Helwig Carbon developing global partners, diversification as manufacturing changes

By John L. Campbell, for SBT

What would you do if your core business was shrinking due to advanced technology and a declining domestic market, factors over which you had no control? That’s the challenge facing the managers at Helwig Carbon Products in Milwaukee. Jeff and Jay Koenitzer, third-generation owners, must wonder how Walter Helwig, their grandfather, would have coped with such a dilemma. Celebrating its 75th year in business, the company prides itself in never having a layoff. Helwig’s grandsons are doing everything in their power to maintain that record.
Management researcher Jim Collins, author of Built to Last and his most recent book, Good to Great, loves case histories like the challenges confronting the Helwig management group.
The company manufactures carbon brushes, replaceable sliding contacts and vital parts of electrical products like motors and motor generators. Despite Helwig’s continuing capture of market share in both OEM and replacement business, changes in technology and the decline of manufacturing in this country threaten the company’s long-term growth.
The United States has lost 2.1 million manufacturing jobs since the first quarter of 2000; 88,000 manufacturing jobs in Wisconsin alone have been lost, according to the U.S. Bureau of Labor Statistics and the Wisconsin Department of Workforce Development.
Jay Koenitzer, Helwig’s vice president of marketing, winces every time he hears of another plant closing. In addition to the decline of manufacturing and an unsteady economy, improvements in technology have replaced the need for carbon brushes.
"They’re going to A-C brushless motors," Koenitzer explains during a conversation about the company’s management structure.
Like their grandfather and their father, the Koenitzers run a good company; but they’d like to be better, maybe even great. They’d like to be as great in the carbon business as Wells Fargo or Nucor are in banking and steel, some of the 11 great companies cited in Collins’ book. One of the author’s axioms states that good is the enemy of great. Being good stifles the drive necessary to step up to the next corporate level and be great.
Neither Jay nor Jeff has had much time to contemplate greatness. They’re preparing to avoid a drought threatening their business. They’re busy negotiating global partnerships and seeking diversification with new products their customers can use.
Helwig’s management pyramid has just two levels. Paul Casper is general manager. The rest of the management team is composed of four vice presidents and their human resource manager. Two vice presidents are the company’s owners, the Koenitzer brothers. Ron Carlson is vice president of finance. Skip Joers is vice president of manufacturing while Jennifer Martin is the human resource manager.
Jeff Koenitzer, who serves as vice president of engineering, has 27 years with the company. He’s also chairman of the board. Jay handles marketing and manages the sales department. Thirty independent sales representatives cover the United States for Helwig; many of them have been with the company 20 to 30 years.
"This year we’ll do about $28 million in sales; we do a much better job providing technical support and sales coverage than our competition," says Jay Koenitzer, explaining that most competitors are larger, foreign owned. Old-line carbon brush manufacturers like National Carbon, once a division of Union Carbide Corp., are owned by Morgan Crucible, a British company.
Prior to 1928, when Helwig Carbon Products opened in Milwaukee, all the carbon brush manufacturers were located in the East. Helwig’s son-in-law, John Koenitzer, joined the company, and the two of them produced several patented innovations. A brush holder that reduced carbon wear by applying a constant pressure on rotating contacts eventually became an industry standard.
"My grandfather’s management style was not characteristic of a Level 5 as described in Collins’ book," Jay explains with a smile. "It was his way or the highway."
Despite his autocratic flare, Walter Helwig pioneered employee bonus programs, rewarding those who produced the most. His incentives worked. To this day his grandsons respect their grandfather’s values of integrity and the golden-rule-manner in which he conducted business with customers and employees.
Both Koenitzer brothers agree that the management styles of an entrepreneur and managers of a corporation in its 75th year with 280 employees will differ. "We wear many hats here," says Jay, discussing steps they’ve taken to improve their management skills.
Recognizing the need for continuous education, they hired a full-time trainer four years ago. Every two weeks, they have training sessions, where they discuss business books and current philosophies. They’ve all either taken or been introduced to the Dale Carnegie course.
"Jim Collins’ book Good to Great raised my level of awareness," says Jay Koenitzer. "I didn’t realize you could be a Level 5 manager (the highest rating by Collins’ definition) without acting like a charismatic Jack Walsh from GE."
In an effort to give back to the community, Helwig managers encourage their employees to participate in activities such as the Next Door Foundation’s Walk for Kids, where on May 10, Casper was one of several leaders. In 1989, the company donated its old Milwaukee plant to the Next Door Foundation. The company supports St. Luke’s Hospital and the hospital’s chaplaincy program, part of Helwig’s giving a minimum of 4% of its profits to charities.
"Profits are necessary, of course, but we don’t focus on profits alone," Jay says. He agrees with the philosophy that if you take care of your customers’ needs, the profits will follow.
In its strategy to counteract a declining US market, Helwig has gone global, forming a partnership with Gerken S.A., a Belgium brush maker. Like Helwig, Gerken is a family-owned, third-generation company.
Packaging the combined raw material requirements of the two companies, the partners negotiated a long-term contract with SGL in St. Marys, Pa., a major supplier of raw materials known as carbon plate. As part of the deal, the partnership formed a new European company, E-Carbon, and acquired two of SGL’s facilities, one in Germany, the other in the Czech Republic.
"People like to buy locally," Jeff Koenitzer says, citing reasons for opening sales facilities in Canada and Mexico. With Jeff’s experience in brush technology, he’s planning to partner with machine shops in those countries, teaching them the technology of fabricating brushes and brush holders for Helwig’s foreign accounts.
Down-time in any manufacturing facility is costly. Jay Koenitzer explains how Helwig is able to ship products the same day an order is received.
"We stock about a 1,000 different brush styles, and ship 50% of the orders we receive the same day, plus an average of 40 rush orders for specialty items not in stock," says Jay, emphasizing the just-in-time service offered to customers. "In our computer, we have over 100,000 brush designs. If a customer calls on a weekend and needs replacement brushes, items not in inventory, we’ll do whatever it takes – call people in to work, just to satisfy their needs."
Under the agreement with Gerken S. A., Helwig Carbon will sell carbon products in the Americas along with Australia and New Zealand.
Gerken S.A. will serve the European, African and Asian markets. The two facilities acquired by E-Carbon will manufacture a variety of carbon brushes, pantograph carbons, trolley shoes and mechanical carbon products.
Helwig Carbon has put together a business strategy it can control, putting behind it those trends over which it has no control. Its partnerships have secured raw materials and added new products, as well as new territory. Half the globe is Helwig’s market, and the company has its antenna poised to take on new products that can make a good company great.

