Downtown Office Building Sold to Milwaukee Tool
Company hopes to have 650 workers in downtown Milwaukee by end of 2021.
Milwaukee Tool is quickly moving forward on its proposal to bring up to 2,000 jobs to downtown Milwaukee. The company closed on its purchase of the five-story office building at 501 W. Michigan St. last week.
The transaction was recorded with the Milwaukee County Register of Deeds on Monday. An affiliate of the company paid $7.9 million for the property.
Company chief financial officer Ty Staviski told a city committee in April that the company currently lacks space for 800 employees in southeastern Wisconsin and is getting by with remote work.
“All of the options that we are looking at for different sites are predicated on that we need a quick turnaround,” said Staviski. “This is a building, that after touring, we could renovate in a fairly quick and phased approach.”
The Milwaukee Common Council approved a subsidy agreement on May 4th that provides an up-front grant of $12.1 million in exchange for the company investing $30 million and housing 1,210 full-time employees in the building by 2026. A series of clawback provisions and other incentives could bring the subsidy to $20 million if the company brings up to 2,000 employees (an additional 790) to the facility within 20 years.
As part of that future expansion, up to four floors could be added to the building.
The company had 227 employees in southeast Wisconsin in 2008, but today it has 2,600 and has plans to reach 3,200 by the end of the year. Much of the growth, according to Staviski, can be attributed to the launch of a hand tools product line in 2011.
The company envisions having 650 employees in the Milwaukee facility by the end of 2021. The financing agreement requires them to have at least 450 by March 2022 before a clawback provision could be invoked.
Assurant Health was the last tenant in the building, vacating the space in 2016. Developer Scott Lurie purchased the property in late 2019 for $4 million and sold it to an affiliate of Milwaukee Tool for a currently undisclosed sum. The structure was built in 1978 and includes an 800-stall parking structure. Lurie, through his firm F Street Group, had marketed a redevelopment plan known as HQ501 that included a four-story addition with potential hotel.
Milwaukee Tool’s choice of a facility in Westown, the neighborhood covering the west side of Downtown, was viewed as a win by city officials and a sign that other investments in the area including the Bradley Symphony Center, The Avenue and Fiserv Forum are making the area more desirable.
Company officials said the average employee at the facility will be paid $75,000 and the contracted service workers would each make at least $15 per hour. But members of the union that organized Fiserv Forum workers, the Milwaukee Area Service and Hospitality Workers Organization, called for more worker protections.
The city will recoup the costs of its grant through a tax incremental financing district and increased property tax revenue.
According to a Wisconsin Economic Development Corporation release, since 2016 the company has pledged to create up to 1,812 new jobs and invest $174.5 million in capital projects in exchange for up to $46 million in tax incentives. That includes new or expanded plants in Sun Prairie and West Bend, but does not include the Milwaukee project.
UPDATE: The article was updated with the purchase price once the transaction was posted in the state real estate transaction database.
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More about the Milwaukee Tool expansion
- Friday Photos: Milwaukee Tool Readying Downtown Office - Jeramey Jannene - Oct 22nd, 2021
- Eyes on Milwaukee: Downtown Office Building Sold to Milwaukee Tool - Jeramey Jannene - May 24th, 2021
- Eyes on Milwaukee: Council Okays $20 Million Milwaukee Tool Deal - Jeramey Jannene - May 4th, 2021
- Eyes on Milwaukee: Council Committee Amends Milwaukee Tool Deal - Jeramey Jannene - Apr 27th, 2021
- Eyes on Milwaukee: Barrett Pushes Council To Accept Milwaukee Tool Deal - Jeramey Jannene - Apr 24th, 2021
- Eyes on Milwaukee: Milwaukee Tool Deal Gets First Approval - Jeramey Jannene - Apr 15th, 2021
- Eyes on Milwaukee: How The Milwaukee Tool Deal Works - Jeramey Jannene - Apr 6th, 2021
- Eyes on Milwaukee: Milwaukee Tool Could Bring 2,000 Jobs Downtown - Jeramey Jannene - Mar 31st, 2021
- Plats and Parcels: Meet HQ501 - Jeramey Jannene - Dec 21st, 2019
- What’s It Worth?: Old Blue Cross Building Once Cost $28 Million - Michael Horne - Dec 12th, 2019
Read more about Milwaukee Tool expansion here
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