Andrew Weiland When 2023 began, many were expecting a bumpy ride and an economic recession. But the U.S. economy was resilient, growing throughout the year with the labor market remaining strong and the rate of inflation eventually slowing to a healthy pace. However, many consumers remain stung by the higher prices
[caption id="attachment_442966" align="alignleft" width="300"] Andrew Weiland[/caption]
When 2023 began, many were expecting a bumpy ride and an economic recession. But the U.S. economy was resilient, growing throughout the year with the labor market remaining strong and the rate of inflation eventually slowing to a healthy pace. However, many consumers remain stung by the higher prices from high levels of inflation in 2021, 2022 and earlier in 2023. And higher interest rates, raised by the Fed to fight inflation, have slowed economic activity making it harder for consumers to borrow for major expenses and for businesses to get deals done and do large projects.
Those macroeconomic factors were certainly seen in southeastern Wisconsin as well. Higher interest rates and inflation are making it difficult for some new development projects to move forward. But the local economy also remained resilient and there was no shortage of business activity, and major business news, in the area in 2023.
Going forward, many are now hoping that the Fed will cut interest rates in 2024, providing an economic boost. Are we still in store for a recession, prompted by inflation and interest rate hikes, or will the economy make a soft landing from the COVID and post-COVID strain?
Before we turn the page to 2024 to find that out, it’s time to take a final look back at 2023, with my annual review of the biggest local business stories of the year (you can also check out my lists for the biggest local business stories of 2022, 2021,2020, 2019, 2018, 2017, 2016 and 2015).
Here are my picks for the top local business stories of 2023, in descending order:
18. Herb Kohl dies at 88
[caption id="attachment_582188" align="alignleft" width="300"] Herb Kohl[/caption]
The last major area business news story of 2023 is a tremendous loss for Milwaukee. Former U.S. Senator and Milwaukee Bucks owner Herb Kohl died on Dec. 27 at the age of 88. Kohl deserves more credit than anyone for Milwaukee having an NBA franchise. He bought the Bucks in 1985 to keep the team in Milwaukee. When he finally decided to sell the team he insisted that the buyers commit to keeping the Bucks in Milwaukee. He sold the team in 2014 for $550 million to New York-based billionaires Wesley Edens and Marc Lasry. Then Kohl provided $100 million toward construction of Fiserv Forum. Kohl also contributed $25 million in 1995 to the University of Wisconsin-Madison for construction of the Kohl Center. In 1990 he established the Herb Kohl Education Foundation to provide grants to students, teachers and schools, and it has awarded more than $18 million in grants and scholarships to more than 7,600 people.
17. Marcus Theatres closes its last Milwaukee cinema
Milwaukee-based Marcus Theatres closed three Milwaukee-area cinemas in 2023, including its last location in the city of Milwaukee-the Southgate Cinema on the south side. Marcus also closed the Showtime Cinema in Franklin and the Saukville Cinema. In a statement, the company said that its customers at these three cinemas are better served by “more expansive amenities” at its other cinemas.
16. Briggs & Stratton lays off workers in Wauwatosa, names new CEO
[caption id="attachment_575353" align="alignleft" width="300"] Joe Liotine, chief executive officer, Briggs & Stratton.[/caption]
Wauwatosa-based Briggs & Stratton, which filed for bankruptcy protection in 2020 and was sold that year to a private equity firm, continued to go through major changes in 2023. In January, the company announced it would lay off 160 workers at its Wauwatosa plant because home standby generator production was being moved to Alabama and engine component production was being moved to Missouri. The company’s CEO stepped down in July for personal reasons. Former Whirlpool executive Joe Liotine was named the company’s new CEO. Liotine said, “With our corporate headquarters here, Wauwatosa has been the center of our 115-year history. This city will always be important to us. Our primary research and development and technology hubs are here. However, we have employees located in tech centers, warehouses, and manufacturing locations across the globe, and they all play an essential role in the company’s future.”
15. Potawatomi Casino Hotel’s $190 million upgrade progresses
Major progress was made on $190 million in improvements at Potawatomi Casino Hotel, which are expected to be complete in 2024. Improvements completed this year include a temporary sports book, the Rock & Brews restaurant, two new gaming venues, a new VIP gaming lounge, and more than 300 new slot machines. The permanent sportsbook will open in spring of 2024. The improvements to the casino have created more than 350 jobs.
14. Downtown hotel financial issues
Several hotels in or near downtown Milwaukee faced serious financial problems in 2023.
In December, the 102-room Iron Horse Hotel in Walker’s Point reached a deal with its lender to resolve its Chapter 11 bankruptcy and foreclosure. Its owner, Tim Dixon, filed for bankruptcy in 2022. The hotel went to auction in September, but no bids were worth more than the $24 million debt on the property.
A foreclosure lawsuit was filed in July by a lender against the 132-room Cambria Hotel in downtown Milwaukee. A $17.5 million foreclosure judgement was entered in November. The hotel remains in operation.
The 138-room downtown Milwaukee Hampton Inn & Suites hotel closed in May. The property was taken back by its lender in August and later sold to a new operator in October. However, the hotel still has not reopened.