Jay Koenitzer
Vice president of marketing
Helwig Carbon Products
Milwaukee
Age: 41
Education: Bachelor’s degree, Carthage College

Jeff Koenitzer
Vice president. of engineering, chairman of the board
Helwig Carbon Products
Milwaukee
Age: 49
Education: Bachelor’s degree, Carthage College; engineering degree (PE) MSOE

Company’s annual revenues: $28 million
Employees: 280

May 30, 2003 Small Business Times, Milwaukee

Business owner may have sealed his fate by failing to act on buyout query

By Richard Hellan, for SBT

I want to tell you a story about Mr. Stars, Mr. Red, Miss White and Mr. Blue. Like that proviso at the beginning of the old television series about the L.A.P.D., "The story is true. Only the names and some facts have been changed to protect the innocent."
Six months ago, I spoke with a small business owner, Mr. Stars. Within a 10-day period, he had been approached independently by three of his competitors. Each expressed an interest in selling their respective businesses to him.
The nation’s continuing economic malaise was taking a heavy toll on each of their companies. Mr. Red was looking for a way to bail out of the industry altogether by cashing out. Miss White was looking for a way to enter new and larger markets by combining strengths and reducing overhead. And Mr. Blue, the last owner who approached him, was simply looking for a way to hang it up and salvage a job in the process.
Shooting from the hip, Mr. Stars gave to each owner a "thanks, but no thanks" reaction. His firm was doing reasonably well, despite the economy, and it seemed clear to him that at least two of the three persons approaching him were already driving their firms into "Elimination Alley."
By doing nothing at all, he imagined that his firm soon would benefit from their demise. And with respect to Miss White, the thought of taking on the expense of merger activity to enter new markets in an industry that was already soft had little appeal to Mr. Stars, at first glance.
Two weeks ago, I spoke with Mr. Stars again. I inquired about his decisions regarding the owners who had approached him. Did he still feel he had made wise decisions to forego any exploration of the inquirer’s interests? Were the competitors still around? What happened to the principals?
He proceeded to tell me a story that was interesting, indeed.
Several weeks after he was approached by the three business owners, he received a call from one of his largest customers, The Big Co., who inquired about any interest Mr. Stars might have in selling his firm to The Big Co.
The Big Co.’s first goal was to capture savings by creating an in-house department to provide the products and services it had been purchasing from Mr. Star’s firm and others. Its second goal was to turn the new department into an independent profit center with a mission to enter larger markets throughout the country where it has a strong presence and brand recognition.
Mr. Blue had approached The Big Co. with the idea of helping it develop an in-house department, which he would head-up for them, and he introduced Mr. Red and Miss White to The Big Co.
So, now all three competitors of Mr. Stars were in discussion with The Big Co. about selling their firms to it.
Mr. Stars is now pondering the future of his firm in the struggling economy, as he won’t be able to compete with his largest customer, who is on the verge of launching a competing business in-house by acquiring his competitors.
Mr. Stars had missed an opportunity.
In today’s economy, joint venture, merger and acquisition activities offer tremendous opportunities for growth, profitability and strategic positioning. However, they also require "out-of-the-box" thinking and a willingness to explore and discover hidden opportunities.
A highly competitive, free market economy does not allow for much complacency nor for leadership comfortable with "maintenance." And it is critical that the small-business owner looks at his or her company without blinders and with an open, creative mind.
Even the best of presented opportunities require solid "due diligence," as well as the advice of independent, seasoned advisors. Successful change initiatives involving joint ventures, mergers, acquisitions and divestitures require an array of legal, financial, operational and human resource issues. Having ready access to a team of seasoned advisors who can offer expertise and successful experience will help the business owner see things from different perspectives to minimize risk and leverage opportunities.
A solid strategic business plan can help to keep principals directed toward their overall mission, eliminating wasteful expenditures of time and money from adventuring on roads better left not traveled.
But challenging times can call for accommodating strange bedfellows. Opportunities that would not be presented in a stronger economy are presented in times like we have today. The same is true with respect to one’s competitors.
For the small-business owner, the playing field always remains essentially the same. It’s a tough job to consistently compete at a high level and achieve a decent, long-term return on investment.
The business owner or leader who takes prudent, calculated risks and makes more right decisions than wrong decisions is the one who succeeds. In a soft economy, strategic alliance, acquisition and merger activities become increasingly important for business owners to explore to achieve growth, profitability and the realization of dreams.
Mr. Stars still has a variety of ways to achieve his corporate mission and his personal dreams. His road to success may have been made more challenging because he saw the situations presented to him by his competitors as wine glasses "half- empty" and with problems, vs. "half- full" with opportunities.

Richard Hellan is president of Hellan Associates, an executive and business coaching firm headquartered in Milwaukee. He can be reached at 414-967-9012.

May 30, 2003 Small Business Times, Milwaukee

Take control of the sale
It’s all in the words; try this dialog

By Jerry Stapleton, for SBT

Let’s say you sell — whatever — software. You’re sitting at your desk minding your own business when, suddenly, the phone rings. This time it’s not your boss asking you for your latest numbers. No, this time it’s a live one. A prospect!
Yes, at a time in your company’s business cycle when you’re beginning to wonder if anyone out there even knows your company exists, a prospect (Let’s call him Bob, and let’s say his company is local) actually calls you. And Bob seems interested. In fact, he’s asked you to come see him and demo your software. You’re about to lose it with excitement. But you maintain your composure long enough to get Bob’s address and schedule a date. After slamming the phone and jumping from your chair, arms in the air "Rocky"-style, you call that nosey boss of yours to tell him you’ve got an interested prospect and you’re going to meet with him for a demo.
At this point, if you’re a "Vendor-level" salesperson, you’re elated. If, on the other hand, you’re a Business Resource, you realize that you blew it! You lost control.
Vendors — and most traditional salespeople — tend to equate "interested party" with "qualified prospect." At best, they reason, "I can further qualify this Bob-guy when we meet. I just want to get in front of him. Besides, this shouldn’t waste too much time if I find out he’s just kicking tires."
Such a response is all too common. There’s more to risk here than just your time. By responding this way you set a precedent that says, "Sure, I’m a Vendor, so go ahead and jerk my chain when you need me. I’ll just be waiting here at the door." You also are locking yourself in with Bob who is almost certainly a low-influence person in his company. So how should you respond? What kind of dialog should you have with Bob, if not the one described above?

Apply Business Resource principles
There are several Business Resource principles at play here. Chief among them are to steer the sales campaign — not react — and to make decisions on objective criteria — not "gut feel." Naturally, operating in seek mode is one of those omnipresent principles that applies, too.
This means that, on the one hand, you want to convey responsiveness. On the other you also want to convey personal stewardship of your company’s resources-and, as a Business Resource, you’re not afraid to let Bob see that stewardship.

Try this dialog
First, you must immediately make Bob comfortable that he won’t be getting the runaround while you’re setting the stage to learn more about his request before committing to visit him. That can be accomplished with something like, "We certainly appreciate the call. Why don’t you take a few minutes to give me the big picture, then perhaps I could offer a suggestion on how we might best proceed. Make sense?"
You must control that "big picture discussion." The best way to do so is by asking a question before he starts talking. Also, by saying, "Perhaps I could offer a suggestion on how we might best proceed, Make sense?" you are very subtly getting Bob’s permission to control the sales cycle from the get-go. Subtle, but powerful.
Now that you’ve gingerly wrestled control, it’s your responsibility to qualify this "opportunity." In addition to the specific things you need to ask to determine technical fit with your solution, you might also ask questions along the lines of:
— What prompted your call? (What triggered [Bob’s company’s name] to investigate [your type of solution]?
— How do you know about [your company name]?
— What results are you hoping the software will produce for [company name]? (Don’t ask, "What are you looking for?" or Bob will go straight to features)
— What are you currently doing and how is it working?
— Where is [company name] in the process of looking for a solution?
— What is your role in the company, Bob?

Let’s say at this point that Bob’s opportunity seems worth the chase. You’ve decided to go pay him a visit. But do you want to set the stage for a traditional demo meeting with Bob and relegate yourself back down to Vendor status or do you want to continue being the Business Resource that you’ve been to this point? I’m willing to bet that you want to go with the Business Resource thing.
At this point you might want to say something like, "Based on what you’re saying I agree, it does seem to make sense for us to get together. May I suggest a format for our meeting? (They always say, "yes" to this)? Something we’ve learned here at [Your Company] is that all of our best customer relationships seem to have one thing in common — we understand their business. Add parenthetically, ("We think that’s a key reason our customer retention rate is so high"). So how about if we do this. Let’s get together and I’ll give you a high-level overview of what our software does and how it works, etc., so that we can get your most immediate questions answered. Then I’d also like to devote a good chunk of our time together going into a little more depth about your business, how your organization ticks and the like. Make sense?"

