Bruce Murphy
Murphy’s Law

Why Businesses Are Moving To The City

Many are moving from suburbs to Downtown and Walker's Point, seeking younger workers.

By - Apr 21st, 2015 11:35 am
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Historic Third Ward and Walker's Point (Photo by Jeramey Jannene)

Historic Third Ward and Walker’s Point (Photo by Jeramey Jannene)

In January 2015 Plunkett Raysich Architects announced it was moving back to the greater Downtown area. The company was founded in 1935 and located Downtown, but moved to the suburbs in the late 1960s and later to the city’s far Northwest Side. Now it’s coming back to where it started.

“It’s really a location that’s thriving now,” says David Raysich, managing partner of the firm. “Downtown, the Third Ward, Walker’s Point, Milwaukee is a happening place right now.” The move, he says, will help the company recruit and retain young employees. “Younger people want to be Downtown, they want to be where the action is, where all the restaurants are, where Summerfest is, with all the things to do at night.”

Much has been made of Northwestern Mutual’s decision to build its huge new addition Downtown, but there is also a long list of companies that have decided to move from the suburbs to Downtown or Walker’s Point in just the last few years, including Stormwater Solutions Engineering (from Pewaukee in 2012), Corvisa Services (Wauwatosa, 2012), Natural Resources Technology (Pewaukee, 2013), Readers Digest (Greendale, 2014), Irgens (Wauwatosa, 2014), HSA Bank (Glendale, 2014) and Stark Investments (St. Francis, 2015).

Charles “Chad” Wilkins, head of HSA Bank, told the Milwaukee Journal Sentinel that its move to Schlitz Park in Downtown embraces “a great location” where “all of the amenities will help us attract new talent.” He noted the proximity to downtown restaurants and entertainment, the RiverWalk and access to public transit.

Mayor Tom Barrett says this trend is part of a two-fold process. “What we’re continuing to see is a growth in the residential population of Downtown and adjoining areas, which means a growing work force, which makes it more attractive to companies.”

In the last decade, from 2004 to 2014, developers built 6,348 new residential units in greater Downtown, city statistics show, and an additional 765 units are under construction. This occurred despite a drastic slowdown in real estate development from 2008-2013, due to the Great Recession.

“We absolutely expect there to be more growth in Walker’s Point,” Barrett says. “From Downtown to the Third Ward to the Fifth Ward, those are really hot areas.”

With added residential density, there are more potential customers for restaurants and bars and other nightlife. Within a ten-block radius of 1st and National is the hottest restaurant scene in all of metro Milwaukee, and Plunkett Raysich’s new headquarters will be on S. Water St., “with all these restaurants within walking distance for lunch,” Raysich notes.

The increase in residential units in greater Downtown goes back to the 1990s, and began under Mayor John Norquist. Since 2000, the downtown population has increased by nearly 26 percent, the downtown Business Improvement District (BID 21) found. “In 2012, the media age of downtown residents was 29.9 years old,” the BID’s website notes.

As for business, the BID now counts 1,200 businesses in the downtown area — and the number is growing.

The BID did two surveys of downtown businesses, both of which found business executives had very positive impressions of the area.  Its 2007 study interviewed 89 CEOs of large companies and 62 percent said the downtown business climate was better than it had been three years before that and 63 percent felt it would be even better three years later. Typical comments were that “Our downtown location says we are successful, which is worth it’s weight in gold,” and “Being located downtown gives you the pulse of the Milwaukee community,” and “The big shots are still downtown.”

The BID’s 2009 study of 46 small business CEOs had very similar results. “Small companies choose to locate downtown for the same reasons as larger companies. They cite the classic advantages – proximity to clients and workforce, centrality, vibrancy, and prestige – as their reasons for being downtown,” the study noted.

The main negative in both studies was parking, which respondents said was a problem, mostly because it was a cost burden “for lower wage employees.”

Plunkett Raysich Architects New Office Rendering. Rendering by Plunkett Raysich Architects, LLP.

Plunkett Raysich Architects New Office Rendering. Rendering by Plunkett Raysich Architects, LLP.

While the emphasis in recent years has been on adding businesses to greater Downtown, in the period from 2006 to 2012, the city was adding a long list of businesses to the redeveloped Menomonee Valley. Many of those companies relocated from the suburbs, including Proven Direct (from Menomonee Falls, 2007), Derse Inc. (Wauwatosa, 2008), Taylor Dynamometer Inc. (New Berlin, 2008), Zimmerman Architectural Studios Inc. (Wauwatosa, 2009), J.F. Ahern Co. (Menomonee Falls, 2012), and a more recent addition, Solaris (West Allis, 2015).

“In the western section of the Menomonee Valley, the old Milwaukee Road area, we’re almost completely done,” Barrett notes. “There’s just one partial lot left.”