13. Palermo’s expands into former Tyson Foods plant in Jefferson
Milwaukee-based frozen pizza manufacturer Palermo’s continues to grow. The company in February announced plans to expand into the former Tyson Foods processing plant, which had been shut down in 2021. Palermo’s said it would add new equipment at the Jefferson facility, create more than 200 jobs and add at least two more pizza topping production lines. In September, the company said it had begun production at the Jefferson facility.
12. Parent company of Master Lock announces plans to close Milwaukee plant
Master Lock’s longtime manufacturing presence in Milwaukee’s central city will end next year. In May, Master Lock’s parent company said the Milwaukee plant would be shut down in March of 2024. According to the UAW union representing workers at the plant, the move will eliminate 330 jobs.
11. Baird increases its commitment to downtown Milwaukee
Milwaukee-based financial services firm Baird made significant moves this year to increase its commitment to and its brand presence in downtown. In March, the company agreed to be the naming rights sponsor for the expanded downtown Milwaukee convention center, now known as the Baird Center. The 15-year deal gives a new name to a facility that had gone a decade without a corporate brand attached to it after going through four different names in the 2000s and early 2010s.
Then, in July, Baird extended its lease at the U.S. Bank Center through 2033, while also taking over three additional floors. As the building’s largest tenant, Baird now occupies 21 of 42 floors. As part of that deal, Baird signage has been added to the top of the building.
10. Rite-Hite completes new HQ in Milwaukee
Loading dock equipment manufacturer Rite-Hite this year completed work on its new corporate headquarters in Milwaukee’s Walker’s Point neighborhood, completing the company’s move from Brown Deer. The new Rite-Hite campus includes two building and a parking structure on a 9.5-acre site, which had previously been vacant for many years. About 300 employees had moved into the complex when it was completed earlier this year.
9. 100 East office tower sold to developers who plan conversion to apartments
[caption id="attachment_527670" align="alignleft" width="300"] 100 East[/caption]
Once one of downtown Milwaukee’s top office buildings, the 36-story tower at 100 E. Wisconsin Ave. went into foreclosure after losing several key tenants and seeing its occupancy rate plunge. In April a judge approved the sale of the building, for a modest $28.75 million, to a group led by developer Michael Klein and restauranteur John Vassallo, who plan to convert the building into a luxury apartment tower.
8. Haribo opens Pleasant Prairie plant
After years of planning and construction, gummi bear manufacturer Harbio finally opened its new 500,000-square-foot Pleasant Prairie plant this year, with 200 employees initially working at the facility when it opened in July. Haribo originally announced plans for the plant in 2017, but didn’t break ground to build it until late 2020. It is the Germany-based company’s first North American manufacturing facility. Several additional phases are planned for the plant in the future. Those future phases could eventually bring employment at the complex to more than 1,200. The company plans to produce 132 million pounds of gummi candies each year at the plant.
7. Apartment towers planned around former Boston Store at Mayfair Mall
Milwaukee-based Barrett Lo Visionary Development this year unveiled plans for a $400 million, 918-unit, multi-building apartment development that it plans to build near the former Boston Store at the southern portion of the Mayfair Mall property in Wauwatosa. The project is planned for parking areas around the former Boston Store space and would be built in three phases over 10-12 years.
[caption id="attachment_576277" align="aligncenter" width="1018"] Rendering of Barrett Lo Visionary Development's project planned at Mayfair Mall, facing west.[/caption]
6. Massive development planned in downtown Kenosha
Milwaukee-based real estate developer Cobalt Partners and Fond du Lac-based C.D. Smith Construction Inc. this year unveiled plans for a massive, $450 million development project on a mostly vacant area of downtown Kenosha. The multi-year project could eventually transform roughly 14 acres of the city’s Harbor Park district with more than 1,000 new housing units, 100,000 square feet of retail space, 420,000 square feet of office space, a hotel and green space.
[caption id="attachment_578689" align="aligncenter" width="1280"] Renderings of Cobalt Partners and C.D. Smith’s $450 million development project planned in downtown Kenosha. Credit: Cobalt Partners[/caption]
5. Cardinal Stritch shuts down, campus sold to business owner Gus Ramirez to create private voucher school
In April, Cardinal Stritch university announced that it was shutting down at the end of the school year. The private Catholic university located in Fox Point and Glendale had been in operation since 1937. But declining enrollment and financial issues led the Cardinal Stritch board to close the doors and sell its 40-acre campus.
In July, the Ramirez Family Foundation, led by co-chair Gus Ramirez, the chairman of Waukesha-based manufacturer Husco International, bought the former Cardinal Stritch campus for $24 million with plans to convert it into a northern campus for St. Augustine Preparatory Academy, the private voucher school that the Ramirez family established in 2017 on the south side of Milwaukee. Ramirez initially estimated renovations and improvements to the former Cardinal Stritch campus’ grounds and 12 buildings would cost between $8 million and $10 million. But Aug Prep president and CEO Abby Andrietsch later said the renovations and improvements to the campus will likely cost closer to $25 million. The school has a goal of starting class at the former Cardinal Stritch campus in the fall of 2025 with 315 students in grades K4-6th and 9th, with plans to expand in subsequent years to include more middle and high school grades.
