Commercial development surges near state line

Webster defines "megalopolis" as an urban region consisting of several large, adjoining cities. That aptly describes the busy stretch of land between Chicago and Milwaukee along Interstate 94.
The state line has been blurred because of the numerous Illinois and Wisconsin commuters driving back and forth to their jobs in the neighboring state. That trend is fueling commercial real estate development activity in the Kenosha County corridor, where a company can serve both the Milwaukee and Chicago markets.
"Over the past 12 months our development activity along the corridor has been significant and impressive … We’re in the process of convincing corporations from northern Illinois to relocate into some of our business parks in the I-94 corridor," says Todd Rizzo, regional director for Wispark LLC.
Rizzo’s company, a subsidiary of Milwaukee-based Wisconsin Energy Corp., has an office in Kenosha.
"Our area has several things going for it. Lake County, just south of the state line in Illinois, has a shortage of available property. There just aren’t any large tracts of land in that area available for immediate development," Rizzo says.
"As businesses need to become more cost-conscious and competitive, they’re always looking for lower cost places to do businesses in. That’s what locations in Kenosha County offer. The cost of living here is less. Land costs here are less, as are real estate taxes. Electricity rates in Wisconsin are lower. Our overall labor costs are lower. Likewise, our worker’s compensation costs. That all adds up to a package that makes a lot of sense for companies in Illinois and other states," he says.
"Companies need to be forward-thinking. They need to make sure they’re in the right location for the next 20 years or so. They need to make the right decisions so they can stay competitive," he says.
Indeed, Wispark has been active in the Kenosha corridor:
— In the Lakeview Corporate Park in Kenosha, Wispark constructed a 250,000-square-foot, build-to-suit structure for Volkswagen Audi, which opened for business as a parts and distribution center in July. The automobile company moved 80 of its employees from Lincolnshire, Ill., and will be hiring 20 more.
— Wispark sold a 163,300-square-foot building to Yamaha Motor Corp. in the same park. Yamaha’s 55 employees are now in the building, and the company plans to hire more.
— Earlier this year, Wispark committed to build a 100,000-square-foot structure for a Canadian company, CPI Plastics. CPI signed the lease in January, and its 123 employees will be occupying the building.
— Last fall, Wispark finished a 600,000 square foot warehouse/distribution center for S.C. Johnson & Son Inc. "Early this year, they signed an agreement with us to expand that building to just under 900,000 square feet. That’s under construction right now."
According to Rizzo, those were four "fairly large" transactions in a marketplace that has been somewhat slow.
"The industrial sector has been down for the last 12 months or so because of the economy. There hadn’t been a lot of demand out there, so for us to land those was pretty exciting," he says.
The Business Park of Kenosha, located less than a mile east of I-94 on Highway 158, has also seen activity lately.
The park is a partnership of Wispark, the City of Kenosha and the Kenosha Area Business Alliance. The first phase of the park is 95 percent sold out, with only three small parcels of land left.
Ken-Mac Metals, a Cleveland-based company, signed a lease with another developer that built a 50,000-square-foot building on almost seven acres at the Kenosha site.
"Just recently, the Martin Peterson Co., an HVAC and plumbing contractor and fabricator, developed a 70,000-square-foot building, and Klein Dickert, a glass fabricator, just finished building a new 30,000-square-foot facility that they had started working on last fall," Rizzo says.
Wispark owns 104 acres on the west and adjacent to Business Park of Kenosha and is preparing to open it as Phase 2.
Tony Bareta, senior vice president with NAI MLG Commercial in Brookfield, also sees a lot of movement of industrial and retail businesses into Kenosha.
"We have several multi-tenant units near the airport, populated by some companies from Illinois and New Jersey," he says. "We have a client in the hospitality area looking seriously to build here along Highway 50. And we have a 300,000-square-foot building currently with a short-term tenant, but are looking for a permanent tenant."
Cecilia Lucas of the Kenosha Area Business Alliance says one of the corridor’s largest real estate development projects may be on the horizon.
"The Prime Outlets shopping center along I-94 has expanded, as has the Bristol Renaissance Fair," Lucas says. "West on Highway 50 Strawberry Hills, there’s an ambitious new development that will start construction next year. They’re still in the permit-gathering stage, but when it’s completed, it will consist of a 1,000-home complex, golf course and retail center."

Aug. 22, 2003 Small Business Times, by Jordan Fox, for SBT

Milwaukee Public Market at a glance

Mission: To provide opportunities for a variety of independent, locally owned businesses to sell fresh foods, including locally grown organic items, produce, meat, poultry, seafood, cheese and specialty foods.
Location: Northeast corner of Water Street and St. Paul Avenue, directly south of Interstate 94.
Projected cost: $10 million
Money raised so far: $5.5 million
Sponsoring agency: Historic Third Ward Association, a nonprofit organization.
Site plan: 32,000 square feet, including a 22,000-square-foot floor plan and a mezzanine level.
Targeted groundbreaking date: Fall of 2003.
Targeted completion date: Spring of 2005.
Designer: The Kubala Washatko Architects Inc., Cedarburg.
General contractor: CG Schmidt Inc., Milwaukee.
Web site: www.milwaukeepublicmarket.org

Criteria for federal grant for Public Market
The Economic Development Administration of the US Department of Commerce will evaluate the Milwaukee Public Market on seven criteria. At stake is a $2.5 million federal grant. The criteria includes:
(1) Is the project market-based? Does it build on the community’s assets?
(2) Is the project proactive in nature? Does it enhance the standard of living in a community?
(3) Does the project look beyond the immediate economic horizon? Does it help diversify the local economy? Is it economically sustainable?
(4) Does the project maximize the private sector investment? Would the project not proceed without the public funding?
(5) Does the project have a high probability of success? Does it have strong local political and private support?
(6) Would the project create higher-skilled and higher-waged jobs?
(7) Would the project maximize taxpayers’ investment?