In this simple dialog-filled with subtleties — you have displayed many Business Resource qualities. You now own the control of this sales cycle with Bob and you have clearly started to differentiate yourself from all the other Vendors who would have jumped all over the chance to show their stuff.

Jerry Stapleton is president of Stapleton Resources LLC, a Waukesha-based sales force effectiveness practice. He can be reached at 262-524-8099 or on the Web at www.stapletonresources.com.

May 16, 2003 Small Business times, Milwaukee

Continued innovation ahead for Alverno College
By Kay Falk, for SBT

As Sister Joel Read retires after 34 years as president, Alverno College plans to remain a vibrant force in higher education

While colleagues of Sister Joel Read, decades-long president of Alverno College, talk about her legacy as her upcoming retirement approaches, Read doesn’t see it that way.
"Legacy is not personal," she emphasizes. "The legacy is really the approach to education that has been developed by the faculty over the past 30 years. There’s a very collaborative spirit here. We’re able to discuss things, in great depth if necessary. That’s not exactly a widespread attribute of higher education. Because we have a matrix organizational structure, people work together across their disciplines as well as within their disciplines. This collaboration doesn’t mean we can’t be critical, but we can do it in the spirit of improvement and trying to serve students better."
Kathleen O’Brien, vice president of academic affairs and a member of the presidential nominating committee, puts it this way, "Sister Joel is good at making sure the legacy she’s established can continue. She has things well-oiled so we know what we’re about," O’Brien says. "She’s worked tirelessly for almost 35 years to create a vibrant institution. One of the marks of this vibrancy is that it can succeed her tenure as president."

Renewed approaches to education
Both women believe the new president’s job will not be to lead Alverno in a completely different direction. "The new president will bring a shift in style, energy and personality at the top, but our college will continue to build on the national and international reputation for innovative curriculum established under Sister Joel’s leadership," O’Brien points out.
That reputation concerns an ability-based, assessment-as-learning curriculum that stresses abilities over grades, as well as opening the doors of the college to nontraditional and part-time students before other higher educational institutions thought of doing so.
The innovation continues today. "For example, there’s a diagnostic digital portfolio that still needs a lot of work although we’ve raised several millions for it," Read says. "When it’s fully developed, it will be a very major contribution to the education of students at all levels, not just in higher education."
She also points to a national project. "The National Survey of Student Engagement (NSSE) has between 600 and 700 institutions involved in an effort to provide data on how students learn while in college," Read explains. "That project has decided now to document colleges that have exceeded expectations both as to their levels of achievement and their graduation rates. They have selected 20 of the participating colleges, and Alverno is one of those. We exceed both baccalaureate colleges to which we’re compared by significant percentages and the whole group of colleges together."
Both Read and O’Brien realize an important duty of the new president will be fundraising so current endeavors and programs can continue and new ones that benefit students can be launched.
"I hope the new president will see herself as the major fundraiser for this college," Read says. "This school has a modest endowment, which it does a great deal with it. People who come here think we’re heavily endowed, but I say we’re conceptually rich. That’s how we do what we do."
She continues, "I’ve told both finalists that we must have support for what the faculty has done here. The faculty, staff and college have made a major contribution to women and minorities and their educations. When you can get people succeeding at very high levels, the importance of support can’t be underestimated. I think the candidates know that."
O’Brien agrees. "The nominating committee is looking for people who can size up our institutional picture and know how to see it will continue," she says. "The new president will need to enhance enrollment, facilities and physical resources. Our approach to developmental learning has won awards and doesn’t need to change. We’re looking for someone who can renew our approach, provide resources and make the college even more visible."

The replacement search
While O’Brien admits filling Read’s shoes is not an easy task, she says the general nominating process is spelled out in the college’s bylaws.
The 10 members of the presidential nominating committee began meeting more than a year ago. "We did some ‘prethinking’ and worked with Sister Joel to time her announcement last November," O’Brien recalls. "We hired a consultant who has participated in more than 100 searches in the past. He’s steered the committee since November."
An initial pool of more than 100 has been narrowed to two finalists, Mary J. Meehan, vice president for administration at Seton Hall University in New Jersey and Eileen B. Wilson-Oyelaran, a vice president at Salem College in North Carolina.
The week of April 27 through May 3, the two candidates visited the campus to meet with alumni, students, trustees, faculty, staff and community representatives. "Each of them was here for three days, and during that time we held a series of three (for each candidate) open Alverno Community Forums where the students and public were welcome to meet and ask questions," O’Brien said. "The candidates also met individually with Sister Joel and other key staff, and there were breakfasts for selected students, so there were multiple opportunities to meet these two women."
The nominating committee has read written feedback from the candidates’ visits and met to discuss this feedback. A recommendation to hire one of the candidates was presented to the board of trustees for its May 14 meeting.
"The board has already met with each of them about a compensation package, so we’re hoping once an offer is made, we’ll be able to quickly announce who the next president will be," O’Brien says.
Whichever candidate is selected, "I believe the future of Alverno College is very bright," O’Brien concludes. "It’s a wonderful place, and as one candidate told me, ‘It’s a plum of a position.’ These two women are not interested in being caretakers of what we’ve done in the past; our new president will be someone who will care for the legacy, bring all voices together and put her stamp on the process of leading Alverno into that bright future."

For Read, one honor of many stands out
Sister Joel Read has earned countless awards, honors and honorary degrees over the course of her almost 35 years as head of Alverno College. They all have had great meaning to her, but one that stands out in her memory was the Anne Roe Award from the Harvard University Graduate School of Education. She received it in 1980.
"It was a very moving experience because Anne was still alive at that time," Read recalls. "I was the first to win the new award in her name and she attended the presentation event."
Anne Roe, the first tenured woman at Harvard, spent her career studying the nature of work. "She focused on work as a stretchpoint in people’s lives, not just a job from which you earn your living," Read explains. "Work is how you come to define yourself."
She continues, "I had access to some of her works at the time, so I titled my talk in receiving the award, ‘An institution with stretch.’ We had a wonderful exchange after the award ceremony and that was very moving for me. Just the opportunity to meet and exchange ideas with her was great honor for me. We stayed in touch until her death."

