The headlines and developments from 2017 have set the stage for tremendous opportunity for northeast Wisconsin businesses in the year to come.
In line with our annual retrospective tradition, New North B2B presents our list of the Top Ten stories affecting the region’s business community during the past year.
By Sean Fitzgerald, New North B2B publisher
- Workforce woes – Low unemployment
Finding workers to fill open positions at many employers across northeast Wisconsin during 2017 was as tough as it’s been in more than a generation. The good news is that lots of new jobs were created – more than 2.1 million nationally during the past year, according to the U.S. Department of Labor, driving the country’s unemployment rate down from 4.7 to 4.1 percent.
In Wisconsin, more than 32,000 new jobs were created in the period from July 2016 to July 2017, driving the unemployment rate down from 3.7 percent to 2.8 percent in October. Local unemployment rates dropped below the 3.0 percent threshold as well by the end of the year, with Fond du Lac County registering the lowest rate of unemployment at 2.4 percent.
Wisconsin Herd – Oshkosh Arena
In one of the most prominent economic development victories from the region this past year, the Milwaukee Bucks announced in February it would locate its new NBA Development League team in Oshkosh beginning with the 2017-18 season. As part of the deal, Oshkosh-based Fox Valley Pro Basketball constructed a new $20 million, 3,500-seat arena in the city’s newly designated Sawdust District near Lake Winnebago.
Now called the Menominee Nation Arena, the facility is hosting the Wisconsin Herd franchise for the Bucks as well as various other concerts and regional sporting events. City leaders expect the facility to attract other commercial and mixed-use development to the neighborhood.
In February the city’s common council approved $7.25 million in tax incremental finance assistance for various environmental remediation and municipal infrastructure improvements on the 8-acre site of a former wood furniture manufacturer on South Main Street.
Wisconsin Economic Development Corp. also awarded the city a $250,000 grant to help finance some of the public infrastructure at the arena, which eventually opened in early December.
Oshkosh Corp. headquarters retained
Oshkosh Corp., one of the region’s largest employers with an estimated more than 4,000 employees in the Fox Valley, sought legitimate proposals this past fall from other communities across Wisconsin and around the country to host a new headquarters facility it plans to construct.
In early November the City of Oshkosh Common Council made its pitch to retain the city’s namesake employer, offering to sell about 35 acres of its Lakeshore Municipal Golf Course near the Interstate 41 Bridge crossing Lake Butte des Morts to the company for $3.5 million. The city also extended an offer to provide roughly $7.2 million in municipal infrastructure improvements in and around the property, as well as an incentive of $6 million in tax incremental financing returns if Oshkosh Corp. constructs a headquarters facility valued at $18.5 million or more by the end of 2019.
The company’s board of directors apparently evaluated several options when it met in late November and eventually decided to remain in Oshkosh. It plans to break ground on the construction of its new headquarters facility sometime in spring 2018.
Brown County Arena Rebuild
When Brown County and Village of Ashwaubenon officials received the results of a facilities study on the aging Brown County Veterans Memorial Arena and Shopko Hall in early March, they learned a more modern, larger exhibit hall could increase annual economic impact to the region by as much as $13 million each year. The study noted the 60-year-old arena and 30-year-old Shopko Hall have various deficiencies to host modern conventions that would likely not be improved by remodeling the facilities, and it offered various recommendations to demolish the arena and former Packers Hall of Fame building and build a 100,000- to 120,000-sq. ft. exhibition center in its place.
The recommendations of that study were fast-tracked over the next two months and developed into a proposal to construct a $93 million, 120,000-sq. ft. multipurpose exposition building in Ashwaubenon to replace the arena and Shopko Hall. The proposed plan received a $1 million pledge from the Green Bay/Brown County Professional Football Stadium District in late April, while later in the summer seven municipalities across the Greater Green Bay area agreed to use a portion of collected hotel room tax revenues to help pay for the construction debts on the proposed facility after paying off the existing debts associated with the Resch Center.
The project will also receive a nearly $15 million financial boost from the half-percent county sales tax approved by the Brown County Board of Supervisors in May. That same board eventually approved a massive capital expansion package in August, which included a green light on the proposed expo center, which is expected to begin construction in 2020.
- Brown County reinstitutes sales tax
In May the Brown County Board of Supervisors overwhelmingly approved a measure to implement a half-percent county sales tax for as many as six years between 2018 through 2023 to fund various capital improvement projects in the county, as well as to help lower the annual property tax levy.
The new sales tax started Jan. 1 and is expected to generate as much as $147 million over the next six years. It would contribute proceeds toward various proposed projects, including $60 million for roads and infrastructure, $20 million to revamp four libraries, $15 million toward a new exposition center, and $20 million for a jail and mental health center expansion, among other smaller projects.
Brown County previously imposed a half-percent sales tax from 2001 to 2015 to help finance the $295 million renovation of Lambeau Field completed in 2003. It was repealed after the bonds were paid off and enough additional revenue was generated to finance maintenance responsibilities at Lambeau Field through the end of the Green Bay Packers current lease in 2031.
The resolution adopting the current sales tax includes a provision that if property tax rates increase at any point during the next six years, the county sales tax would cease at the end of that year.