Much of that was land owned by the city. Future development will come in the eastern portion of the Menomonee Valley, mostly privately held land, for which the city has high hopes. This could help knit together the Menomonee Valley and Walker’s Point, which is attracting companies to the Water Technology Hub near S. 2nd Street.

Besides the companies moving into the city from the suburbs, there are many that have moved from outlying parts of the city to greater Downtown, or who have always been in the area and have decided to expand. One such company is Dohmen, which has been located in the Third Ward since 1858 and moved to a temporary headquarters in Menomonee Falls while it completely redesigned and renovated a building in the Third Ward, which will be its new headquarters.

It’s a the perfect location, says Dohmen spokesperson Tiffany Huth. “We definitely want to attract young, educated people who are interested in the vitality of Downtown.”

The biggest problem in Downtown remains western Wisconsin Ave., which has been a failure for many years, but here, too, a sudden increase in residential development may provide a solution. Four new projects are planned: The Posner Building at N. Plankinton Ave. and W. Wisconsin Ave., the Germania Building on N. Plankinton Ave. and W. Wells St., the old Blue Cross Blue Shield Building on Michigan (The 401), and another development on N. 7th St. and W. Michigan St. (700 Lofts) will all bring more residential units to this part of Downtown. This will bring more young members of the workforce that may attract more businesses and spur more retail as well. Who knows? Maybe it will even provide some momentum to help revive or replace the forlorn Grand Avenue Mall.

Dohmen’s Redevelopment

22 thoughts on “Murphy’s Law: Why Businesses Are Moving To The City”

  1. Casey says:

    Whatever happened to Harley keeping up with their end of the deal of relocating their insurance office from downtown Chicago to the corner of 6th and Canal where currently there is a parking lot? Having that many white collard jobs in the valley would transform it.

  2. Sam says:

    Why is Barret using the real estate slogan “Fifth Ward” to refer to Walker’s Point again?

  3. Marie says:

    So why does every keep acting like the only thing that can “make Milwaukee vibrant again” is a new arena? It would be great if Bucks stay–if owners pay for their own expansion, as all businesses mentioned in article have done.

    Some new HQs may have gotten TIF credits, but Bucks may get 30 or 40 FREE acres, plus never having to pay any property tax forever (and probably free infrastructure, on the QT). I’m waiting to hear that the county will give the Bucks the entire Park East tract for free to develop as they wish (the state’s already giving them the arena site, and the city two other prime parcels). Now that downtown is finally popping, why not sell this land, not give it away? (It’s not unheard of for savvy real-estate investors, like Bucks owners, to finagle free land and then sell it later for huge profits–check out Anschultz, LA Live…). Who’s watching the public’s wallet–at city, county & state.

    Thanks for spelling out the good-news story, Bruce! Let’s hope the Bucks team reads this and decides MKE really is a great place to invest their own $, instead of shaking down overburdened taxpayers. And Herb Kohl, why not double your donation and ask for your name on a new arena?! A real win-win, with you as a hero.

  4. D says:

    @Marie

    Go find me something that will draw 600,000+ people to downtown Milwaukee to replace the Bucks. Nobody is saying that the arena is the only thing that can make Milwaukee vibrant. What we are saying is that losing the team takes the wind out of the sails of downtowns resurgence and would be a soul crushing blow to anyone that truly loves this city.

  5. Bill says:

    Great post Marie.

    I remember when I first started out professionally it seemed that just about every business was migrating out of downtown to the suburbs. Over the past few years that trend has reversed.

    There’s a ton of building projects going on that have no expectation of a new arena being built. There’s work to be done, but areas like the 3rd and 5th Ward are thriving and downtown is showing some signs of life.

    I know there are some people that think we should hand a huge subsidy to a for profit business. There’s part of me that just wants someone to write these guys the check because I go to 10+ Bucks games a year and have endured a lot of bad basketball in that process. It would hurt for them to move when it looks like they might be pretty good in a few years. I have young sons who like going to the games.

    That said, I’ve yet to see a credible study showing that these developments have been positive. The reason they want a new arena is so they can develop more revenue streams. In other words, it troubles the Bucks that people might stop at Buck Bradley’s, the Upper 90 or Goolsby’s before a game. The Bucks want that revenue. At best the Arena will just shift where the development is currently happening.

    The good news is the new TV contracts that are coming out will give the owners more than enough revenues to build this thing themselves. If this is such a great development opportunity they can own it and reap all the rewards. The thing is I think they know it’s not so they need to be subsidized to cover themselves.