May 16, 2003 Small Business Times, Milwaukee

PabstCity’s use of conservation easement unique in state

By Charles Rathmann, of SBT

A Cleveland developer plans to use tax revenue from a federal conservation easement to fund redevelopment of the former Pabst Brewery site west of downtown Milwaukee.
A conservation easement preserves open spaces and other environmentally significant resources while providing income, property and estate tax savings to the landowner.
Easements are "donated" by the US Department of Interior to a conservation organization or local government entity, which accepts the responsibility to monitor the easement and to enforce its terms.
While conservation easements were designed to allow landowners to keep land in an undeveloped state, preserving green space and wildlife habitat, the only wildlife on the PabstCity site are seagulls, pigeons, crows and — more than likely — rats.
Additional wildlife and green space would not likely be created as plans move forward to turn the 20 buildings on the 130-year-old Pabst Brewery site into an entertainment, retail, office and residential district.
However, according to developer John Ferchill, his Ferchill Group has used conservation easements to redevelop urbanized sites before.
"This would be the fourth one we have done," Ferchill said. "We have done three of them already. Two of them have each been in effect for about a year."
Ferchill said one of his earlier ventures, a $70 million adaptive reuse project in Pittsburgh, is the largest of his projects involving urban use of conservation easements.
"We took five historic buildings and converted them into lofts," Ferchill said, stressing that the revenue resulting from the easement was critical to the project’s viability. "As part of the financing, we did a conservation easement. It wouldn’t work unless we could do that."
On previous projects, Ferchill said, he has been able to negotiate up-front payments for the easements.
"We received the benefits up front, discounted so we could get them up front," Ferchill said. "And then we use the proceeds for construction of the project."
The idea of applying a program designed for forests to factories is incongruous, and according to Ferchill, his first venture with conservation easements involved doing a lot of homework to make sure the program was applicable.
"We got a legal opinion, an accounting opinion, a tax opinion," Ferchill said. "There were no issues with it."
According to a Madison attorney with experience using conservation easements, Ferchill’s approach is something new in Wisconsin, both because of his use of conservation easements and the fact the he is combining the easement with a historic preservation tax credit.
"It is not common," Johanna London of Michael Best & Friedich said. "The historic preservation credit is more common in these situations. We see that all the time. But the use of conservation easements on a developed piece of property — that is new."
London said the rules for conservation easements do not specifically require they be used to protect undeveloped land, stressing that whoever holds the conservation easement would play a role in determining how it is used.
"You have to meet certain requirements to take advantage of the tax deductions," London said. "You could do it under state law and not meet all of the federal tax deduction requirements. It would be important that the piece of land would really fall into those conservation purposes for donating it. I think the holder of the easement would help a lot in defining those conservation purposes."
In the case of PabstCity, the holder of the easement would likely be the City of Milwaukee. According to Department of City Development (DCD) spokesman Bill Zaferos, Ferchill has not yet requested a conservation easement, but DCD officials expect he will apply for one.
"We are looking at a series of structures that at this point are being used for nothing, and at this point, we certainly want to encourage redevelopment of the area," Zaferos said.

Mix-and-match financing not easy

PabstCity developer John Ferchill says mixing and matching multiple tax deduction and funding sources for historic preservation projects is a complex process.
Ferchill plans to fund some of the redevelopment of the former brewery by obtaining up-front payments on some tax deductions, including a federal conservation easement he plans to receive for the vacant industrial complex.
Ferchill also is seeking a Historic Preservation Tax Credit, which would place stiff requirements on the redevelopment project.
According to sources close to the project, the PabstCity application to the National Park Service for entry on the National Register of Historic Places should be completed by June.
"There are rigorous restrictions," Ferchill said. "On our projects, everything we did was approved by the National Park Service."
Ferchill said the involvement of the Park Service has not slowed down the development process in his projects.
"The Park Service part of it takes about six months," Ferchill said. "But while we are doing the historic items, we are doing all the rest of the work at the same time. Does it add expense? Does it add time to build the historic stuff? Yes. Does it cause delays to the project? No."
However, Ferchill’s message for other developers when it comes to his aggressive approach to funding using governmental programs and tax credits seems to be, "Kids, don’t try this at home."
"I think it is important for you to understand that this is about as good a historic team you could put together," Ferchill said, crediting his Cleveland-based team of general contractors Marous Brothers Construction and architects Sandvick and Associates.
"Berghammer Construction (of Milwaukee) — they also have a huge amount of historic experience," Ferchill said. "They are in a joint venture with Marous, but their role is not completely defined yet. But both firms with be heavily involved in the project."

May 16, 2003 Small Business Times, Milwaukee

Milwaukee area misses out on first round of tax credits
Although vast portions of the city of Milwaukee and other parts of urbanized southeast Wisconsin are eligible for a new tax credit program from the US Department of Treasury, major economic development entities here did not file applications for the first round of the tax credits.
The New Markets Tax Credit (NMTC), a product of President Bill Clinton’s 2001 fiscal year budget, is designed to stimulate investment in low-income communities. The program provides a 39% tax credit to investors who make equity investments in community development entities (CDEs) pre-approved by the Department of Treasury.
In turn, the CDEs make investments in or loans to businesses in low-income communities. Investors receive the credit over a period of seven years.
To former US Rep. Tom Barrett, now a partner with Milwaukee law firm Reinhart Boerner van Deuren, the fact that southeastern Wisconsin organizations did not come out in force to apply for the tax credits was surprising.
“The federal government has set aside $2.5 billion for these tax credits,” Barrett said. “Here in Wisconsin, a lot of people complain that we don’t get enough federal dollars back, and here is a perfect vehicle for getting these federal dollars. … I think it is a program that we should be working to make part of the economic development landscape for southeastern Wisconsin.”
While representatives of some economic development entities say they avoided filing an application for the tax credit, others say they were caught unaware.
“This has been a program that has been undercover, as far as PR (public relations),” Kenosha Area Business Alliance President John Bechler said.
According to Milwaukee Economic Development Corp. (MEDC) President Patrick Walsh, MEDC is considering getting involved with other entities to apply for the credit in subsequent rounds.
Because CDEs are responsible for documenting that their investments stay in low-income Census tracts, the eligible agencies may be avoiding using the program, according to one local CDE executive.
Investors in CDEs risk forfeiting not only future tax credits, but tax credits they have already received if the investments of the CDE fail to remain invested in low-income enterprises for seven years.
This will force stringent underwriting, but according to some experts, could result in a loan and investment portfolio comprised entirely of higher-risk ventures.
“The NMTC has a recapture provision for investors that is fairly stiff,” said Carol Maria, vice president of lending initiatives with the Wisconsin Women’s Business Initiative Corp. (WWBIC) “The administrative cost of making sure that an investment is made in a qualified business is difficult. It is a fairly cumbersome program that small entities like WWBIC would have a difficult time administering.”
Shirley Lanier, president of another CDE, Legacy Bank, Milwaukee, said that as a small and relatively young bank, Legacy lacks the staff and financial resources necessary to mount an application and manage a program according to regulation.
“We are certified by the Department of Treasury,” Lanier said. “I really think that, from my perspective, you need to attract investors before you apply. This is not as attractive as regular low-income housing tax credits.”
Lanier also said the requirement that investments be made in low-income areas may result in accumulation of a high-risk loan or investment portfolio.
Barrett said some concern over the recapture provision is understandable.
According to Barrett, problems could result for CDEs and investors “if the mix of investments does not meet the low-income threshold if the money does not actually go into low income neighborhoods. The uncertainty arises simply because the program is so new,” Barrett said. “Once we have definitive rulings from the Treasury, that is going to make it clear.”
May 16, 2003 Small Business Times, Milwaukee

Business briefs

The Schlossmann automobile dealership on Highway 100 in Greenfield has become an exclusive Honda dealership and is now known as Schlossmann’s Honda City.

The business had been known as Schlossmann’s Oldsmobile, Isuzu, Honda City until April 1.
The change was prompted by General Motors’ phaseout of the Oldsmobile division.
Schlossmann’s sold its last Oldsmobile in January and its last Isuzu in March.
"The advantages of being an exclusive Honda dealership far outweigh the ability to sell more than one brand of automobiles," said Brad Schlossmann, company president.
The dealership is at 3450 S. 108th St. (Highway 100). It was moved to that location in 1994 from South 76th Street.
Honda City is part of the Schlossmann Automotive group. The group, started in 1967, includes Honda City, Dodge City Milwaukee, at 27th Street and Layton Avenue, and Dodge City Burleigh, 114th and Burleigh streets.