Cardinal Stritch University breaking ground for extensive renovation

Cardinal Stritch University in Fox Point will break ground for a $14 million renovation of Bonaventure Hall, its primary student services building, on Sept. 9.
The 72,000-square-foot expansion will increase the space of the current building by almost two and one-half times and allow the university to better serve its 7,600 students.
The three-level expansion will include an Information Commons on the lower level with the latest computer and digital technology, including smart classrooms, computer labs and study rooms.
The Student Service Atrium and Suite and Conference Center on the level one will house the university’s administrative services area for students and provide space for conferences and seminars.
The third level will offer expanded quarters for the university’s College of Business and the College of Arts and Sciences.
Construction is scheduled to be completed in 18 months.

Aug. 22, 2003 Small Business Times, Milwaukee

Human capital
Find a way to measure how employees impact the bottom line

By Daniel Schroeder, for SBT

Question: I’m the human resources manager for a health care organization. We’re in the middle of a 12-month-long management-development program. We’re exploring topics like systems thinking, problem solving and decision-making, teamwork, etc. We’ve spent a lot of time talking about how we measure up – across departments, across offices and within the industry. We’re trying to improve our processes and looking for the data to tell us how we’re doing. Here’s my issue: In our training sessions, we’re being told that our people, not money, equipment, etc. are our most important resource. We’re told that our people ultimately influence how successful we are. Yet, when we explore the various process improvement and measurement methods, we seem to focus on financial or customer data. This doesn’t make sense to me. Aren’t the employees the ones who drive performance in these other areas? Why aren’t we talking about how to better measure the impact of our people? How can I, as the HR manager, begin to make this happen?

Answer: In my experience, your situation is a common one. Traditionally, when organizations have tried to measure success, they have done so in terms of tangible resources like money, buildings, machinery/equipment, etc.
Employees tend to be viewed as a "soft" resource, difficult if not impossible to measure in terms of the overall profit picture. Yet, given that employees can account for 40% or so of an organization’s operating expense, from my vantage point it is absolutely imperative that vigorous measurement be pursued in this area.
Too often, however, I have found that this is not the case. Too often I have that a measurement hole exists when it comes to evaluating the impact of human capital – the amalgamation of capabilities and potentialities that employees bring to the table.
And this is in spite of the fact that The Balanced Scorecard (Kaplan and Norton) has become the latest bandwagon that business seems to be jumping on.
At the core of this approach is the idea that high performance organizations have a broader view of success than merely the bottom line – that they measure performance in the areas of finance, customers, operations/processes, and learning and growth.
My experience tells me that many organizations do a credible job of measuring financial, customer and operations performance. Few organizations, it seems, do a very good job of measuring learning and growth. Part of the problem, of course, is that at the heart of evaluating employee learning and growth is the comprehensive evaluation of training programs.
As I have discussed in previous articles, this is a difficult proposition that involves answering questions other than the standard, "Did the employees like the training?" Answers to other relevant questions must be vigorously pursued – "Did they learn it?" "Did they apply it?" "Did applying it make any difference?" And so on.
Beyond that observation, my take on The Balanced Scorecard is that the learning and growth factor is too narrow (i.e., there is more to the people processes of the organization than how much money is spent on training). It does not adequately capture what is encompassed by the organization’s human capital.
From my perspective, the learning and growth factor should be broadened to encompass the total impact of human capital. To do so, it should include measuring the impact that accrues from the activities of acquiring, maintaining, and retaining employees, in addition to developing them (i.e., learning and growth).
How many managers do you know who do a really good job in each of these areas?
How are you doing in these areas?
Researchers who have studied what it takes to measure human capital suggest one way to get started is to think in terms of the value added by each of the key activities (i.e., acquiring, maintaining, developing, and retaining employees). To do so, using indicators that allow change to be easily tracked and documented is most effective-cost, time, quantity, error/accuracy/performance, and reaction/satisfaction.
As an example, to develop a comprehensive scorecard for the activity of acquiring employees, you might gather the following data:
Cost – Cost per employee hired
Time – Time to fill open jobs
Quantity – No. of employees hired
Error/Performance – Job performance rating of employees hired
Reaction/Satisfaction – Level of manager satisfaction regarding employees hired

Or how about this example for measuring the impact of retaining employees:
Cost – Cost of employee turnover
Time – Turnover by length of service by employees
Quantity – Voluntary turnover rate
Error/Performance – Readiness level
Reaction/Satisfaction – Turnover reasons

Similar examples could be offered for the other two activities of maintaining and developing employees, but you get the idea. It is actually a very straightforward concept – measure the important aspects of your work so that you know if you are doing well or not-so-well.
Let me take this one step further. Let me suggest that if you really want to support the business, really want to be part of the critical discussions, etc., you need to attach the data you gather to the organization’s "leading indicators."
For most organizations, the leading indicators have to do with profit/loss, percentage of market share, production/operational efficiency, customer satisfaction and retention, etc.
Let me make a bold statement: If the data that you gather do not relate to the organization’s leading indicators, then you might as well not bother gathering the data in the first place.
So, let me cut to the chase – Stop measuring transactions! Start measuring "what matters!" Start measuring how the activities in which you engage relate to the goals the organization wishes to achieve.
So, if the organization is looking to provide service that "excites" its customers, then you need to think about measuring how what you are doing bears upon this important outcome. For example:

