Before deciding to build its first Wisconsin store in Oak Creek, popular Swedish furniture retailer IKEA spent more than a year in discussions with the state Department of Administration about purchasing 26 acres of land at State Fair Park to open a store along I-94 in the city of Milwaukee.
In spring 2014, IKEA contacted the DOA, State Fair Park and officials in the cities of West Allis and Milwaukee to begin discussions about building a store in Milwaukee, said John Yingling, chairman of the State Fair Park board of directors.
“We were certainly willing to listen, but there were a lot of complexities with the fair,” Yingling said. “When a person owns a piece of land, the seller has two choices: yes or no. But state government does not work that way.”
In order for state property to be sold, it has to be deemed surplus by the DOA. Once that happens, the State Building Commission and Joint Finance Committee must agree to the sale. Then a request for proposal is issued. IKEA would not have been guaranteed the land in that process, Yingling said.
Prior to committing to Oak Creek, IKEA spent 10 years considering various privately- and publicly-owned sites along I-94 in Milwaukee County, including State Fair Park, said Joseph Roth, U.S. expansion and property public affairs manager for IKEA.
Roth would not say which other area sites IKEA considered.
“With many sites, there can be some obstacles that are too hard, or too long to overcome, whenever you are trying to purchase a site in terms of a real estate transaction,” Roth said. “But there can also be physical constraints of a site, including hiking trails and infrastructure. Many of the sites we were looking at included a lot of other obstacles. And some came with extraordinary costs that could have fallen on us.”
Jerry Janzer, chief executive officer of Reinhart Boerner Van Deuren s.c., sent several emails between January and May 2015 on behalf of IKEA and local real estate broker Max Rasansky of CBRE, asking the state to investigate relocating the Hank Aaron State Trail, the Park and Ride lot at I-94 and 76th Street and the State Fair RV Park to make room for the store. Those emails were later obtained by BizTimes through an open records request.
Janzer and Rasansky would not respond to interview requests.
The DOA hired Kansas City-based architectural firm Populous to conduct a study showing the impacts of moving the main entrance of State Fair Park, the midway and parking spaces to accommodate IKEA. The $60,000 study showed five options, ranging from a low of a $4.2 million to $4.8 million project to move the midway and parking to the Milwaukee Mile site, and add fairgrounds entrance gates, to a high of $158 million to $212 million to relocate the entire fairgrounds to somewhere else in the state.
Others involved in the meetings, who spoke on condition of anonymity because of confidentiality agreements, said the deal with IKEA at State Fair Park might have gone through if Gov. Scott Walker had pushed for it, but he did not want the political ramifications associated with ending racing at the historic Milwaukee Mile.
Walker announced he was running for president in July 2015. The talks with IKEA ended in late October or early November of 2015, Yingling said.
Walker declined to comment on the meetings with IKEA and the possibility of the store being located in the city of Milwaukee.
Yingling said Walker knew about the negotiations with IKEA, but did not have a strong opinion.
“(Walker) was trying to get IKEA in Milwaukee County (ever) since he was the county executive,” Yingling said. “Is IKEA coming to Milwaukee County? Yes. Was he ultimately successful? Yes.”
On May 5, IKEA announced it would build a 295,000-square-foot store on 29 acres at I-94 and Drexel Avenue in Oak Creek. Walker was notified that day by IKEA and asked if he would attend the official groundbreaking. The store will employ 250 people.
Yingling said the meetings with IKEA showed the State Fair Park board two things: the fair is constrained both land- and budget-wise, and it needs to be very methodical in what it chooses to do next with its real estate (see main story).
“I will say, if you’re a land use planner, a parking lot is not the best use of the property,” Yingling said. “But if you think about it, that store was going to use most of that space for parking too. If (the State Fair Park land along the freeway) is going to be developed, well then that’s a whole different story.”