Hess Sweitzer Painting Contractor has moved to the New Berlin Industrial Park from Milwaukee’s Walker’s Point neighborhood, just south of downtown.
The company had been in Milwaukee for more than 40 years. Company president Tom Sweitzer said the move west was prompted by an opportunity to enhance efficiency.
The New Berlin site, at 2805 S. 160th St., has 20,000 square feet of space with two warehouses – all in one level, with the ability to create offices to suit.
Hess Sweitzer was established in 1918. Tom Sweitzer has been owner since 1974. The company does industrial, commercial and decorative work throughout Wisconsin.

West Allis-based ReGENco and _Koda Energo of Pilsen in the Czech Republic will work together on the repair and service of large steam turbines and generators, the two companies have announced.
Under an agreement, ReGENco’s turbine and generator service will be backed by _Koda’s engineering and design experience in blades and turbine internal steampath upgrade technology. In reciprocation, _Koda’s customers will gain access to ReGENco’s North American repair facility, dynamic balancing facility and multi-brand service and parts manufacturing know-how, the companies said.
According to Jan Musil, _Koda Energo’s president and CEO, "the alliance with ReGENco is a good opportunity to further our expansion into the Americas while enhancing our service offerings to our customers in Europe and the Middle East. Our relationship with ReGENco is a logical next step to our business expansion currently underway in the US."
ReGENco President and CEO John C. Bobrowich said, "Many of our customers have 30+ year-old steam turbines. The alliance with _Koda Energo allows us to offer cost-effective upgrades and component replacements that will significantly improve the output of this equipment. Our relationship with _Koda Energo will also provide us with an important outlet for expanding our service and parts capability outside of the US and provide the European and Middle Eastern customer a cost effective option which will improve their competitive cost position".

Landmark Credit Union has been approved for participation in the Small Business Administration’s 7(a) lending program. "We are very pleased to have the opportunity to partner with the SBA. This relationship further enhances our ability to provide our members with loans for their small businesses when they might not qualify for a loan through normal lending channels," said Jay Magulski, vice president of business development for the credit union. Landmark Credit Union serves southeastern Wisconsin with 11 offices. It is the largest credit union in the state, with $725 million in assets, 100,000 members and 280 employees.

Munson Inc. a Glendale-based asphalt, concrete, fence and tennis court contractor, has reconstructed it’s Web site at www.munsoninc.com

Heritage Quality Printing and Graphics Center in Brookfield has purchased the mail-processing business of Milwaukee Direct Mail, which focuses on health-care, financial and nonprofit organizations. Milwaukee Direct Mail will continue to serve its customers while outsourcing the mail processing to Heritage. Terry Tarillion founded Heritage Quality Printing and Graphics Center in 1972.

The far northwest side of Milwaukee is now officially known as the Historic Granville neighborhood in recognition to the area’s history. The neighborhood is bordered by County Line Road to the north, Mill Road to the south, 124th Street to the west and 68th street to the east. The area was the Town of Granville until being incorporated into neighboring municipalities, with the final major chunk going to Milwaukee in the mid-1950s.

Tony Marquéz has opened La Estacion restaurant at 319 Williams Street in Waukesha. Marquéz had been with the Jalisco restaurant on White Rock Avenue in Waukesha. The restaurant offers a full menu and is open 9 a.m. to 11 p.m. Sundays through Thursdays and 9 a.m. to midnight on Fridays and Saturdays.

Interior Systems Inc. (ISI) has moved its corporate headquarters and project management facilities from Fond du Lac to Milwaukee’s Third Ward. The move brings 70 jobs to Milwaukee. ISI is leasing the entire 14,000-square-foot sixth floor of the Broadway Central building at 241 N Broadway. ISI designs and builds interiors for companies in the entertainment, retail, restaurant and education industries. Current customers include Harley-Davidson dealerships, McDonald’s restaurants, Kohler dealer showrooms, Trek bicycle dealerships and Cousin’s Subs restaurants. Company president and CEO Darin M. Grobe said ISI’s sales have doubled over the last five years, and that the move will let it better serve clients from throughout the US. "The new Milwaukee location enables us to compete for experienced employees with other larger markers and improves the image and accessibility of our company to clients and prospective employees," he said. ISI is also planning new facilities for its Los Angeles location and will open an East Coast location. It has been in Fond du Lac since 1979. The Fond du Lac location will continue to serve as the headquarters for its manufacturing, purchasing, logistics and installation management operations. Approximately 85 employees will remain in Fond du Lac.

Victoria and Randy Yocum have started Fair Grounds Espresso, a coffee shop at 71st Street and Greenfield Avenue in West Allis. The start-up was financed through a partnership of the City of West Allis and the Wisconsin Women’s Business Initiative Corp.

Visual Systems Inc. in Milwaukee has installed a new six-color Heidelberg Speedmaster press. The state-of-the-art $2 million-plus press from Germany is one of the only presses like it in the US, according to Mike Hummer, manager of operations for Visual Systems. The press will allow the company to print unique, high-impact work faster and at a lower cost to customers, Hammer said. It will also allow larger production runs with shorter lead times.

The Embassy Suites Hotel-Milwaukee West in Brookfield has renovated its Grande Ballroom and banquet facilities. Along with new interior design, the hotel has a new banquet menu.

The West Suburban Chamber of Commerce in Wauwatosa and the Menomonee Falls Chamber of Commerce have launched A.B.L.E.-North, a new networking program open to members of both chambers. A.B.L.E. stands for Active Business Leads Exchange. The North group will meet every other Wednesday from 7 to 9 a.m. at the North Hills Country Club, N73 W13430 Appleton Ave., Menomonee Falls. The next meeting is May 21.

The Mequon-Thiensville Chamber of Commerce is seeking nominations for its 2003 Business of the Year and Citizen of the Year awards, to be presented Sept. 23 at the chamber’s annual banquet. The business award criteria are business improvement over the years, contribution to the community and community-oriented projects, willingness to be involved in community programs, and support of the chamber. Selection of the citizen winner is based on contributions to the community and community-oriented projects, providing professional expertise or personal talents to the Mequon-Thiensville community, and participation in civic or community activities that promote the community, its residents, businesses and education organizations. Nominations are due July 11. More information can be obtained from the chamber by calling 262-512-9358.