Northland Hotel back on track?
The estimated $35 million renovation of the historic Hotel Northland in downtown Green Bay had more than its share of bumps in the road during 2017, halting progress on the project for more than 12 months while various issues of ownership, unpaid contractors and concerns over the city’s investment ultimately led to the property going into receivership.
In January, an agreement between Frantz Community Investors – the development group which hatched the project – and Milwaukee-based KPH Northland Hotel left many with the impression that the Frantz group was divesting itself from the project altogether, but a subsequent civil case indicated Frantz intended joint ownership with KPH. Meanwhile, financing for the project had diminished as First Merit Bank (now Huntington Bank) – the senior financier on the project – withdrew $12.8 million it committed toward the project.
The City of Green Bay had already committed $4.7 million toward the project to redevelop the century-old building into a 160-room boutique hotel, and in March it approved a $500,000 bridge loan to KPH Northland to help strengthen its position as its sought additional financing in an effort to resume work. Following a lull in progress through most of the summer, the Green Bay Common Council approved a plan from Virginia-based Octagon Partners to send the project into court-appointed receivership if Octagon would provide $16.5 million to take a principal equity position on the project. The court approved a receivership plan in early October aimed at paying money owed to various contractors, vendors and other lien holders. Construction resumed once again late in the year with hopes the project could be completed this coming summer.
Foxconn plants its flag
In what’s hailed as the largest private investment ever by a foreign company on U.S. soil, Taiwan-based Foxconn Technology Group – the world’s largest manufacturer of electronics – selected southeast Wisconsin in July as the destination for a $10 billion production campus it intends to develop in the U.S. by 2020. Wisconsin was in competition with several other states across the country attempting to lure the technology giant, which promised to create as many as 13,000 new jobs producing LCD (liquid crystal display) screens for computers, healthcare, self-driving cars, safety and surveillance, education and entertainment.
The effort to finalize details of the incentive package occupied much of the state legislature’s time in August and September, which resulted in a bill that provides up to $1.5 billion in payroll tax credits to Foxconn as it creates and maintains jobs in the state. The package also includes up to $1.35 billion in capital investment credits, as well as $150 million in sales tax exemptions on the materials used in the construction of the facility. Economic development leaders across the state are encouraged that Foxconn’s operations will utilize a vast supply chain of other Wisconsin businesses.
Appleton Coated receivership
In August, Appleton Coated of Combined Locks filed for Chapter 128 bankruptcy protection while it sought a buyer to help it continue operating its coated paper mill and restructure what company officials called “burdensome debt.” They cited a decline in demand for graphics paper products as well as currency exchange rates that favor imports of coated paper stock as reasons for the company’s financial struggles.
Within a month after going into receivership, Appleton Coated had shut down five of its seven papermaking machines and laid off nearly 80 percent of its 620 employees. In early October a court approved the sale of Appleton Coated to Los Angeles-based Industrial Assets Corp. for $21.5 million with the intention of finding a buyer to continue operating the paper mill. Industrial Assets had indicated if it couldn’t identify a buyer to continue operating the mill by the end of December, it would likely liquidate the equipment and the 55-acre property along the Fox River to recoup its investment. No announcement had been made prior to B2B’s press deadline for this edition.
UW Oshkosh Foundation bankruptcy
The University of Wisconsin Oshkosh Foundation filed for bankruptcy in August after several months of difficulties stemming from improper financing and credit backing for a handful of real estate developments it initiated between 2010 and 2014.
The matter became public in January when the Wisconsin Department of Justice filed a civil lawsuit against former UW Oshkosh Chancellor Richard Wells and former Vice Chancellor of Administrative Services Thomas Sonnleitner claiming both misappropriated millions of dollars of university funds to finance five UW Oshkosh Foundation real estate projects: Best Western Waterfront Hotel in downtown Oshkosh, Oshkosh Sports Complex, UW Oshkosh Alumni Welcome and Conference Center, and two dry-fermentation biodigestors in Oshkosh and Rosendale. The suit was part of an ongoing investigation that began in April 2015 at the urging of the UW System Board of Regents and Current UW Oshkosh Chancellor Andy Leavitt.
The University of Wisconsin System was considering a potential settlement with creditors to avoid filing bankruptcy, but withdrew involvement earlier in August after facing political pressure from state legislators. The foundation reported $15.9 million in total liabilities when it filed for bankruptcy, including $6.7 million owed on the biodigestor in Rosendale and $5.7 million in debt associated with the alumni welcome center.
Titletown District opens
The Green Bay Packers opened the first phase of its $65 million Titletown District in September, unveiling the results of more than two years of construction on the 35-acre entertainment and hospitality development immediately adjacent to Lambeau Field. The year-round tourism attraction features a 10-acre public plaza with a full-sized football field, winter ice skating rink, three-story tubing hill and playground among other amenities. The development is flanked by a new six-story Lodge Kohler hotel, restaurant and spa, as well a 20,000-sq. ft. Hinterland Restaurant & Brewery and a 30,000-sq. ft. Bellin Health Sports Medicine Clinic.