Acquiring- Define customer service competencies and institute a selection method that accurately differentiates service-minded from non-service-minded candidates

Maintaining – Develop and deploy a competency-based performance management program that reinforces the critical customer service dimensions

Developing – Offer performance-based instruction that transfers beyond the training room to where it matters the most-in exchanges with customers

Retaining – Recognize and incent employees who "wow" the customers, making use of a mix of monetary and non-monetary methods

You can see that by engaging in these practices and measuring how you are doing (using the standards of cost, time, quantity, error/performance, and reaction/satisfaction), you are linking and aligning with an important organizational outcome. In short, you are no longer a bystander, but rather a "player."
Voltaire observed that, "Doubt is not a pleasant condition but certainty is."
As the HR manager, do you doubt the contribution that your work area offers to the organization’s overall performance?
To proceed with greater certainty, start measuring your organization’s human capital. Start measuring your key HR activities. Start linking and aligning your key HR activities with the organization’s leading indicators.

Daniel Schroeder, Ph.D., of Organization Development Consultants Inc. (ODC) in Brookfield, provides "HR Connection." Small Business Times readers who would like to see an issue addressed in an article may reach him at 262-827-1901, via fax at 262-827-8383, via e-mail at chroeder@odcons.com or via the Internet at www.odcons.com.

Aug. 22, 2003 Small Business Times, Milwaukee

Southeastern Wisconsin MBA directory
Cardinal Stritch University
www.stritch.edu
Full-time MBA
Location: Milwaukee/Brookfield, Kenosha/Racine, Green Bay/Appleton
Focus: generalist degree
Program length: 2.5 years
Classes offered: One night
per week
Accreditation: Association of Collegiate Business Schools and Programs (ACBSP), North Central Association of Schools and Colleges
Total cost: Part-time tuition $350 per credit
Typical class size: 14-22
Unique attributes:
First non-traditional program in the country to receive accreditation under ACBSP’s accreditation under its Option B (Baldrige Quality Criteria).
Carthage College
www.loyolamba.com
Executive MBA from Loyola University
Location: Kenosha
Focus: general management with international, ethics and leadership components
Program length: 18 months
Classes offered: Every other Friday and Saturday, three one-week in-residence classroom sessions and eight-day international study trip
Accreditation: AACSB (the International Association for Management Education), and the North Central Association for Colleges and Secondary Schools.
Total cost: $52,500
Typical class size: 27
Unique attributes: Loyola program consistently ranked among the top 10% of all MBA programs in the country and listed as the “12th Best Part-Time MBA Program” by U.S. News and World Report. The program combines renowned large university’s curriculum and professors with small college personal service. The Loyola EMBA Program aims to meet the needs of mid-career executives preparing for senior management, by enhancing their business skills and sharpen their analytical abilities by combining course work with day-to-day professional experiences. Tuition includes housing and meal during Carthage residency, meals and snacks on class days, books and materials, international trip and new IBM laptop computer.
Concordia University
www.cuw.edu
Full-time or Part-time MBA
Location: Mequon
Focus: health care administration, finance, church administration, international business (also taught in Chinese), human resource management, managerial communication, management information systems, public administration, risk management, marketing, general management
Program length: average of 26 months
Classes offered: Evenings, one night per week
Accreditation: Higher Learning Commission and a member of the North Central Association
Total cost: $400 per credit
Typical class size:
12:1 student ratio
Unique attributes:
Christian institution; flexible class schedule; distance learning classes always an option; no thesis required for graduation
Concordia’s
Distance-learning MBA
Focus: health care administration, finance, church administration, international business (also taught in Chinese), human resources management, managerial communication, management information systems, public administration, risk management, marketing, general management
Program length: average of 26 months
Accreditation: Higher Learning Commission and a member of the North Central Association
Total cost: $400 per credit
Keller Graduate School of Management of DeVry University
www.keller.edu
Full-time, Part-time, On-Line MBA
Location: Milwaukee, Waukesha / Brookfield
Focus: Accounting and Finance, eCommerce Management, General Management, Human Resources Management, Project Management, Information Systems Management, International Business, Marketing Management, Public Administration, and Telecommunications Management
Program length: 1.5 to 2.5 years
Classes offered:
Eight-week terms; Classes meet one evening per week or Saturday morning; on-line option available for all courses.
Accreditation: North Central Association
Total cost: $1,510 per course
Typical class size: 15-20 students
Unique attributes:
Keller’s on-line program is ranked in the Top 5 by Computer World Magazine; most courses have no prerequisites; after graduation students may return and take graduate courses for personal and professional enrichment at $150 per course.
Lakeland College
www.lakeland.edu
Part-time MBA with distance-learning option
Location: Sheboygan, Green Bay, Milwaukee, Madison, Neenah, Wisconsin Rapids and
Chippewa Falls
Focus: Accounting, International business
Program length: 3 – 4 years
Classes offered: Evenings, one night per week
Accreditation: North Central Association
Total cost: $ 930 per 3-credit course, $ 960 per 3-credit
online course
Typical class size: 20
Unique attributes: Students can take courses to try program before going through the admission process
Marquette University
www.mu.edu
Part-time, full-time or Executive MBA
MU’s part-time MBA
Location: Milwaukee, Kohler, Waukesha
Focus: marketing, economics, accounting, leadership, quality management, finance, international business
Program length: 36 months
Classes offered: Evenings and/or Saturdays
Accreditation: AACSB
Total cost: $630 per credit (overall cost $24,000-$31,500)
Typical class size: 26;
off-site 35-40
Unique attributes: Regular, tenured faculty teach at off-campus sites; small class sizes; believe personal attention is important; Ranked #11 by US News and World Report 2004 Edition of America’s Best Graduate Schools.
MU’s full-time MBA
Location: Milwaukee
Focus: marketing, economics, accounting, leadership, quality management, finance, international business
Program length: 18 months
Classes offered: Evenings and/or Saturdays
Accreditation: AACSB
Total cost: $630 per credit (overall cost $24,000-$31,500)
Typical class size: 26;
off-site 35-40
MU’s full-time, part-time Executive MBA
Location: Milwaukee
Focus: International business
Program length: 17 months
Classes offered: All day Friday and Saturday every other week
Accreditation: AACSB
Total cost: $36,500
all encompassing
Typical class size: 30
Unique attributes: Tuition includes books, food, laptop computer, and 9-day international trip
University of Phoenix – Milwaukee
www.phoenix.edu
Concentrated MBA
Location: Brookfield
Focus: Technology management, general management, e-business, health care management, accounting
Program length: 18 months –
2 years
Classes offered: One night
per week
Accreditation: Higher Learning Commission of the North Central Association
Total cost: $395 per credit hour
Typical class size: 12-14
Unique attributes: Students must be working adults and be able to apply what they do for a living in the classroom