May 16, 2003 Small Business Times, Milwaukee

Tool shop owner defies the stereotypes

By Kelemarie Lyons, for SBT

Mariam Rogers moved back to her hometown of Milwaukee after 34 years with a focused agenda: to start a manufacturing company. Her vision was to fill a need for machined and tooled products, as well as packaged products.
Little did she know that her business, Bridgeman Machine, Tooling & Packaging, also would fulfill a vital need in both the industry and the community by providing training for people in the inner city.
That training provides livelihoods for otherwise unemployed people. And that training provides workers for an under-served industry.
Rogers is very clear about her abilities. "I don’t know how to make things. I know how to run a business," she says.
She spent eight years helping an entrepreneur in Pennsylvania build a profitable machine tooling business. As part of the deal, Rogers was promised one-third of the company.
While Rogers fulfilled her obligations, the entrepreneur did not. It was at that point, Rogers asked herself, "Should I spend the energy on fighting for the one-third of the business or should I start my own?"
With some encouragement from her sons, she decided to "go for it."
Milwaukee, with its vast manufacturing industry, seemed like a logical place to locate such a business. So, Rogers opened her company in 3,400 square feet of space at 2850 N. Teutonia Ave. on April 1, 2002. Last August, she moved to a 43,600-square foot site at 7026 N. Teutonia Ave. on the city’s far north side.
Surprisingly, the company’s first contract was not to produce a thousand, nor even hundreds of machined or packaged goods for a large manufacturer.
The company’s first contract was with the Opportunities Industrialization Center (OIC) of Greater Milwaukee, to provide training to W-2 workers and create the skilled labor the industry needs.
"I met with individuals at OIC who expressed the need for training services. I knew we had the right equipment and skills to fulfill their goals," Rogers says.
Forming an alliance with Milwaukee Area Technical College (MATC), Bridgeman is providing 12 weeks of training, in which students learn a variety of skills, including: math conversion, blueprint reading, scale reading, layout tools, identification of a lathe mill and safety.
Six weeks of classroom work are followed by six weeks of hands-on training at Bridgeman.
"We encourage the students to go on for more education with an additional eight-week program at MATC. We’ll even pay for it," Rogers says.
Pointing to her forehead, Rogers recalls her father’s words, "What you have up here, can’t nobody take away."
This spring marks the third graduating class from the Bridgeman program. So far, 30 people have completed the training, and another 23 will graduate May 22.
"Opportunities are there," says Rogers.
Rogers’ full-time placement manager, Gary Ingram, is securing jobs for graduates, with starting wages of $10 to $12.50 per hour.
Rogers foresees great opportunities ahead for Bridgeman, reaching far beyond training the workforce.
She is in the process of securing her minority business certification (MBE), as well as other certifications that will help her secure government contracts and large corporate accounts.
"You don’t find women in this business; it’s a man’s field," adds Rogers.
Rogers says the accountability of "set-aside" contracts for minority- and women-owned businesses has improved.
At one time, large corporations could simply "declare" a percentage of their vendors as disadvantaged businesses.
"You get a certification number, and the corporations or government entity logs it along with your company data and actual dollar value of the business transaction," states Rogers.
Mentored by one company on the machine side of the business and another company on the packaging side, Rogers has gained the support of industry veterans.
When asked whether the mentors saw her as a competitor, she quickly adds, "Of course not. We can get contracts (as a minority, woman or disadvantaged business supplier) they can’t. By helping us succeed, they, as our suppliers, succeed."
Bridgeman cleared $250,000 in revenue in its first year, employing approximately 10 people. For fiscal 2003, Rogers projects $1.3 million in revenue.
That’s an aggressive goal in an industry that’s trying to cope with offshore competition and a shortage of trained laborers.
"The business is there," Rogers says, adding that her key challenge is funding the growth. "It’s hard for any African-American to secure financing."
After securing a $20,000 line of credit from a local bank, she quickly learned it wouldn’t be enough to support her growth projections.
"We’re going after more and looking at different banks to supply it," Rogers says.
Her advice to the African-American community in Milwaukee’s inner city is to "all bank at one place." She believes that will give the community greater financial power as a whole.
Rogers has been named to be an honorary chairman at the 2003 President’s Dinner and the National Republican Congressional Committee’s Business Advisory Council board meeting in Washington, D.C., May 21. She will meet President George W. Bush at the gala.
Rogers also recently received the Republican Party’s National Leadership Award.
In sum, Rogers defies a plethora of stereotypes. She’s an African-American woman in an industrial world traditionally dominated by white males. And she’s a Republican, to boot.
However, Rogers’ focus is on growing people. She believes financial success will come through "a good working relationship with employees." She plans on giving back some of the financial success in training, benefits and profit sharing.
Reuben Harpole, program officer at the Helen Bader Foundation in Milwaukee, says, "Mariam moved back to Milwaukee after 34 years of being away. Within a year, she’s started a manufacturing company in a city where there is a lot of negativity, not to mention a high unemployment rate for African-Americans. She’s been able to pick up experienced talent and through cooperation with OIC and the YWCA, she’s securing jobs for graduates of her training programs. Mariam is making history in Milwaukee."
When told about such praise, Rogers simply smiles and says, "Sometimes you just go about doing your thing and don’t realize the impact you’re having."

KeleMarie Lyons is the founder of Pinnacle XL, a management consulting company with offices in Milwaukee and Chicago. She can be reached via e-mail at kelemarie@pinnaclexl.com.

May 16, 2003 Small Business Times, Milwaukee

MEDC OK’s loan for new Oasis Coffee site

Oasis Coffee Service and Oasis Vending Service will use a $112,000 loan from the Milwaukee Economic Development Corp. (MEDC) to help finance development of its new location in the city’s Bay View neighborhood.
The MEDC Loan Committee approved the loan, and four others, at its May 5 meeting.
Oasis owner Cathy Rohde is purchasing and renovating a 9,578-square-foot warehouse and office building at 300 E. Bay St. – the corner of Bay and Kinnickinnic Avenue. The company had been on Fairview Avenue on Milwaukee’s west side.
The business provides commercial coffee makers and sells coffee supplies to companies in throughout metropolitan Milwaukee. It employs two people full-time and four part-time.
Ozaukee Bank is providing an additional $243,000 in financing for the projects.
The MEDC Loan Committee also approved a $290,000 loan for FS Enterprises which plans to purchase a building in Milwaukee’s Riverworks industrial area for a American Auto Beauty Carstar business.
Ferdinand and Susan Jones own the company and currently operate American Auto Beauty Carstar at 2108 N. Farwell Ave. on the city’s east side. They plan to purchase a building at 3866-3870 N. Fratney St. which has 6,360 square feet of office space and 33,372 square feet of warehouse space.
The company would occupy 20,585 square feet of the building, with the remaining space occupied by Absolute Custom Extrusions, a current tenant.
American Auto Beauty Carstar now employs 12 people full-time and one part-time. It would add six full-time employees at the new site.
M&I Bank will finance $362,500 for the move while the Joneses will use another $72,500 in equity financing.

A loan of $49,000 was approved for The Soup Market of 189 N. Milwaukee St. The Soup Market is a new business formed to continue the operations of The Soup Kitchen, a soup wholesale and retail business started in 1999 by David Jurena. Jurena sold his products at local farmers markets and to several coffee shops and cafes in the area. He was leasing food preparation space from Bella Luna Pasta when that business was sold, leading to the loss of his lease for manufacturing space.
Bella Caffe owners Tim Talsky and Jim Nowlen plan to reopen The Soup Kitchen under the new name The Soup Market, in rented space in Bay View.
The Soup Market will sell made-from-scratch soups, stews and chilis through wholesale accounts, through its retail location at 2211 S. Kinnickinnic Ave., through farmers markets and at special events.
The business will use a $74,000 Park Bank loan in addition to its MEDC financing.

In other action, the MEDC Loan Committee approved a $53,660 loan for Maddie Turner Sr., who operates Ebony Man’s World Hair Salon I and II. He plans to buy a 5,440-square-foot building at 7526 W. Appleton Ave. in Milwaukee for a third location. The hair salon would occupy the first floor and basement while offices on the second level would be rented out.
Ebony Man’s World Hair Salon I, which is now owned and operated by Turner’s son, is at 3517 W. Townsend St. while Ebony Man’s World Hair Salon II is at 4476 N. 60th St.
Turner will use a $153,000 loan from Columbia Savings & Loan in addition to the MEDC financing.