In July the Village of Ashwaubenon Board of Trustees approved a tax incremental finance district for the development which could reimburse the Packers up to $12.5 million during the next 15 years to help cover various infrastructure costs such as water mains, sanitary sewer, roads and sidewalks. The Packers are considering a residential development for the second phase of the district. Once complete, the total Titletown District development could add as much as $95 million in taxable property value.
Notable retirements this past year:
Appleton Area School District Superintendent Lee Allinger retired in June after 10 years at the helm of northeast Wisconsin’s second largest school district.
Ashwaubenon Village President Michael Aubinger passed away at the age of 63 after succumbing to cancer. Aubinger was elected to the village’s top post in 2009 and was credited with leading the charge on several economic development and community improvements, including the expansion of Green Bay Packaging, the Titletown District development and Ashwaubenon High School.
ThedaCare President and CEO Dr. Dean Gruner retired in June after leading northeast Wisconsin’s largest employer for the past nine years.
Fond du Lac County Economic Development Corp. Executive Director Steve Jenkins left the organization in June to take a position with another economic development agency in New Mexico.
2017 Honorable Mention
(in no particular order)
Kimberly starts to redevelop old mill site
Appleton-based Integrity Construction began construction of 49 residential townhomes on the site of the former NewPage paper mill along the Fox River in Kimberly, marking the first development on the 90-acre site since the mill closed in 2008. The Village of Kimberly Board of Trustees approved as much as $840,000 in tax incremental finance assistance if the developer creates at least $10.5 million in improvements at Papermaker Estates.
Various business closures
In April, VF Corp., the parent company of JanSport in Greenville, sold its licensed sportswear business to Florida-based Fanatics, Inc., which shut down the Fox Cities screen printing facility, laying off 380 employees. Pioneer Metal Finishing closed its Oshkosh plant in November, laying off 52 employees, while PolyOne in Ripon announced plans to close its extruded plastic sheet and packaging facility in early 2018, and began laying off its 70 employees beginning in December.
Appleton-based U.S. Paper Converters Inc. closed its paper and film converting facility at the end of the year, displacing 52 employees, and Ryder Integrated Logistics closed its Greenville offices and warehouse, laying off 159 employees.
Lastly, Canadian cheesemaker Saputo announced it will close its Fond du Lac manufacturing facility this spring and move operations to western Wisconsin, laying off 126 employees.
West Shore fuel pipeline closed indefinitely
In April, Illinois-based West Shore Pipe Line Co. informed state officials it will not replace its deteriorating petroleum pipeline to Green Bay which has been shut down since March 2016, leading to higher gasoline prices in northeast Wisconsin. The 110-mile pipeline which connects a terminal in Milwaukee to the Port of Green Bay was originally built in 1961, but needs repairs at several points which will require millions of dollars in expenses.
Appvion Chapter 11 and layoffs
In early October, Appleton-based specialty papermaker Appvion, Inc. went into Chapter 11 federal bankruptcy protection in an effort to restructure its debts and develop a sustainable capital structure. In September the company announced a layoff of 61 employees from its warehouse and distribution center, and in November it announced plans to consolidate its carbonless paper coating and rewinding operations into a facility it owns in Pennsylvania in 2018, effectively trimming its Fox Valley workforce by 200 hourly and salaried jobs in Appleton.
UW System reshuffled
In November the University of Wisconsin System Board of Regents approved a plan to merge administration of the state’s two-year UW Colleges with four-year UW institutions beginning in July 2018. In northeast Wisconsin, the plan calls for UW Fond du Lac and UW Fox Valley in Menasha to operate under the umbrella of UW Oshkosh, while UW Green Bay will provide oversight of UW Marinette, UW Manitowoc and UW Sheboygan.
Successful school referenda
On April 4, voters in the Green Bay Area Public School District approved a $68.25 million borrowing referendum to improve facilities at six elementary schools across the district, including construction of a new Baird Elementary School for $25.8 million. Green Bay voters also authorized the district to exceed state spending caps by $16.5 million a year for the next 10 years for various operational expenses. Separately, voters in the Little Chute School District approved a request to borrow $17.8 million to renovate and expand classroom space at the high school/middle school campus, as well as a new addition for school and district offices.
Schneider National trades public
Schneider National Inc. of Ashwaubenon held its initial public stock offering in April, raising $550 million by selling nearly 29 million shares at $19 apiece. The trucking and logistics company trades on the New York Stock Exchange under the symbol SNDR.
St. Norbert College record gift
St. Norbert College in De Pere received a $30 million gift toward its endowment in October from the Donald J. and Patricia A. Schneider Family, marking the single largest financial gift ever received by the school. The gift is one of many the school has received from the family of the former president and CEO of Schneider National in Ashwaubenon, who was a St. Norbert College alumnus, former trustee and adjunct instructor.
In October, the Green Bay Packers and Microsoft Corp. unveiled plans for TitletownTech, which will include a start-up business accelerator, a venture capital fund and a boot camp for established companies to develop new digital technology products and services. The Packers and Microsoft committed $5 million each toward TitletownTech over the next five years, including constructing a facility in the Titletown District adjacent to Lambeau Field during 2018.