Phoenix’s distance/Online MBA
Focus: General management, accounting, e-business, global management, health care management, technology management
Program length: 18 months –
2 years
Accreditation: Higher Learning Commission of the North Central Association
Total cost: $518 per credit hour
Unique attributes: One of the most recognized online programs in the country, very easy to complete courses from anywhere.
Upper Iowa University
www.uiu.edu
Distance/Online MBA
Focus: Accounting, Quality Management, Human Resource Management, Organizational Development, and Global Business
Program length: just over 2 years
Accreditation: The Higher Learning Commission
Cost: $311 per credit hour
Unique attributes: Program is completely online no residential requirements. Asynchronous using Outlook Express, program is user-friendly.
UW-Madison
www.bus.wisc.edu/graduateprograms
Part-time, full-time or Executive MBA
Madison’s full-time MBA
Location: Madison
Focus: Accounting and Information Systems; Arts Administration; Entrepreneurship; Finance-Applied Corporate Finance; Finance, Investment and Banking; Finance-Applied Security Analysis; General Management; Information Systems Analysis and Design; Strategic Human Resources; Operations and Technology Management; Operations and Information Management; Marketing-Product Management; Marketing Research; Real Estate and Urban Land Economics; Risk Management and Insurance; Strategic Management in Life and Engineering Sciences; Supply Chain Management
Program length: 4 semesters
Classes offered: Monday-Thursday during the day
Accreditation: AACSB
Total cost: Per semester, Wisconsin resident: $4,524; Non-resident: $12,244
Typical class size: 120-130 incoming students in the fall
Unique attributes: Ability to focus on a career specialization; real hands-on experience

UW-Madison’s part-time MBA
Location: Madison
Focus: General management
Program length: 3 years
Classes offered: Monday and Thursday evenings
Accreditation: AACSB
Total cost: $13,290 per year includes student service fees, parking, orientation program and course packets
Typical class size: 40-45
Unique attributes: Lock-step program allows students to start and stay with the same people and build network relations

UW-Madison’s Executive MBA
Location: Madison
Focus: General management
Program length: 2 years
Classes offered: One week,
then Friday and Saturday every other week
Accreditation: AACSB
Total cost: $24,000 per year, all encompassing
Typical class size: 30-35
Unique attributes: Small size, virtually no attrition, international trip second year
UW-Milwaukee
www.uwm.edu
UWM’s full-time or part-time MBA
Location: Milwaukee
Focus: Cost management and ERP, entrepreneurship, financial strategy, global strategy, Information technology management, investment management, leadership, management of human resources, managing Innovations and new products, marketing strategies, non-profit management
Program length: 16 months full time, 4 years part time
Classes offered: Evenings
Accreditation: AACSB
Cost: Resident tuition: $1,771 per 3-credit course
Typical class size: 35
Unique attributes: Integrated foundation courses; state of the art technology; study abroad opportunities
UWM’s Executive MBA Program
Location: Milwaukee campus
Focus: Senior general management
Program length: 22 months
Classes offered: One full day a week on alternate Fridays and Saturdays
Accreditation: AACSB
Total cost: $39,500
Typical class size: 25-35
Unique attributes: One of the oldest EMBA programs in the country; required week-long international residency (recently visited locations include Shanghai, Hong Kong, UK, Czech Republic).
UW-Parkside
www.uwp.edu
Full-time or part-time MBA with distance-learning option
Location: Kenosha
Program length: average of 4 semesters
Classes offered: evenings or online
Accreditation: AACSB
Total cost: $305 per credit
Typical class size: 25-30
Unique attributes: New 8-week courses should allow students to accumulate more credits per semester and finish program sooner
MBA Consortium, UW-Parkside
http://learn.wisconsin.edu/mba
In an effort to offer the foundations courses more frequently, an MBA Consortium was developed. The participating universities are UW-Parkside, UW-Eau Claire, UW-La Crosse, and UW-Oshkosh.
The program offers all of the foundation courses (except Algebra and BUS 772) every semester via the Web. Some elective courses will also be offered.
UW-Whitewater
www.uww.edu
UW-W’s full-time or part-time MBA
Location: Whitewater
Focus: Management, Marketing, Finance, Human Resource Management, International Business, Operations & Supply Chain Management, Technology & Training, IT Management, Accounting, Decision Support Systems
Program length: Full-time 2 years; Part-time 3-4 years
Classes offered: Evenings, one night per week, and days
Accreditation: Association to Advance Collegiate Schools of Business
Total cost: $330.10 (resident), $921 per credit (non-resident)
Typical class size: 28
Unique attributes: The program is endorsed online so a student is not required to come to campus; highly interactive