The MEDC Loan committee also approved a $60,000 loan for KRP Development Corp. to purchase property at 3002-08 N. Dr. Martin Luther King Jr. Dr. in Milwaukee. The corporation, formed by Paul Kharouf and Casey Dembowick, will buy the property, which includes an 18,350-square-foot building.
Riverwest Engineering, of which Dembowick is part-owner, will occupy half of the building. The company now employs two people full-time and one part-time. It plans to hire three more full-time employees and two more part-time workers.
Continental Savings Bank is providing $75,000 in financing for the project, while another $15,000 in equity capital is being applied.

May 16, 2003 Small Business Times, Milwaukee

How to respond to negotiation ploys

By Christine McMahon, for SBT

Question: What are some common underhanded ploys people use to get leverage in a negotiation? How do you recommend responding to such tactics?

Answer: Fortunately, the majority of business negotiations are forthright. People want to preserve the relationship, so they look for mutually agreeable solutions.
However, there are people who use ploys and tricks to get the upper hand. Sometimes it works to their advantage — in the short-run they get what they want.
Other times it backfires and they compromise a relationship.
People have long memories. When they feel the other party played by a different set of rules, trust is broken and resentment builds. It’s only a matter of time before the tricksters "get what they deserve."
Ploys are only limited by the imagination of the wily. While the list may be ever changing, we have identified six common tactics. They include:

1. Intimidation tactics – This is when the other party is abusive, insulting, hostile, loud or incessantly demanding. All of those are bully tactics. It’s not easy — in fact, it’s sometimes impossible — to negotiate with someone who is overbearing.
The best approach to dealing with this type of negotiator is to match the person’s voice tone and volume, stand up and say, "Jack, I want to continue our discussion, but not like this. If we can’t talk in a respectable manner, than I will need to leave until you are in a better state of mind!"
When you do that, if the other party continues to talk right on top of you, then say his name loud three times, "Jack. Jack. Jack." Pause. "I want to work with you in finding a mutually agreeable solution, but not like this." Pause. "If you continue, I will leave."
Usually saying the person’s name three times at the same intensity and volume as he is speaking will interrupt his brain just enough that he will stop.
If that doesn’t work, then pick up your things and say, "Jack, when you ready to talk and are more in control of yourself, call me." Then walk out.
I once had a boss who was just like this. Intimidation was his tactic of choice. I was young and inexperienced. Then I read a book about how to handle difficult people. It only took two confrontations to end his insulting and belittling behavior. The key was practicing until the shaking stopped and I felt confident.
The first time I used the tactic, I interrupted him saying his name, and told him I was going to leave. He threatened to fire me. I swallowed my fear and said, "Jim, I do my job and gets results. I deliver. I am not paid to be insulted and belittled by you. Fire me if you must. But know that I will make sure every executive in this company knows exactly what you said to me and how you said it. I promise I won’t leave a detail or insult out."
I was shocked – it worked!
The next time he raised his voice and started to insult me, I only had to say his name once and he just shut up.
It’s been my experience that most people who threaten you or use anger as a tactic have a weak negotiating position they are trying to hide. Or they are trying to see just how strong of a backbone you have. Best advice: Hold your position. Have staying power. Let your confidence rule.

2. Stonewalling – This is when the other party refuses to budge from their position. You have three options.
First, explain the dire consequences of not investigating other possible options. In some cases, the dire consequences may be that you will be forced to walk away and let the negotiation fail.
The second option is to stonewall your position. The risk in taking this approach is that the focus of the negotiation becomes one of posturing rather than resolution. Rarely does it facilitate movement toward an agreeable solution.
The third option is to walk away. Say, "John, I’d like to find a way for us to explore some possible solutions. If we are unable to talk through the issues, then you will force me to walk away. I would prefer not to do that, but I am prepared to do so."

3. Evasion Tactics – You can expect some degree of evasion in every negotiation. This is often purposeful so the other party can assess your negotiating acumen at the bargaining table. What matters is the motive behind the evasion. What is the person avoiding? What would this information disclose that would impact your position or decision? How does this work to the other party’s advantage?
A consistent pattern of evasion is often a veil to hide something of importance.
If you are unsuccessful, tell the other party that you are at a standstill unable to move forward unless you receive the information you requested.
Assuming you are not satisfied with the response, you must walk away and let the negotiation fail.
If you do proceed, be sure to include in the written agreement any provisions you feel are necessary to protect your interests.

4. Stalling tactics – These are often used when the other party knows you have a deadline. Their intent is to slow the process down so they garner a better deal from you.
If this is the case, you may want to inform the other party that you have found a new option that has promising potential and you need to know whether he or she is still interested in talking or not.
If you find that you can’t get through to that person directly, leave a voice-mail message. In your message, state that if you don’t hear back by a certain date, you will assume he or she is not interested.
That almost always gets a return telephone call. If the person doesn’t call, then at the very least you know he’s not interested.

5. Deadline pressures – This is when the other party uses a deadline as a threat to get you to accept unreasonable demands. They make an unreasonable offer and then give you a short timeframe with which to make a decision.
You can turn this to your advantage by saying, "Since you have a deadline and can’t discuss the issues, I’ve given you my best offer. Let me know by your deadline if it’s acceptable."
That leaves the next move up to the other party. You can bet if it was a ploy, they will come back with a restatement of their position.

6. Taking you out of the loop: This is when someone goes around you and tries to negotiate the deal with someone else in your organization. It’s usually because they didn’t like the terms you presented. They want to find someone else who might be a softer touch.
The best approach is for the new negotiator at your company to listen intently to everything the other party says.
Your associate needs to ask probing questions to learn about motives and outcomes. Then he or she needs to tell the other party, "I appreciate you contacting me. At this time I am not prepared to respond. Where can I reach you on __?" (Give yourself at least two days.)
Your associate should then discuss that conversation with you.
Then on the scheduled date, call the other party and say, "It appears that it is our company policy not to get involved with another employee’s negotiation unless invited by that co-worker. You will need to resume negotiation discussions with that person."

These are some of the most common tricks and ploys. Rarely are these effective in building relationships. In fact, they can be the trigger that causes the negotiation to fail. Once respect is lost, the negotiation becomes personal. The original intent to achieve some degree of win/win is negated. It now becomes a fight over pride and territory, and no one really wins.

Christine McMahon is the owner of Christine McMahon & Associates, a training and coaching firm in Milwaukee. She can be reached at 414-290-3344. Small Business Times readers who would like a negotiating situation addressed in this column can send a fax to 414-290-3330, or e-mail her at: ccm@christinemcmahon.com. Her column appears in every other issue of SBT.

