Bruce Murphy
Murphy’s Law

Milwaukee Goes Crazy for Research Parks

By - Jun 19th, 2001 03:58 pm
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Wisconsin is supposed to be suffering from a brain drain, and southeast Wisconsin is said to lack the kind of high technology industries you find in a research park. Yet we now have three proposals for research park-like developments. The Waukesha County Board wants to create a technology business incubator and Sen. Gary George (D-Milwaukee) wants the state to provide start-up funding for a research park at the old Pabst Brewery. Meanwhile, the research park on the Milwaukee County grounds has been struggling to develop for twenty years.

“I don’t want to be critical of the Senator’s effort to bring some money to revitalize the Pabst property,” says David Zepecki, Milwaukee

“I don’t want to be critical of the Senator’s effort to bring some money to revitalize the Pabst property,” says David Zepecki, Milwaukee County’s director of economic development. “But I know how difficult it was to get the research park in Wauwatosa up and running.”

Difficult would be an understatement. The research park was first proposed by a task force in 1981, but it took four more years of discussion by the Milwaukee County board before it created a non-profit corporation, another five years before the first director was hired, and another decade before it began to function as even a second-class research park. It still ranks far behind major research parks like the one connected to the University of Wisconsin-Madison.

The odds against another research park succeeding in southeast Wisconsin seem rather long. Yet both the Metropolitan Milwaukee Association of Commerce and the Greater Milwaukee Committee have offered guarded support for George’s proposal. But George’s idea, to try attracting high tech and other industries to some old brewery buildings, lacks the specificity of the successful research park model.

John Schade is a consultant to research parks, and was the first director of the Milwaukee County Research Park Corporation. He says most of the research at these parks is actually done by a university, which then spins off companies, often created by working closely with the faculty members who developed a unique innovation. “Of the 170 or so university-related parks there are not a lot of them operating as they were intended to,” he notes. “There’s probably a core of 15 to 25 that are doing pretty well.”

One of the best in the country is Madison’s, because the university does some $500 million a year in research. “Basic research is the key resource,” Schade notes. The main thing a research park does is make it easy for entrepreneurs to connect to key university departments and faculty. “At a huge university, it can be very difficult to get that access.”

Guy Mascari, director of development for the Milwaukee County research park, offers an example of such synergy. “Two executives from GE Medical started a company with imaging technology developed at the Medical College of Wisconsin,” he notes. The company, IGC Medical Advances, now does $15 million in annual revenue.

“It’s hard to see any advantage for a company associated with the Medical College to want to locate downtown.”

But the list of such examples is short. Of 60 companies now located at the research park, only six have an affiliation with the medical college, Mascari says. “It’s progressed slower than people might like,” Zepecki once conceded.

For starters, says Schade, you need a “critical mass” of research being done by a university – at least $50 million annually. For years, no local university approached this, but the medical college has blossomed in the last 15 years and now does $100 million a year, double what it did just six years ago. That’s a relatively new but very promising base to build on, Schade says. “The Medical College has always been entrepreneurial about allowing their faculty to create ties with technology companies.”

You also need a tight affiliation between the park and the university, Schade says. But Milwaukee’s research park has been undermined by county politics, he once noted. (Schade was replaced in the mid-1990s in favor of long-time county bureaucrat Gerald Schwerm, who was better at handling the county board. Schwerm was succeeded by current director, William Drew.)

“It really operated more as a land bank,” Schade notes. “You find corporate headquarters, insurance companies and other companies that are not related to a research park located there.”

But in recent years, Mascari says, the park’s technology and innovation center has come on strong. It now has 37 companies, mostly start-ups, doing a combined $70 million a year in revenues. “That’s impressive,” says Schade. “That’s a really good sign, I’d say.”

“We’ve reached a critical mass,” Mascari says. “Companies want to locate here simply because there are other technology companies here.” Given how close the county grounds are to Waukesha, Milwaukee’s park could provide competition for any fledgling effort to start up another technology incubator.

As for a Pabst park, it could be at an even greater disadvantage. Milwaukee County’s park is “half a mile from the Medical College,” Mascari notes. “You can have a faculty member teaching there and still consult with a company here. It’s hard to see any advantage for a company associated with the Medical College to want to locate downtown.”

And without the Medical College, there’s little university research to draw on. “[Milwaukee School of Engineering] by definition doesn’t do basic research,” Schade points out. “Marquette and [University of Wisconsin-Milwaukee] don’t do much.” Mascari estimates the three colleges combined do less than $20 million in research a year.

Then there’s the question of retrofitting old brewery buildings for high tech companies. “How much can be converted to usable space?” asks Mascari. “Probably not all of it.”

Finally, a Pabst park might find itself competing with the one area of downtown that attracts technology companies – the Third Ward. “There’s a lot of technology down there at places like Verizon,” Mascari adds. “It’s neat space and inexpensive.”

As others have observed, young high tech entrepreneurs tend to be attracted to areas similar to the Third Ward, with nearby art galleries, cafes and other urban amenities. “There is an atmosphere there that technology companies are drawn to,” Mascari says.

The Pabst land offers more space (about 21 acres) than the Third Ward, but Schade notes one of the most successful research parks in America has just 12 acres in downtown Philadelphia: “They built up [with skyscrapers] rather than out.”

All of which suggests a Pabst research park “wouldn’t be too viable,” as Schade puts it. Even supporters of the idea, like Robert Milbourne, executive director of the GMC, express misgivings. “It is somewhat premature to move ahead with a budget appropriation,” he says. “More work will be necessary to plan a project with all the affected parties.”

Schade says there may be potential to do something smaller, like a technical training and development center that draws on university faculty to provide training. But even that would take considerable planning.

“This is often what happens,” he notes. “We have some land, so let’s create a research park. That’s putting the cart before the horse. You should do a survey of potential tenants and find out where they want to be.”

As Mascari concludes, “Ideas are dime a dozen. It’s how you execute them.” Or don’t.

Short Takes

In response to our item on the deluge of lobbyists working the electric power issue, we received an e-mail from an elusive organization called the “Independent Power Producer Watch,” which pointed out that many of the lobbyists “were all working for Independent Power Producers, the same companies that caused the California mess.”

Among others, this includes former acting governor Marty Schrieber, former Tommy Thompson aide John Mathews, who now bills for Foley & Lardner, former Senate Democratic Majority Leader Joe Strohl, and the rather-less-famous Craig Peterson of Zigman Joseph Stephenson, who is an investor in milwaukeeworld.com.

Our correspondent, however, neglected to mention the many lobbyists working the other side of the issue with state legislators. Wisconsin Energy Corp., the parent company of Wisconsin Electric, lists 17 lobbyists, including former Democratic speakers Walter Kunicki and Democratic Rep. Bill Broydrick, Broydrick’s employee Moira Fitzgerald (who appears as a panelist on the Mark Belling show), and H. Carl Mueller, former chief of staff for Mayor Norquist. These lobbyists would no doubt agree with our correspondent that WEPCO should be providing all our power rather than those independent producers. Whichever side wins, all the lobbyists will bill a lot of hours.

This article was originally published by Milwaukee World.

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