over testing the trains it built to get out of the contract and damaging its reputation through “the state’s personnel continually defaming Talgo’s professional reputation in every conceivable forum.”

Walker campaigned in 2010 against the proposed high-speed rail line between Madison and Milwaukee that was to include cars built by the Spanish company. The line was nixed before Walker took office, but work continued on the cars, which were to be used on the Hiawatha line between Milwaukee and Chicago. 

Talgo argued in the filing that the DOT quietly shopped the trains to other states as it looked for ways to get out of the contract. The company also claims the state has to immediately repay $70 million in bonds designated for the train sets because it failed to take possession of them.

Meanwhile, The Detroit News has reported that Michigan transportation officials are interested in buying the trains from Talgo until that state’s order for high speed trains comes through in 2018.

“It’s possible that the residents of Michigan will enjoy riding trains from Detroit to Chicago that were built to be used from Milwaukee to Chicago,” Barrett said. “That is a tragedy.”

Despite the loss of Talgo, the city will continue with its efforts to revitalize the Century City site, Barrett said. The city has invested millions of dollars in preparing the Century City site to attract development and has heard from numerous interested businesses, Barrett said.

“I remain very upbeat about Century City,” Barrett said. “For the first time in many years a new building (a 50,000-square-foot light industrial building planned by General Capital Group) will be built on these grounds. I want to create jobs in this neighborhood. All you have to do is look at the poverty surrounding this area to see why we are so intent on creating jobs here. I want you to understand the city is intent on doing anything we can to move this area forward. I don’t want anybody to think we are throwing in the towel on this site.”

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