UW-W’s distance/Online MBA
www.uww.edu/onlinemba
Focus: Management, Marketing, Finance, Human Resource Management, International Business, Operations & Supply Chain Maangeement, Technology & Training
Program length: Full-time 2 years; part time 3-4 years
Classes offered: Online/Internet
Accreditation: Association to Advance Collegiate Schools of Business
Total cost: $550 per credit
Typical class size: 36
Aug. 22, 2003 Small Business Times, Milwaukee

Whitewater kicks off fund drive
Campaign to finance new business school leaps forward

The campaign to raise $3.5 million in private contributions for a new business building at the University of Wisconsin-Whitewater began with considerable momentum with the recent announcement of leadership gifts totaling more than $2 million.
That total includes two major contributions from David and Lolita Kachel of Whitewater, and Doug and Barbara Timmerman of Madison.
The Timmermans, co-chairs of the "Beyond Tradition" fundraising committee, said the new business building is critical to the future of the College of Business and Economics.
"Whitewater has established a great tradition of excellence in business," said Doug Timmerman, a 1962 business graduate and president of Anchor Bank in Madison. "Our business programs have been recognized around the world. Now we must make the commitment to build a facility that reflects our quality and continues that tradition of excellence."
"We’re here together at this campaign kickoff to work as a team," Barbara Timmerman, also a 1962 business graduate, said in the gift announcement. "We’re here because we’ve made a commitment that is a reflection of our affection for the university and because of the value we’ve placed on our education here."
The Kachels, Whitewater business leaders and longtime supporters of the university, said they want to help UW-Whitewater remain strong.
"The university means a lot to our family," said David Kachel. "We run a small business, and we want to see the university continue to teach and train students to meet the needs of small businesses. Not every graduate is going to go out and work for a large company. Most will work for a small company or start their own small business."
"Running our business has been an important part of our lives," said Lolita Kachel, a 1950 UW-Whitewater College of Business graduate. "We both went to business school here, and we want Whitewater to continue to be a top-notch business school."
"We are extremely fortunate to be this far along in fundraising early on in the campaign," UW-Whitewater Chancellor Jack Miller said. "We’re starting off with a great deal of momentum to get the job done."
Miller said no other UW System campus other than Madison has ever raised more than $1 million for an academic building. "We were willing to take on the challenge of raising over $3 million privately and to use our own funds to pay for the planning of the building," he said.
Earlier this summer, the State Building Commission unanimously voted to approve the planning phase.
The new building, which will be more than 120,000 square feet and cost an estimated $30.5 million, will house all of the instructional, academic support and community service programs for the college. It will also contain a new Technology, Workforce and Economic Development Center that will provide comprehensive service to southern Wisconsin businesses.
"We’re currently spread throughout three buildings on campus," said college Dean Christine Clements. "With everyone together in one location, we’ll have the type of interaction that fosters innovation and growth."
UW-Whitewater currently has the largest undergraduate business program in the state and is among the 30 largest in the country, Clements said.
"But to stay competitive and to continue our strong partnerships with business and industry, our facility needs to be capable of providing students with the tools and experiences they’ll need to succeed in the business world," she said.

