Milwaukee Tool Begins Employee Move-In

Milwaukee Tool began welcoming employees to its new downtown office this week.

First announced in spring 2021, the company is redeveloping the five-story, 370,000-square-foot building at 501 W. Michigan St.

About 400 employees now have their office on the third and fourth floor of the building, while construction is still ongoing.

“Additional employees will move in throughout the spring, fall, and winter. We’re on track for meeting our commitments with the city,” said a company spokesperson via email Friday.

The city is providing up to $20 million to the Brookfield-based company if it creates up to 2,000 jobs at the property.

The company’s subsidy agreement calls for it to invest $30 million in the property, and it appears the company is well on its way to reaching that mark. The facade has been substantially altered as every window has been replaced and the 800-stall parking garage rehabilitated. The company purchased the property for $7.9 million in May from developer F Street Group, which had bought the mostly vacant building in late 2019 for $4 million and released a conceptual redevelopment plan.

The fifth floor will be the last to be occupied. A building permit filed this week indicates the roof is being replaced at a cost of $4 million.

“The roof replacement was not originally anticipated, but given its age and condition it was necessary to do now during our renovation process before employees occupy the 5^th floor,” said the spokesperson. “It has had some impact to the timing of us completing the entire building, but it will not prohibit us from occupying the rest of the building (floors 1-4) by this fall. It also doesn’t preclude us from expanding vertically if we want to in the future.”

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 was 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 company, a division of Hong Kong-based Techtronics Industries since 2005, has recorded 22% annual growth since 2009 as its sales have reached $5 billion. It was founded in Milwaukee in 1924, but relocated to Brookfield in 1965 and then relocated most of its manufacturing to Mississippi in 1973.

The company had 227 employees in southeast Wisconsin in 2008, but as of 2021 it had 2,600 and with plans to reach 3,200. Much of the growth, according to Staviski, can be attributed to the launch of a hand tools product line in 2011.

Permitting and bidding records refer to the project as “Red Beacon,” a fitting name for an office building originally built in 1978 for Blue Cross Blue Shield. It was originally designed by Brust & Zimmerman, a predecessor to Zimmerman Architectural Studios.

Stephen Perry Smith Architects is leading the renovation project’s design, which has an emphasis on speed according to Milwaukee Tool. Mortenson Construction is leading the general contracting.

Milwaukee Tool acquired the property through an affiliate known as Schwer, Pflicht & Werzkeug Properties LLC, the same entity used for at least one other Milwaukee area purchase. The German words, from the native language of Techtronics chairman Horst Pudwill, translate to heavy, duty & tool according to Google Translate.

As part of debating the subsidy agreement, the Common Council considered imposing a community benefits agreement to create union-level job protections for contracted service workers, but settled on requiring detailed, annual reporting requirements on employee residence, pay, race and gender.

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.

Because the company is receiving at least $1 million in city support, at least 40% of construction work hours on the project must be completed by unemployed or underemployed city residents (the Residents Preference Program) and at least 25% of the contracts by value must go to city-certified, disadvantaged Small Business Enterprises.

The city will recoup the costs of its grant through a tax incremental financing district and increased property tax revenue from the nearly three-acre property.

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.

Photos

Pre-Construction Photos

Rendering