[caption id="attachment_570020" align="aligncenter" width="1280"] An aerial view of the former Cardinal Stritch Campus in Glendale and Fox Point, now owned by the Ramirez Family Foundation.[/caption]
4. Harley Davidson reunion again draws huge crowds
Harley-Davidson celebrated its 120th anniversary in July with a Homecoming Festival that the company said drew record crowds. Green Day and Foo Fighters concerts at Veterans Park attracted a total of more than 80,000 attendees, the company said. Over the four days of the festival, 73,000 motorcycles lined the Harley-Davidson Museum grounds and 130,000 attendees checked out attractions there including food trucks, motorcycle displays, demo ride opportunities, a BMX stunt show, custom and vintage motorcycle shows and musical entertainment, the company said. VISIT Milwaukee said the Harley-Davidson Homecoming Festival had an economic impact of $95 million on the Milwaukee area. Starting in 2024, the Harley-Davidson Homecoming Festival, traditionally held every five years in Milwaukee, will become an annual event in Milwaukee, adding to the city’s typically busy summer schedule.
[caption id="attachment_572676" align="aligncenter" width="1024"] Motorcycles parked at the Harley-Davidson Museum during the company's 120th anniversary celebration.[/caption]
3. Northwestern Mutual to invest $500 million in downtown HQ
[caption id="attachment_564160" align="alignleft" width="300"] A rendering showing the revamped North Office Building on Northwestern Mutual's downtown campus as seen from the east.[/caption]
In February, Northwestern Mutual announced plans for an extensive $500 million interior and exterior renovation of its 18-story North Office Building at its downtown Milwaukee headquarters campus, and the move of nearly 2,000 employees from its Franklin campus to downtown Milwaukee. Construction began by the end of the year and is expected to be complete in 2027. When complete, the North Office Building will resemble the 32-story Northwestern Mutual Tower and Commons building on the company’s headquarters campus that was completed in 2017.
2. $630 million improvement plan approved for American Family Field
After months of debate, the state Legislature and Gov. Tony Evers approved a $630 million plan for future improvements at American Family Field, the home of the Milwaukee Brewers. The funding includes $386.5 million from the state, $135 million combined from the city of Milwaukee and Milwaukee County and $110 million from the Brewers. As part of the deal, the Brewers lease at the stadium, which was to expire in 2030, was extended to 2050.
[caption id="attachment_535900" align="aligncenter" width="1280"] Crowds packed American Family Field during the 2021 MLB playoffs.[/caption]
1. Microsoft begins work on massive data center at Foxconn site in Mount Pleasant
Since 2017, the Foxconn saga has been one of the biggest business news stories in southeastern Wisconsin. At first it was all about the company’s ambitious plans to spend $10 billion to create a huge LCD screen manufacturing complex with 13,000 jobs, and the nearly $4 billion in state and local incentives and infrastructure improvements for the project in Mount Pleasant that would have been provided if it had been fully developed as initially planned. In the years since, the story has become more about how Foxconn’s actual development has fallen far short of its initial plans.
With much of the site assembled for Foxconn still undeveloped, local economic development officials in 2021 pitched it to Intel hoping to convince the company to build a massive semiconductor chip manufacturing complex there. But that effort was unsuccessful, as Intel chose a site in the Columbus, Ohio area instead.
Then Microsoft stepped forward this year with plans to build a large data center on much of the Foxconn site, and later in the year expanded those plans significantly. In March the company announced plans to build a $1 billion data center on a 315-acre site, which was part of the Foxconn development area. Foxconn relinquished its development rights for the site in order for it to be sold by the village to Microsoft, for $50 million.
Microsoft said it expected to have 200 employees in the first phase of its Mount Pleasant data center development. The company also said that when fully developed, by 2034, the data center was expected to have 460 jobs, including 330 first-shift jobs and 130 second-shift jobs.
Then later in the year, Microsoft moved to significantly expand those plans. In November, after construction had already begun on the Microsoft data center, local officials announced that the company planned to purchase an additional 1,030 acres of land for the data center development. Details of the expanded plans weren’t disclosed, but village and county officials said Microsoft planned to invest “billions" of dollars over the next decade on buildings, support structures, systems and equipment.
In December, Microsoft spent $176 million to buy the 1,030 acres from the village and a private landowner.
While the Microsoft data center won’t have anywhere near the economic impact as hoped for with the original Foxconn plans, it is nevertheless an extremely significant economic development project. It will also create a huge property tax revenue boost for the village and county, enabling them to cover the cost of funds borrowed for Foxconn-related infrastructure improvements.
[caption id="attachment_566973" align="aligncenter" width="1280"] The Foxconn campus, including the site where Microsoft is building a massive data center campus. Credit: Curtis Waltz, Aerialscapes.com[/caption]
So there you have it, that’s a wrap for 2023. On to 2024. Wishing for peace and prosperity for you, your business and the Milwaukee area. Happy New Year!
Andrew Weiland is the editor of BizTimes Milwaukee.