Aug. 22, 2003 Small Business Times, Milwaukee

Kohl’s Food Store landlords ponder closing of stores
As rumors continue to swirl about which food store chain is going to take over the soon-to-be vacant Kohl’s Food Stores in the Milwaukee area, the landlords that own the 23 food stores are watching with great interest, but little control.
That’s because, for the most part, Great Atlantic & Pacific Tea Co., the Montvale, N.J., corporate parent of Kohl’s, has long-term leases on many of its stores and will be required to continue to the pay rent even though the stores will no longer be operating as of the end of August. It also means the decision as to who might take over the space and when that would occur is out of the hands of the people that own and manage the shopping centers.
The food store chain, once the dominant player in the Milwaukee grocery store market, announced in June that it was closing the stores, along with its administrative offices and distribution center in Wauwatosa, because of declining sales.
“It is a tough situation to be in because you don’t have much control over it,” said Michael Weiss, president of General Capital Group, a Mequon development firm that owns shopping centers or buildings that house five Kohl’s stores. “You just have to sit back and see what happens and hope it is in the best interests of your property.”
Most real estate observers expect a majority of the Kohl’s stores to be acquired over the next several weeks, with most betting that Sheboygan-based Fresh Brands Inc., which operates Piggly Wiggly and Dick’s Supermarket, will purchase a majority of the locations. The grocery store chain has just four stores in Milwaukee and Waukesha counties.
But the real estate observers also predict that a handful will be purchased by several small food store operators, including John Nehring, who owns the V. Richards Market on West Blue Mound Road in Brookfield and the Sendik’s Food Store on Oakland Avenue in Shorewood.
“I think you are going to see some of the small, niche players come in and try to pick off some of the better locations,” said a real estate attorney. “This is an opportunity for them to expand, but not have to start from scratch in terms of acquiring the property and building a new store. They can do some remodeling and be ready to open the doors very quickly.”
Wauwatosa Mayor Theresa Estness said Nehring had contacted city officials about his interest in several Kohl’s stores in Wauwatosa, but she said he was still trying to work through A&P, without much success.
“We are watching this very closely because it has a big impact on our city and our residents,” she said. “We would be very interested in having a Sendik’s or V. Richards in Wauwatosa. But we’ll just have to wait and see what happens.”
Nehring could not be reached for comment.
Max Rasansky, president of The Polacheck Co., a Milwaukee real estate brokerage, identified seven Kohl’s locations that he said would be very attractive to grocery store operators – on West Appleton Avenue in Menomonee Falls, at the intersection of Highway 164 and West Capitol Drive in Pewaukee, at RiverPointe Shopping Center in Fox Point, on North Oakland Avenue in Shorewood, at North 82nd Street and West Blue Mound Road in Milwaukee, at the Ruby Isle Shopping Center in Brookfield and at Juneau Village in downtown Milwaukee.
“These are all strong locations from a real estate standpoint that I just can’t see staying vacant for very long,” he said. “Someone is going to step up on most of them and make a deal to get another food store up and running.”
Rasansky said if a major food store chain does purchase all the stores, they may turn around and sell several of the stores to smaller food store operators, who are interested in picking up just one or two sites.
“There could be a lot of moving around in the next few months,” he said.
The key, Rasansky said, is to get an agreement done before the stores close at the end of the month.
“It would be so much better for them to come in before the stores close rather than letting them go dark,” he said. “You don’t want to give the customers the opportunity to go elsewhere and create new shopping habits. Once that happens, it is hard to bring them back.”
David Donoian, a broker with The Boerke Co., a Milwaukee real estate brokerage firm, predicted that the Kohl’s planned closure would also open up some opportunities for the major grocery store players left in the market – Roundy’s Corp., which operates Pick ‘n Save Warehouse Foods Stores, and Jewel-Osco, a Melrose Park., Ill, grocery store chain, which has opened 17 supermarkets in southeastern Wisconsin since 1995.
Several real estate observers have said Pick ‘n Save is interested in acquiring the Kohl’s Store on Oakland Avenue in Shorewood because it does not have a presence in that area. Stores that are expected to close and not reopen include the one near Bay Shore Mall in Glendale, which is being torn down as part of the mall’s expansion project, along with a location in Waukesha and one on West Appleton Avenue in Milwaukee.
“I believe you are going to see Pick ‘n Save and others look to strengthen their hold in certain submarkets,” Donoian said. “They are all going to be jockeying around seeing which locations would pay off the best for them in the long run.”
Real estate brokers said A&P was handling the negotiations itself and was being “very tight lipped” about what it was going to do.
“There has been a lot of speculation, but until something is signed and sealed, it could keep changing,” Donoian said.
Rasansky said the departure of Kohl’s will be a big blow to Milwaukee because it will leave the area with only one dominant food store chain, Pick ‘n Save. Twenty years ago, he noted, the area had four strong chains – Kohl’s, Pick ‘n Save, Sentry Food Stores and Cub Foods.
Aug. 22, 2003 Small Business Times, by Mark Kass, for SBT

Third Ward is ready to blossom

The location is selected, the sign is up, the design is drawn, a contractor has hammer in hand and retailers are clamoring to fill the stalls of the future Milwaukee Public Market.
Meanwhile, organizers of the Public Market are negotiating with a local corporation interested in purchasing the $3 million naming rights for the main section of project, which would be located in the northeast corner of the intersection of Water Street and St. Paul Avenue.
At the moment, there’s just one hang-up in the grand plan, but it’s a $2.5 million hang-up.
The Historic Third Ward Association, the sponsoring agency for the Milwaukee Public Market, is awaiting word on whether or not it will receive a $2.5 million grant from the Economic Development Administration (EDA) of the US Department of Commerce.
That grant is critical to the viability of the project, according to Einar Tangen, president of the Public Market and chairman of the Third Ward Business Improvement District.
The nonprofit Third Ward Association has made a proposal to the EDA for the federal funding.
The EDA staff is reviewing that proposal and soon plans to decide if they will recommend that the project merits a full application, according to C. Robert Sawyer, director of the EDA’s Chicago Region, which covers Wisconsin, Illinois, Indiana, Michigan, Minnesota and Ohio.
Sawyer expects a decision this fall on whether Milwaukee will receive the funds.
At the same time, Sawyer and the EDA are awaiting word from Congress about how much money they will have to dole out for projects throughout the region. The regional office funded 25 public works projects in fiscal 2003, he said.
"We’re hoping that it will at least maintain the status quo, but in this environment, that’s even hard to expect," Sawyer said.
Sawyer said the staff is "working" with the applicants from Milwaukee to make sure their proposal meets seven EDA public works grant guidelines (see accompanying chart).
"If the proposal passes muster, then we will work with them on an application," Sawyer said.
At a moment’s notice during a reporter’s phone call, Sawyer was keenly aware of the details of the Milwaukee project.
"One thing I can speak to is the local support and the quality of the people involved," Sawyer said. "It has extraordinarily strong local support, and the people involved are committed to doing this. It’s an impressive effort."
Tangen is optimistic the Public Market will secure the federal grant.
"We have been working with them (the EDA staff) for roughly three and a half years," Tangen said. "They have been very encouraging. We expect to have funds in hand by November or December this year, and that’s when we would have our groundbreaking".
The Third Ward Association has raised $5.5 million of the $10 million needed for the structure, including $1 million grants from the Richard and Ethel Herzfeld Foundation, the Jane Bradley Pettit Foundation and an anonymous donor.
The federal grant would set off a series of financial dominoes to ensure the viability of the project, Tangen said, including a $700,000 brownfield redevelopment grant from the state and a $3 million corporate naming sponsor for the market hall of the structure.
"Everything hinges on the EDA," Tangen said. "We have an ongoing discussion with a group in town that is very interested in naming rights as a community gift. A lot of those discussions hinge on getting the EDA grant. If that is in hand, we know this group is very much interested in having their name on a civic project of this nature."
Tangen said local retailers are "beating down the door" to let him know they want to set up shop in the Public Market.
"Everyone in town has called me," Tangen said. "We’ve had a tremendous response from retailers who would like to be in the market and a tremendous amount of response from people who are already locating near the market."
The Public Market will include a year-round market area, which will include 22 to 25 "stalls" that will house businesses such as a coffee shop, a bakery, a grocer, a flower shop and a cheese shop.
Tangen said he has declined to commit to any of the interested parties and instead will hire a marketing manager for the Public Market to negotiate contracts with the retailers.
The Public Market will benefit the community on several different levels, Tangen said, aside from its role as a destination point and a source of fresh produce for Milwaukee’s rebounding residential population.
The project will partner with the Howard Fuller Foundation to identify qualified minority vendors and launch a food literacy program. In addition, excess food generated by the market each day will be donated and delivered to the city’s food pantries, Tangen said.
The Public Market also will be a conduit between the Third Ward and downtown, he said.
"It will be a very important linkage," Tangen said. "It will work in tandem with the Riverwalk, which will be linked up to downtown this fall and will allow people to, without crossing a bridge, get down into the downtown and get down right into the market. The Public Market will be directly across the street from a park which is connected to the Riverwalk."

