Train company to lease 133,000 square feet at Tower Automotive site

Spanish train company Talgo Inc. will lease 133,000 square feet of space from the city of Milwaukee in a building at the corner of North 27th Street and Townsend Street in the former Tower Automotive complex.
The company will lease the space for $2.59 per square foot, or $344,470 a year, said Richard “Rocky” Marcoux, commissioner of the Department of City Development. The city is not providing any incentives to Talgo to locate at the Tower site, Marcoux said.
“This is a straight up business deal,” he said.
The city purchased 84 acres of the former 140-acre Tower site last year for $4.5 million. The property is bounded roughly by West Capitol Drive, the Soo Line railroad tracks, West Townsend Street and North 27th Street. The city plans to spend about $30 million to redevelop the property and attract new businesses to a development that city officials call Century City.
Most of the buildings on the former Tower site will be torn down, Marcoux said. But the building that Talgo will occupy was one of the last buildings that was used for manufacturing operations and is in better condition than the rest of the vacant plant, he said.
Talgo will create 125 jobs at the plant to assemble and maintain high speed trains at the former Tower Automotive facility in Milwaukee, chief executive officer Antonio Perez announced this week.
As someone who represents an area and a population that is in dire need of jobs, this is truly exciting and wonderful news,” said Ald. Willie Wade. Part of the former Tower Automotive site is in Wade’s aldermanic district.
Perez said the supply chain for the Milwaukee plant will create an additional 450 jobs to support the operation. Some of those jobs will be created in Wisconsin, he said.
The company may eventually hire even more workers at the Milwaukee plant if more states purchase high speed trains from Talgo. Wisconsin is buying four train sets and Oregon is buying two trains sets from the company. Those trains will be built at the Milwaukee plant.
Perez said Talgo made a promise that the first U.S. state to purchase a high speed train from the company would be the site of an assembly plant for the company’s high speed trains in the U.S. market. Last year, Gov. Jim Doyle’s administration moved to purchase two trains to take advantage of that opportunity.
The Milwaukee facility will assemble Talgo high speed trains for the entire United States, Talgo spokeswoman Nora Friend said. The company hopes to sell trains to other states through President Barack Obama’s $8 billion high speed rail initiative, which includes $810 million to create high speed rail service from Milwaukee to Madison and $12 million to improve the Milwaukee to Chicago rail corridor.
It would be too expensive to build a plant in each state that purchases trains, Friend said. So the company hopes other states do not make that a condition of a train purchase, she said.
The Midwest high speed rail network, if fully developed, would need 65 train sets, which demonstrates the market potential for Talgo’s Milwaukee plant, Doyle said.
“This is going to be a place where a significant number of those trains will be built,” he said. “We are poised to be the nation’s leader in high speed rail manufacturing. Wisconsin will see real economic benefits of high speed rail for generations to come. High speed rail is the future of transportation, and it is a really great thing for the state of Wisconsin to be leading the way.”
In addition to the Tower Automotive site, Talgo considered two sites in Janesville, a site in Racine, a site in Appleton and the Super Steel plant in Milwaukee to assemble its high speed trains.
Perez said the company evaluated all of the sites based on: their economic conditions, technical and operational conditions, cost of living, training facilities in the vacinity availability of skilled workforce and logistical traits including rail access. The company needed a large amount of space with overhead cranes and room for expansion. The company preferred a site near a port, a major airport and near train centers, he said.