May 16, 2003 Small Business Times, Milwaukee

Support business by supporting the arts

by Jo Hawkins Donovan, for SBT

Many people I coach hold leadership positions in arts organizations in my community. It is a privilege to work with these executives who are so highly committed to their work.
I remember when I first moved to this city, more than 20 years ago, how impressed I was with the caliber of visual and performing arts available. I know we have a world-class museum, a world-class institute for art and design, a ballet company, a symphony orchestra, opera companies and theatre groups that fill us with delight and pride.
The business case for the arts is pretty well broadcast around this and any other city. We know when we want to attract new professionals to our town, we "show off" our many artistic venues. It’s quite well documented that our outstanding cultural community adds to the attraction and thus the growth, of our city.
Richard Florida has published a timely perspective on the relationship between creativity and the future of a city’s economy. His book, The Rise of the Creative Class, makes a good case for regional leaders taking a new look at creativity as an economic engine. Florida says we’ve got to be seen less as an industrial center and more of a creative center. "Fill the factories with art and music. Let’s be wild", he urges. "It’s not just about the amenities of a city," says Florida. He sees creativity and commerce as the same things.
Beyond business though, even beyond delight and pride — and more significant, is that part in each of us, that slice of your humanity and mine, that is touched by the experiences afforded us through these non-profit organizations.
Who has not felt time stand still when being drawn into a painting or transported by a breath-taking performance? I have so many memories of standing and applauding for all I’m worth, thinking how proud I am to be a part of this human race. I’ll think, yes, we are capable of slimy, deceitful behavior, we human beings. And yet we are capable of this too, this excellence, this collaboration, this giving from the top of our talents and the bottom of our hearts.
I always want every child in town to have that experience, to be in the presence of excellence, to resonate with the finest that we can produce as a species. Nearly every arts organization here supports programs designed toward that end. I think they bend over backwards to make it possible for anyone 4 or 94 years old to have access to the high level of achievement that flows out of artistic expression. "Come; leave your struggles behind for a while. Absorb the magic of a Georgia O’Keefe, or feel your spirit dancing atop the strings of Samantha George’s violin."
So no problem, you might be thinking. We are immersed in that rich and diverse cultural community, true. The problem is that all of these arts groups are feeling the pinch of the economic squeeze that is disturbing the whole country.
Business owners who are announcing hiring freezes and salary cuts may feel they have to slash the amounts they customarily contribute toward our arts community. I encourage them to take a longer view, and consider the connection between supporting the arts and breathing new life in the economy. We need these groups and we need the quality that emanates from them to grow ever stronger, not to be diluted for lack of funding.
Commerce in our city has provided the oxygen that allowed the arts organizations to thrive. As a city, we need that life force to continue strong. We can’t expect our city to shine as brightly without our arts organizations. And we can’t expect them to forever provide us with the same caliber of inspiration and delight if funds are shrinking.
Granted, it may take creative thinking to figure out how to continue that support. I’ll bet though, that employees would enjoy being a part of that kind of brainstorming. I’ll bet too, that every arts organization in town would welcome collaborative partnerships in seeking solutions. It is just too important to cross our fingers and hope.
Then there are the rest of us (a bow to Jacqueline Mitchard). When fretting over our individual budgets, we can choose to "cut" somewhere else, and continue our support for the arts, through cash contributions and season subscriptions. We can give a birthday gift of a pair of symphony tickets instead of some useless trinket. We can respond to the many invitations we receive in the mail for fund-raising events. We can attend more of them — and be entertained well in the process. We can simply be mindful that this is the time for us to demonstrate our appreciation for all we have. It will not magically continue.
We can honor these words of Johann Wolfgang von Goethe: "One should, every day at least, hear a little song, read a good poem, see a fine picture and, if possible, speak a few reasonable words."
I wish you many days filled with the best of song, pictures and words.

Jo Hawkins Donovan has a coaching and psychotherapy firm in Whitefish Bay, and can be reached at 414-332-0300, or jo@hawkinsdonovan.com. The firm’s Web site is www.hawkinsdonovan.com. Hawkins Donovan will respond to your questions in this column. Her column appears in every other issue of SBT.

May 16, 2003 Small Business Times, Milwaukee

Sydney Hih building assessment hits $1.6 million
Eisenberg threatens lawsuit against alderman

By Charles Rathmann, of SBT

Attorney Alan Eisenberg is threatening to sue Ald. Paul Henningson over Henningson’s discouraging remarks to potential tenants of the Sydney Hih Building at 300 W. Juneau Ave. in downtown Milwaukee.
Eisenberg and at least one potential building tenant claim Henningson not only suggested the building would be torn down as a result of an adjacent redevelopment project, but refused to even bring applications for liquor licenses for lessors before the city’s Utility and Licenses Committee.
The building, which has offered low-cost office, gallery and studio space since the 1970s, is within a 26-acre redevelopment area created by the removal of the Park East Freeway spur.
Last November, Henningson told Small Business Times he had never claimed the building would be demolished, but he did make other remarks about the property, referring to it as "a cancer on the neighborhood."
Henningson also claimed that Eisenberg, whose Knapp Street Realty has the building listed for sale, is likely to "sit" on the property until it impacted redevelopment plans for surrounding land enough for someone to offer Eisenberg the $1 million asking price.
"Right now, he wants a million dollars for it, and that is absolutely absurd," Henningson said. "The place across the street, which used to be a Car-X, sold for $600,000, and that was twice the space. So ostensibly, his land is worth $300,000. And the building isn’t worth a penny."
However, in May, the assessed value of the building rose to $1.6 million from $722,000, according to a city assessment database, and one potential lessor came forward and confirmed that Henningson was claiming the building would be torn down.
"It’s just a matter of time, and we are going to sue him," Eisenberg said of Henningson.
Henningson, who was indicted in January of last year for extortion and embezzlement, did not return a reporter’s recent phone calls regarding the matter.
Eisenberg said several major restaurateurs expressed interest in the property or actually signed leases until they found Henningson would block a liquor license. While one potential lessor mentioned by Eisenberg – Il Mito owner Michael Feker – denied license issues kept him out of the building, one businessman who had plans for a nightclub at the site confirmed Eisenberg’s account.
"I never got to talk to the alderman," nightclub owner Darcius Young said. "His assistant – she told me that he said he would not be for a license there. There may be some other places downtown. He (Henningson) doesn’t have a problem with development, but that place, it was a no-no. He didn’t even have the courtesy to call me or put me on the calendar to even be heard. I filled out an application for a class B license, and I never heard back from them. … On the application, it says they get back to you in six to eight weeks."
Young, who at the time owned a nightclub at the intersection of 17th and Chambers streets on the city’s north side, already had a liquor license he wanted to transfer to the Sydney Hih site. The building was the site of the Mine Shaft night club in the 1970s and 1980s.
"I was told it was going to be for redevelopment – that building might not be there," Young said. "I was told by Alan Eisenberg that the building was not going to be torn down. But I feel (the city) kind of started their redevelopment plans with the building still there."

Analysis says Sydney Hih redevelopment could be lucrative

According to an analysis performed by a University of Wisconsin-Milwaukee architectural student, the Sydney Hih Building – actually a collection of buildings known as the Nicholas Senn Block – could be profitably transformed through an adaptive reuse process.
The analysis assumes total redevelopment costs of just over $3.3 million, including a purchase price of $850,000.
Peter Sadowski, who presented his master’s thesis on a nearby property May 9, has been studying reuse options for the building since September of last year.
According to Sadowski, factors that would work in favor of redevelopment of the Sydney Hih building at 300 W. Juneau Ave. include the availability of historic preservation tax credits and the fact that new construction would certainly be much more expensive than redeveloping the existing structure.
The building’s location near the Bradley Center on a high-traffic intersection, with an average 24-hour traffic count of 14,200 vehicles is key, with access to the Riverwalk, the Water Street entertainment district and other amenities, according to Sadowski.
Properly redeveloped, the Sydney Hih could support a lease rate of $38 per square foot, Sadowski concluded.
However, challenges for the Sydney Hih building will include parking. The most logical solution, according to Sadowski, would be to purchase adjacent property from the City of Milwaukee, adding that "in efforts to encourage the restoration of this particular property, the city has acknowledged the willingness to contribute either monetarily or with land rights. There may be a good chance that the city would contribute land rights to the north or west, since it will cost them nothing and they will receive a maintained, renovated showcase building that represents the original downtown."
Other challenges would include the need for redesigned exits to comply with international building codes, the need for new mechanicals and plumbing and the fact that floor plates between the different structures in the building are uneven, necessitating a system of false floors to make the space more usable, Sadowski said.

May 16, 2003 Small Business Times, Milwaukee