    I also wonder why Tom Barrett is essentially sitting the arena debate out. I think the reason is that he knows that this is ultimately a financial loser for the city if they have to come up with a substantial contribution. It does say something that he’s willing to spend a ton of the cities money on a trolley, but is nowhere to be found on this. It tells me that he (and all the folks at Urban Milwaukee) think the trolley is a financial winner that will spur development (I don’t) and that the Arena will be something that will ultimately have to be paid for with higher taxes.

  6. PMD says:

    I love Milwaukee and I don’t think the loss of the Bucks would be a “soul crushing blow.” Not even close. When the Bradley Center opened, did it lead to a big increase in developmental? Why or why not? How would it be different this time?

  7. AG says:

    The public funding isn’t going to the Bucks, it’s going towards an arena which is a public asset. Don’t believe me? Think about if the Bucks DID leave and we’re still on the hook for the $100 million in infrastructure costs to rehab the Bradley Center. Who’s paying now?

    The Bucks are the catalyst and the creator of the need for a new arena but they are not the only beneficiary. Further, designing an arena that activates the street and spurs ancillary development is more for the benefit of the area than the team. Most of the development will not benefit the Bucks organization. Buying a beer at the outdoor plaza won’t generate more money than if you got it from Major Goolsby’s other than the lease payments from the beer vendor in the plaza. The largest revenue increase comes from the design of the arena itself… aka more lower bowl seats, suites, interior amenities, etc.

    There’s a symbiotic relationship between the Bucks organization and the city. Both benefit from an arena (old or new) and both should be responsible for paying for it (which they are). Cite the costs all you want, but don’t ignore the benefits at the same time, or you’re creating a skewed story.

  8. Scott says:

    Good to see the city luring workers and businesses back. There is a common misunderstanding about the funding for the Bucks arena I’d like to dispel (including, though I didn’t see the exact wording, with the recent Marquette poll showing considerable opposition state-wide to the State funding a portion of that project). The City of Milwaukee funds major redevelopment projects like the Menomonee Valley, Century City 30th Street Industrial Corridor, and the Streetcar project through Tax Incremental Financing (TIF) that is based on the collection of increased property taxes on (and to a lesser extent surrounding) those redeveloped areas. In the case of the BC and any future Bucks arena, the State of Wisconsin has deemed that those properties are/will be exempt of any property tax – as Mr. Murphy and his colleagues at Urban Milwaukee have duly noted in several previous articles. The city can, as @Bill notes, spend “a ton of the cities (sic) money on a trolley” precisely because City leaders deem it an investment that will increase the value of those properties – paid for by TIF revenues (and not city tax dollars). Folks can legitimately argue whether these investments are financially wise but don’t misrepresent how the city is funding them. If the State allowed the new Bucks arena to be subject to property tax, I’d expect that the Mayor would be much more involved in the (TIF) funding process.

  9. AG says:

    Sorry, my figures were not based on any factual info. But here we are now:

    $25-35 million for maintenance

    Up to $300 million to bring the BC up to standards for not just the NBA but to attract other users such as large concerts, etc.

    So we could spend a little now to keep the building functioning, but still have an obsolete building that will slowly attract fewer and fewer users unless we pony up almost enough to build a new arena anyway… but now on the public’s dime for the whole shebang.

  10. PMD says:

    I pretty much agree with you AG, but how optimistic are you feeling right now? Politically it seems to be going nowhere fast. How likely is it that the legislature, the city, and the county all get on board in a short period of time?

  11. Milwaukeean says:

    Great information about the trend of businesses moving back to the City. An even better reason now to have toll roads!

  12. David says:

    @Scott…. I don’t believe the property around the new arena will be tax exempt. I think only the arena will be tax exempt. However, the issue of TIF money going to a tax exempt property might be the problem although I’m not positive. That’s why infrastructure investments were proposed. Also, other than a few bars, what would the city tif? The Park East is empty which is why the mayor wanted the arena around other established commercial properties. I’m sure the mayor could create a tax, for example, a 1% sales tax or something, but the state would not allow the city to do that. So the city’s hands are tied.

    I would love to see a penny tax in the county that would take care of all our cultural amenities. I don’t even want to deal with the WOW counties anymore.

    PMD…. the Bradley Center was never developed with the intention of generating a lot of spin-off economic development. Four dead walls and adjacent to a giant parking structure. Although, most of the establishments on Old Word Third would not be there without the BC.

  13. PMD says:

    Why wasn’t the Bradley Center developed to generate spin-off economic development?

  14. AG says:

    PMD, that just wasn’t a goal for new arenas at the time.

