Graham Kilmer

City Will Terminate Manpower Agreement

Grunau and Schiltz Park will sell Manpower building and repay city loans they owe.

By - May 2nd, 2017 05:19 pm
Manpower Headquarters. Photo by Jeramey Jannene.

Manpower Headquarters. Photo by Jeramey Jannene.

New projects appear to be in the cards for Schlitz Park, now that the business park’s ownership is terminating a redevelopment agreement with the city and is planning to sell the building that houses ManpowerGroup.

A resolution terminating the deal was approved by the Common Council’s Zoning, Neighborhoods & Development Committee today. Next it goes to the full council.

The lease with Manpower, which has about 900 employees in Milwaukee, was recently extended to 2031, so terminating the development agreement with the city won’t affect the international corporation’s place in Milwaukee, said Gary Grunau, president of Grunau Company Incorporated.

Meanwhile, the ownership of Schlitz Park, which includes Grunau, intends to sell the 280,000-square-foot Manpower building and refinance some of their public loans. Manpower did have the opportunity to buy the property, which the BizTimes reported is valued at $59.3 million, but declined, Grunau said.

“As you own something for, what’s this, 33 years now you build up loans here and there,” Grunau said, referring to Schlitz Park. “That’s part of development, and you end up owing a lot of people a lot of money.”

Some of these loans include an outstanding $2.4 million on a $3 million loan from the city for the Manpower project, and $2.6 million left from RACM loans for Grunau’s Stock-House and RiverCenter projects. Sale of the Manpower building will enable him to pay back the city.

“Our net refinancing sale will clear up about $5 million that we owe to RACM and the city,” said Grunau. “Then we can start looking at what else we can build over there and create some more jobs.”

In 2015, Schlitz Park developers announced a multi-year list of future development projects which included three new office space developments bringing in about 290,000 square feet of office space, along with plans for a 140-unit hotel and 140-unit apartment building.

2015 Proposals

New PILOT Deal for Manpower Building

The Manpower agreement dates back to 2006. And all the terms of the agreement have been satisfied, said Alyssa Remington with the Department of City development.

In 2000 the city created Tax Incremental Financing District 41, which includes the Manpower site. The TIF district has generated $33 million in new or incremental property taxes collected since it was created.

So now that the Manpower building is for sale, and all the conditions of the previous development agreement have been satisfied, a new deal is being created which is tied to the termination.

Under that agreement, a Payment in Lieu of Taxes program (PILOT) is tied to the title of the building. Remington said the deal is being done “just to ensure that if a non-taxing entity [such as a non-profit] were to move into this building we would have the ability to collect on that and contribute towards paying down the debt of TID 41.”

Manpower Project Was a Catalyst for Schlitz Park

Manpower was among the first major corporations to move a headquarters Downtown when it moved into Schlitz park in 2006.

“We competed with a whole bunch of sites in the suburbs,” Grunau said.

Since then the park has exploded with new development and renovations including new office space, apartments and retail tenants.

And now with this latest termination of the Manpower contract, there could be more development coming.

Categories: Real Estate

4 thoughts on “City Will Terminate Manpower Agreement”

  1. Rita Reinke says:

    Intertesting; Manpower got the whole Schlitz park going and now you pull the rug from under them…so this is progress?
    That’s what this article seems to say…correct me if I’m wrong.

  2. montaviusj92 says:

    Rita, this deal does not impact Manpower. Manpower will still lease the building, just pay rent to a different owner.

  3. Rita Reinke says:

    Thank you for correcting me…

  4. Gary says:

    Manpower wax a catalyst for Schlitz Park?
    ‘Schlitz Park’ was functioning at least 4 years (more) before the Manpower bldg. was built in 2006, even tho’ there were vacancies. I worked there and remember tenants like M&I Bank PR Dept. acoss the hall from Metavante, and someone like Aurora took up the rest of old bottling building. Other tenants were in buldings to the west, although another was eventually torn down.

    It’s hard to figure out what’s really being spun in this article, unless it’s just a piece for the resumé, but at least the word ‘renaissance’ wasn’t used.

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