Aug. 22, 2003 Small Business Times, by Steve Jagler of SBT

State connectivity project could facilitate rural development

As chief information officer for the State of Wisconsin, Matt Miszewski wants to make it easier for businesses in rural areas to get serious Web and extranet connectivity.
First a lawyer, then an IT entrepreneur – then head of the recently-eliminated Department of Electronic Government (DEG) – Matt Miszewski is planning to use a network that connects far-flung state offices to make major data pipelines available to businesses in underserved areas. Such a move, he said, could facilitate economic development in rural areas and make it easier for companies in urbanized southeastern Wisconsin to operate satellite locations in places such as the North Woods.
Miszewski was most recently CEO of Standfire Networks, an Internet start-up that, among other things, created secure e-mail software for physicians and operated a pay-for-download music site. He was a partner with the Milwaukee law firm Odell, Ugent, Haney, Miszewski, and prior to that spent time with IBM.
DEG will become part of the Department of Administration Aug. 24 due to budget cuts implemented by Gov. Jim Doyle.
Since taking his post in the Doyle administration, Miszewski has been working on the re-implementation of BadgerNet, a communications network that connects state government offices throughout Wisconsin. In a Technical Request for Information issued in late August, Miszewski solicited input from potential vendors on what it would take to add excess capacity to BadgerNet.
"As we look at what we are going to do with this, we will try to determine if there is some way we could allow private companies to connect to the system," Miszewski said. "We need to keep economic development at the front of our mind when we do these procurements."
The state’s contract with BadgerNet Access Association – an alliance of organizations that provide connectivity to the state – for the existing BadgerNet expires in 2005. By then, Miszewski wants to not only have a new contract in place for the state, but to have enough excess capacity to allow private businesses to access the powerful OC3 and OC12 backbone the state uses for data and video communication. Miszewski said the RFI would determine, among other things, to what extent new fiber optic cable must be laid to make an expanded BadgerNet happen.
Businesses would be able to contract with telecommunications companies for connections to the backbone, and would be able to lease capacity for pretty much anything from running an extranet to providing Internet services to other businesses.
"There is really no limit to what they can use it for," Miszewski said. "One thing that might correlate with this is if we could go back in time before telephone lines were brought to certain areas. That made those areas for competitive for business and development purposes. In order for the state of Wisconsin to become competitive with the rest of the country, we need this type of connectivity in force."
According to Miszewski, expanded connectivity in the hinterlands could make it easier for businesses in remote areas to do business with their urban counterparts.
"I don’t think (lack of connectivity) is holding back development, but it certainly would stimulate additional development, along the same lines of giving tax cuts to small businesses," Miszewski said. "This would certainly help in that area. It clearly would help folks that want to do business with small business up north but have requirements for electronic data exchange."
An expanded BadgerNet could allow businesses in southeastern Wisconsin to locate operations in more rural areas to take advantage of lower costs for labor and real estate.
"In order to do that, you need to have in force the high speed infrastructure that we are laying down," Miszewski said. "You could take advantage of some of the lower cost operations in places where people can not today because there is simply not the infrastructure."

Aug. 22, 2003 Small Business Times, Milwaukee

When looking to sell the business, don’t forget strategic buyers

By Victoria Fox, for SBT

Most business owners believe they already know the three or four most logical buyers for their respective businesses.
Owners usually assume that those potential buyers would be competitors or complementary businesses.
Sometimes the owners are right, and they can efficiently complete a transaction with the assistance of an experienced business attorney.
But, more often, they’re missing out on finding the right buyer offering the best price and terms.
Or, after contacting the logical buyers and finding minimal interest, owners may realize expanded marketing efforts are needed to maximize the value they will receive.
So how does a business owner find the right buyer for the business? Buyers are usually categorized as "strategic" or "financial."