  15. PMD says:

    I was a wee lad when the Bradley Center opened so I’ll take your word for it old man. 🙂

  16. David says:

    I don’t believe the BC was designed in a way that it would become a gathering place or encourage development around it. It kills space all around it because only one wall is activated. It’s nickname is “The Fortress”. I’m very appreciative of the gift, but it is by far the most underwhelming sports / entertainment venue I’ve ever been in other than the Metro Dome. I remember walking in for the first time and thinking….. meh. The new development, hopefully, will be a year-round draw that is used to leverage larger conventions and a place for visitors, tourists and others to gather. There is nothing like this in downtown. I know that our neighborhoods are our strength, but I’m tired of seeing that family of four from DeMoines walking around the Westown looking for something to do.

    This could do a lot for our city besides keeping the Bucks.

  17. Bruce Murphy says:

    AG, just a reality check. The Bradley Center works fine for MU Golden Eagles, Admirals, etc. It only needs replacement for the Bucks. And by the way, MU and Admirals contracts help subsidize the Bucks. If the team was lost, that money they pay could go for maintenance the BC allegedly needs. The Bradley Center could also sell the parcels of land they’ve bought up (whiçh I suspect will simply be given to the Bucks new owners) which could help pay for maintenance, if indeed its needed. I raise that doubt because the BC board, if you read their minutes, has been consumed for many yrs with one issue: getting more bucks for the Bucks.

  18. Will says:

    “MU and Admirals contracts help subsidize the Bucks.”

    Can you explain what you mean by this statement? My understanding is the Bucks own the Bradley Center and MU and the Admirals use the Bradley center and pay the bucks for that privilege.

    “The Bradley Center could also sell the parcels of land they’ve bought up”

    But how much money would that land fetch? I suspect not a lot.

    “The Bradley Center works fine for MU Golden Eagles, Admirals”

    I guess if “working fine” for a minor league hockey team is the bar you set for Milwaukee’s premier sports venue than we just have different expectations of what our city should offer its populous

  19. Bill says:

    Good points Bruce. All these maintenance issues never really seemed to come up until the Bucks needed a new arena. Then suddenly the narrative changes to “Well, we have all these maintenance costs over here, so we might as well pony up for the new arena”.

    @Will: If I’m not mistaken the Bucks also get a rake off all the concession sales that occur at a MU or Admirals game.

    I’ll be the first to say that the BC is not an ideal venue especially in the upper deck where I’m typically seated. (I gotta get some of those Chris Abele courtside ones) That said, once there one can watch a basketball game just fine. Plenty of space too with a lot of fans in attendance dressed up as empty seats. The new owners need one because they want to create as many revenue opportunities as they can and that’ll be great for large corporations and such, but will likely do little for the experience of the common fan.

  20. D says:

    PMD–“I love Milwaukee and I don’t think the loss of the Bucks would be a “soul crushing blow.” Not even close. When the Bradley Center opened, did it lead to a big increase in developmental? Why or why not? How would it be different this time?”

    Losing the Bucks would be a soul crushing blow. You will finally realize this as the moving vans head out of town, all the banners are taken down, and that area of downtown becomes even more of a ghost town for 41 nights a year. This will suck vibrancy and identity out of our city without anything to replace it. Minor league hockey, college basketball, and obsessing over three teams that don’t even play here during the fall and winter. Boy, doesn’t that sound like an exciting city to live in! Meanwhile, Milwaukee gets dragged through the mud while Seattle is congratulated for getting their team back. Then comes the blame game when it dawns on people how Wisconsin let another business and good thing slip through its fat, money grubbing fingers. After that comes the endless ‘NHL to Milwaukee’ rumors that will never come to fruition because nobody will pay for a new arena. We could have had $250+ million dollars for a new building to be utilized by Milwaukee for the next 30 years. Instead, we are left with a decaying Bradley Center that we will need to replace or repair eventually anyway. Paying good money for a facility without a major tenant. This will dawn on you all at some point.

    As for development and the Bradley Center–it wasn’t built with that in mind. It wasn’t built in an area that could spawn off development in adjacent land. Bordered by the Park East Freeway, MATC, the Courthouse, the operating Pabst Brewery, and a bunch of other large scale buildings. Where was it ever going to spin off additional development? The situation is completely different now. The Pabst and Schlitz Breweries are neighborhoods. The Park East is a blank canvass for pretty much anything. East of the river is booming with development. West Town is starting to pick up. A new arena would tie this all together and helps keep the momentum going in downtown Milwaukee.

  21. Bella says:

    Well, money is not the only thing when you want to attract younger people! It is said – location, location, location! Greetings, Man With Van Ruislip Ltd.

  22. David Maass says:

    To live or work in the city, read ‘downtown’, you need to be able to move without hassle.
    This growth and developement has a g r e a t deal to do with Uber and Lyft.
    With Uber and Lift quick and easy movement is again possible. Full stop.

    To put this in contect:
    Why would I live in the third ward if doing so meant that I had to drive my own car everywhere?
    Why loacte my business if taking my prospects to lunch meant waiting for cab not to arrive?

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