Strategic buyers
An owner typically wants to sell to a strategic buyer. Strategic buyers are theoretically more motivated to acquire a complementary business and have a reputation for paying the highest price, which they justify through expected synergies or cost savings realized by the combined entity.
The acquired business could provide the buyer with access to new customers or market niches, offer cross-selling opportunities or reduce redundant operating costs. The chance to "take out a competitor" is also a potential benefit to strategic buyers. However, strategic buyers are not necessarily eager to share those synergies with the seller through a higher purchase price.
Strategic buyers typically come in more shapes and sizes than an owner may initially realize. Strategic buyers could include competitors, companies with similar products in different geographic locations, companies selling complementary products through the same distribution channels, companies that use similar manufacturing processes or component parts and private equity firms with similar portfolio companies.

Financial buyers
The notion of private equity firms as strategic buyers is a new concept for most business owners. Private equity firms, which raise funds specifically for acquiring and growing companies, are often viewed as financial buyers.
Often, though, an established private equity firm owns several "platform" businesses and seeks to build those platform companies through add-on acquisitions of complementary businesses.
Private equity firms are increasingly becoming strategic buyers as they seek add-on acquisitions for existing portfolio companies.
There are thousands of private equity firms in the US with the capital and motivation to acquire businesses. Industry reports indicate that those firms have raised more than $100 billion of capital that is available to be invested. The firms are under pressure from their investors to deploy this capital.
Investment activity among buyout firms slowed significantly during the last few years as they dealt with problems within existing portfolio companies. In recent months, investment activity has picked up, and private equity firms seem more eager to invest in new acquisition opportunities as well as raise new funds.
While many of those private equity firms focus on transactions involving larger companies with revenue above $25 million, there are hundreds of private equity firms interested in smaller platform companies and even smaller companies as add-on acquisitions, particularly if the company exhibits good growth potential or provides access to a niche or customer base not currently served by the platform company.
However, not every business is well suited as a potential private equity investment. Private equity firms are typically interested in businesses with growth opportunities and strong management in place. Their focus is to grow the business organically, as well as through acquisitions, during the five- to seven-year timeframe that they intend to own the business.
Another potential benefit of attracting a private equity buyer is the possibility for a recapitalization. Occasionally, an owner would like to sell a significant stake in the business while retaining a minority interest. The owner typically stays involved to help grow the business with the help and support of the private equity firm and then gets a second bite at the apple when the private equity firm sells the business, hopefully at a much higher price.
Finding a private equity firm that owns similar companies improves an owner’s sale options. Yet, identifying which private equity firms own businesses within a given industry is difficult and time consuming. There are few searchable lists readily available.
Established M&A advisory firms typically track the portfolio holdings and acquisition criteria for private equity groups and can identify firms with similar portfolio companies that are likely to have an interest. And they typically have the resources to thoroughly research an industry for strategic buyers as well as identify private equity firms that may have a strategic interest.

Identifying stragetic buyers
There are many ways to identify strategic buyers. The most common is to sort through various directories and databases listing companies by industry or Standard Industrial Code (SIC). Another is by analyzing transactions that occurred within the same industry and looking at which companies made acquisitions. Those buyers may have an interest in additional acquisitions or, if the buyers are in a slightly different industry, their motivation may offer insight into other potential buyer groups that may be considered strategic.
Another way of identifying the right buyer for a business is through the owner’s existing network of advisors. Attorneys, accountants and bankers can be good sources of potential buyers that may not have otherwise been uncovered.
Financial buyers should not be overlooked either, as they sometimes end up being the best fit for a business. They may have industry experience or knowledge they can use to make an immediate improvement to a business. They may sometimes be even more eager to make an acquisition, especially if they are under pressure to invest funds.
Balancing an owner’s desire for confidentiality with the opportunity to develop multiple competing offers by contacting a larger pool of prospects can be challenging. For an owner to be confident that he or she has the right buyer at the best price and terms requires thoroughly researching the market for strategic as well as financial buyers.
In one of our recent sale engagements, the seller originally thought his company could be sold by selectively contacting a handful of national companies he considered to be the most logical buyers. None had a strong interest, so we agreed to expand our marketing efforts and contacted a number of complementary businesses, a few private equity firms, high net-worth individuals and select contacts within our network of attorneys and bankers. We now have eight interested parties reviewing the offering materials and expect three or four competitive offers for the business.
Business owners would be well advised to broaden their perception of strategic buyers, while not ruling out financial buyers. We have often found that a broader marketing effort can uncover non-obvious strategic buyers and results in higher values received by the seller. And, more often than not, the ultimate buyer is not the one that initially appeared to be the most logical.

Victoria Fox is director of mergers & acquisitions at Emory Business Valuation, a Milwaukee-based firm that provides comprehensive merger & acquisition and business valuation advisory services for middle-market corporate clients.

May 30, 2003 Small Business Times, Milwaukee

The Good to Great venture

Many business people throughout the country refer to the book Good to Great (HarperBusiness, 2001, www.goodtogreat.com) by author Jim Collins as a roadmap for how to grow their companies. Of course, no single book can hold all the right answers to all the right questions. However, Collins’ book and its tenets provide a starting point for an enlightening discussion on the strategies that can help a "good" company develop into a "great" company.
It is within that context that Small Business Times presents its annual Ventures: A Guide for Growing Business.
With a nod to Collins, this special report includes the stories of the leaders of several companies in southeastern Wisconsin who share with us their insights about how they’re growing their companies. To be sure, some of these local corporate leaders have never even read Good to Great, but they have instinctively deployed many of the book’s philosophies, including: