Kroger to buy Pick ‘n Save parent Roundy’s in $800 million deal
The grocery business in Milwaukee is about to see yet another seismic shake-up with Wednesday’s announcement that Roundy’s Inc., long the dominant grocery chain in southeast Wisconsin with its Pick ‘n Save stores, will be purchased by Kroger Co. The $800 million deal will pay Roundy’s stockholders $3.60 a share, a 65% premium over Tuesday’s closing price. Cincinnati-based Kroger also will take on Roundy’s $646 million in existing debt. Kroger executives say they intend to invest in Roundy’s existing stores in Milwaukee, Wisconsin and Illinois and intend to grow their sales in a grocery market considered by many to be among the most competitive in the U.S. “The thing that we will be able to do over time is obviously we have more financial resources than Roundy’s had, so we’ll be able to invest in the market more aggressively, and over time the customer will see that,” Rodney McMullen, Kroger’s chairman and chief executive officer, said in an interview. Roundy’s headquarters will remain in Milwaukee, and the business will continue to be run by “key members” of the senior management team, the companies said. There are no plans to close stores. Roundy’s also has a commissary in Kenosha and warehouse operations in Oconomowoc. McMullen made it clear that Kroger intends to revitalize the Pick ‘n Save brand, which has come under withering competition from local, national and regional players in the grocery market. “There are a lot of great competitors in the markets we operate in,” McMullen said. “When you look at Walmart and Meijer, we obviously compete against them in a lot of markets. In Wisconsin, you have Woodman’s that does a fantastic job and Sendik’s is a very nice operator as well.” Kroger intends to vigorously compete in the market. “We look at markets that we think are going to grow in total and we always find that we are able to get our share of the growth,” McMullen said. “We see lots of opportunity in Milwaukee. We really like the locations of the Pick ‘n Save stores. We like the market share they have and we see a lot of opportunity to continue to grow the business and when you grow your business you are able to create a number of additional jobs.” As far as keeping the Pick ‘n Save brand name, “We would never make a decision that important on day one,” McMullen said. But, he added, the company has grown over the years with significant acquisitions of grocers and those brand names have been retained, McMullen said. Kroger’s acquisition of Roundy’s is great news for the region, given Roundy’s financial condition, said Bert P. Flickinger, managing director of Strategic Resource Group, a New York retail consultancy. In its most recent quarter, which ended July 4, Roundy’s lost $1.4 million while same-store sales — a key measure of retail performance — fell 3.9% from a year earlier. “This is the best early Christmas present that the vendors who depend on the company and the team […]
Nov 11th, 2015 by Jeramey Jannene
Roundy’s to be acquired by Kroger for $178M
Milwaukee-based Roundy’s Inc. will be acquired by Cincinnati-based The Kroger Co. for about $178 million, the companies announced Wednesday. The deal will also include $646 million in existing Roundy’s debt. The purchase price, which is about $3.60 per outstanding share in Roundy’s, is at a 65 percent premium based on Tuesday’s closing share price. The boards of both companies have approved the agreement, and it is expected to close before the end of the year, pending regulatory approvals and merger terms. Kroger will commence a tender offer for Roundy’s stock. Willis Stein & Partners and affiliates, which own about 7 percent of the outstanding shares of Roundy’s, will tender their shares. The deal is subject to Roundy’s stockholders tendering at least a majority of the outstanding shares. Roundy’s has 151 stores and 101 pharmacies under the Pick ‘n Save, Copps and Metro Market brands in Wisconsin, and under the Mariano’s brand in the Chicago area. It has distribution centers in Oconomowoc and Mazomanie and a commissary in Kenosha. The Milwaukee-based grocer today reported “disappointing” third quarter results, which included a net loss of $8.8 million, or 18 cents per share, compared with a net loss of $283.8 million, or $5.19 per share , in the third quarter of 2014. Third quarter revenue was $971.8 million, down from $973.8 million a year ago. The company’s 2014 revenue was about $4 billion. The company’s losses are nothing new, said grocery industry analyst David Livingston. “Roundy’s was swirling towards bankruptcy,” he said. “They were bleeding cash quarter after quarter. They were never going to turn the company around. ” Several southeastern Wisconsin Pick ‘n Save stores have been closed in recent months as market competition increases in the region. Grand Rapids, Mich.-based big-box grocery and general merchandise chain Meijer has opened several stores in the Milwaukee market this summer and Issaquah, Wash.-based bulk chain Costco is adding more stores. With the acquisition, the companies will operate 2,774 supermarkets and employ 422,000 people in 35 states and the District of Columbia. Roundy’s will continue to be headquartered in Milwaukee. It will operate its stores as a subsidiary of The Kroger Co., and its key leaders will remain in place. There are no plans to close any Roundy’s stores. Its employees “will have employment opportunities with both companies.” “We’re now part of a 400,000+ employee company, so obviously a lot of opportunities will come up that weren’t available here,” said James Hyland, a spokesman for Roundy’s. “But there’s no change in any employment status.” But Livingston predicts that Kroger will close 25 to 30 Pick ‘n Save stores in the short term and another 25 Pick ‘n Save stores “down the road.” Roundy’s has a lot of “low volume, money losing, redundant” Pick ‘n Save stores in the Milwaukee area, Livingston said. Kroger is one of the largest grocers in the nation and will operate with economies of scale that will allow the Pick ‘n Save stores that remain open to be more price competitive, Livingston […]
Nov 11th, 2015 by Jeramey Jannene
Boy at center of famous ‘Poor Joshua!’ Supreme Court dissent dies
Whatever childhood Joshua DeShaney might possibly have had ended at the age of 4, in the early spring of 1984, when his father delivered the semiconscious boy to Mercy Medical Center in Oshkosh. The boy’s father, Randy DeShaney, received custody of his son in a 1980 divorce settlement in Wyoming and moved to Winnebago County. It is not clear how long the father abused his son. Officially, according to the meticulously kept but ultimately useless records compiled by the Winnebago County Department of Social Services, probably two years. In early 1983, following a report of child abuse and hospitalization, the department recommended the boy be kept in the hospital. In a matter of days, the child was returned to his father. Again and again and again, a department social worker reported suspicion of child abuse. There were bruises, hospitalizations and days when Joshua was too “sick” to be seen. Again and again and again, the department made agreements with the father that the father then ignored. In March 1984, the boy was brought to Mercy with new and old bruises over much of his body. Doctors opened Joshua’s skull and found evidence of serious head injuries suffered over a period of time, leaving the boy with serious and permanent brain damage. His father said he had fallen down stairs. Randy DeShaney was charged and convicted of child abuse, but served less than two years in jail. And Joshua, who was 36 when he died on Monday, would go on to live two lives. One would be private, spent in the care of his adoptive parents, Richard and Ginger Braam, who made room for Joshua in their Muskego home when he was 12. The other would be public, preserved in a precedent-setting Supreme Court decision that to this day is cited in legal briefs, analyzed in law review articles and argued about in constitutional law classes. Joshua’s biological mother sued Winnebago County, arguing that child welfare workers violated Joshua’s constitutional rights by failing to rescue him from his abusive father. Melody DeShaney sought compensatory and punitive damages under the equal protection clause of the 14th Amendment to the Constitution. To the consternation of many children’s rights activists, a decision issued by the court in 1989 and authored for the majority by Chief Justice William Rehnquist, said they had not. The due process clause, Rehnquist wrote, “is phrased as a limitation on the state’s power to act, not as a guarantee of certain minimal levels of safety.” Due process, in other words, protects us from government intrusion. It does not compel the government to act. Justice Harry Blackmun’s dissent is one of the most famous of his career: “Poor Joshua! Victim of repeated attacks by an irresponsible, bullying, cowardly, and intemperate father, and abandoned by (child protective services), who placed him in a dangerous predicament and who knew or learned what was going on, and yet did nothing…. “It is a sad commentary upon American life, and constitutional principles — so full […]
Nov 11th, 2015 by Dave Reid
Third Space Brewing project receives $475,000 in loans from MEDC
A new brewery planned for Milwaukee’s Menomonee Valley received almost $500,000 in loans Tuesday. Third Space Brewing LLC was approved for a $150,000 loan from the Milwaukee Economic Development Corp. for equipment and working capital to start the project. In addition, developer Steve Looft with Cream City LLC received $325,000 loan to help with the renovation of the property, which has been vacant for about 20 years. The total project is expected to cost $2.8 million to renovate the old Geuder, Paeschke & Frey tinware manufacturing facilities at 1505 W. St. Paul Ave. BMO Harris is the primary lender for the renovation, and First Bank Financial Centre is the primary lender for the brewery. Kevin Wright, owner and brewmaster, said many other stakeholders in the Menomonee Valley have reached out to him in support of his plans. “We feel it’s a good project because it’s revitalizing a building that’s been abandoned for a long time, and it’s bringing in a business that will create jobs and bring attention to the neighborhood,” Wright said. Third Space Brewing is the second craft brewery trying to open in the Menomonee Valley, along with City Lights Brewing Co.
Nov 10th, 2015 by Dave Reid
Kopp will tear down historic building following city condemnation order
A historic building in Walker’s Point that restaurateur Karl Kopp had envisioned as the location for a new dining spot will be torn down, and Kopp will consider other uses for the piece of prime real estate. The city on Monday issued a condemnation order on the building, 100 E. Seeboth St., next to the Water St. bridge over the Milwaukee River. The order came after city inspectors verified the conclusions of Kopp’s engineer that the 144-year-old building is unstable, with its interior walls at the point of collapse, Ron Roberts, manager of the condemnation and commercial division of the Department of Neighborhood Services, said Tuesday. Repairing the building would cost “millions of dollars,” Roberts said. In a brief interview Tuesday, Kopp said he had spent nearly $750,000 on efforts to restore the structure and use it to house a large restaurant. “And then we got the news that the building would not withstand that type of renovation,” he said. “…I’m a little depressed. ‘Little’ is being kind.” Kopp has owned the building since the 1980s. It has been used for storage and previously has been described as being in poor condition. In 2003, a developer announced plans to raze it and build a $20 million condominium project. Those plans were scrapped, however, when the City of Milwaukee designated the property, formally known as the J.L. Burnham Building, a historic structure. Then, two years ago, Kopp submitted plans to the city’s Historic Preservation Commission to restore the building and turn it into a restaurant with a 4,200-square-foot dining area, with offices and a conference room on the second floor. Kopp said Thursday that after the building is razed he will evaluate alternate plans for the property, which faces a bend in the river just south of the Historic Third Ward. A revival of a residential and office structure, such as the one thwarted by the historic designation, is a possibility, he indicated. “Once the building is torn down, we can stand back and look at it and dream and walk around and kick the dirt and then make a decision,” he said. The building has been without a roof for months. It was removed as part of Kopp’s initial work on the project, and it may have accelerated the damage to the structure, Roberts said. But he said the fundamental problems long predate the removal of the roof.
Nov 10th, 2015 by Jeramey Jannene
Historic J.L. Burnham Building to be demolished
Karl Kopp, owner of the downtown restaurant Elsa’s on the Park, has been issued an order to raze the 140-year-old J.L. Burnham Building in Milwaukee’s Walker’s Point neighborhood within 30 days. Kopp planned to redevelop the building, at 100-106 E. Seeboth St., and was issued a certificate of appropriateness in June to renovate the building by the Milwaukee Historic Preservation Commission. Through the process of preparing to renovate, it was discovered the deterioration of the interior walls was beyond what was previously anticipated, said Ron Roberts, manager of the city’s condemnation department. Kopp was served an emergency raze order Monday and has 30 days to comply, Roberts said. Roberts said there have been concerns about the stability of the building all along, and efforts were being made to stabilize the structure; however, floors have collapsed and interior walls were damaged. The building is assessed at $420,600. “One good thing out of this is an organization at MSOE is working on a project to renovate King Drive and they will be reclaiming some of the historic bricks,” Roberts said. Kopp could not be reached for comment. In 2013, Kopp planned to open a restaurant in the 11,430-square-foot, two-story building. At the time, his plans included a 4,200-square-foot dining area and a 525-square-foot courtyard on the first floor, offices and a 725-square-foot conference room on the second floor and offices and storage space in the basement. During the condo boom prior to the Great Recession, Kopp planned to tear down the old brick building and replace it with a new condo building. However, plans to tear down the building were opposed by the Historic Preservation Commission and that project never moved forward. The raze order supersedes any jurisdiction the Historic Preservation Commission has on the property.
Nov 10th, 2015 by Jeramey Jannene
Proposed Bay View ‘micro-hotel’ seeks $380,000 MEDC loan
Developers seeking to convert a former Bay View tavern into a seven-room “micro-hotel” and restaurant are seeking a $380,000 loan from a nonprofit business lender to help finance the project. Charles Bailey and Joseph Partipilo, owners of Joca Properties LLC, plan to remodel the former home of the Down and Over Pub, 2535 S. Kinnickinnic Ave., into a business similar to a bed and breakfast. Bailey, a Shorewood resident who is a principal in CertaPro Painters of Chicago, told the Journal Sentinel inSeptember that the 11,500-square-foot building would have seven rooms within former banquet hall space on the second floor and a restaurant on the first floor. Bailey hopes to open the business by spring 2016, and has been talking to prospective tenants for the restaurant space. Joca is seeking a loan from Milwaukee Economic Development Corp. Chicago-based Burling Bank would be the primary lender on the $950,000 project, according to MEDC. Joca projects the micro-hotel would have two full-time employees and one part-timer within two years. MEDC’s Loan and Finance Committee is to consider the loan at its Tuesday meeting.
Nov 9th, 2015 by Jeramey Jannene
CEO David Westgate, director Vince Martin out at Jason Industries
Jason Industries Inc. in Milwaukee announced Monday the resignation of its CEO and two of its directors, including Jason Inc. co-founder Vince Martin, as it looks for new leadership to improve the company’s performance. Jason Industries (NYSE: JASN), the parent company to several global manufacturing companies that produce seating, finishing, automotive acoustics and components, said that CEO David Westgate has resigned, and current chairman of the board of directors Jeffry Quinn will take on the role of interim CEO. Westgate had led the company since becoming CEO of Jason Inc. in 2004. Along with Westgate, two members of the board of directors have resigned, reducing the number of current board members to eight. Martin, co-founder of Jason Inc. in 1985, and Robert Jenkins, CEO of Sundstrand Corp., have left the board. Martin was chairman and CEO of Jason Inc. when he retired as CEO in 2004. The leadership changes reflect the company’s poor operating and financial performance since it was acquired by Quinpario Partners and held its initial public offering in June 2014. The company’s stock has lost 60 percent of its value since then. “We recognize the operating and financial performance of the company in its recent short history as a public company has not met our expectations,” Quinn said about the resignations. “I believe in Jason’s potential and am focused on creating value for my fellow shareholders, serving our global customer base, and creating opportunities and economic security for our employees.” Quinn, who led the 2014 acquisition of Jason Inc. through his company Quinpario Partners, will relocate to Milwaukee and continue as chairman of the board as the company begins a search for a permanent CEO. In August Jason announced it added two new members to its board: Mitchell Quain and James Hyman. Jason has more than 4,400 employees in 14 countries.
Nov 9th, 2015 by Dave Reid
Wiegand sells four apartment buildings near Marquette University campus
Milwaukee developer and near west side booster Richard Wiegand sold a package of four apartment buildings and a parking lot near the Marquette University campus for $6.85 million, according to Ogden & Co. Inc. The properties are centered around West Wisconsin Avenue and 21st Street, and have a combined 126 apartments that are mostly rented to Marquette University students, said Michael Seramur, Ogden vice president. Wiegand, best known for restoring the Ambassador Hotel on West Wisconsin Avenue, also owns a large portfolio of apartment buildings in the near west side neighborhood. More recently, he took on the redevelopment of Milwaukee County’s large City Campus property at 27th and Wells streets. “He now is divesting himself of some of his Marquette student rentals,” Seramur said. “He’s working hard on the 27th Street City Center project and it was time. He’s had some of these properties since the ’90s.” Wiegand recently hired Milwaukee-based Ogden & Co. to market 10 apartment buildings for sale. Four of them and the parking lot sold to Charles Tunkieicz Farms Inc., a family trust from Kenosha County. The remaining six buildings are still for sale. “I affectionately refer to them as the Marquette four-pack and the Marquette six-pack,” Seramur said. Seramur and David Tighe of Ogden represented Wiegand Investments in the sale. Tunkieicz Farms this summer sold a large farm property in Somers to First Industrial Realty Trust for a business park development. It took the proceeds through that sale and reinvested them into the Milwaukee apartments through a federal exchange program that offers tax benefits. Brett Garceau and Timothy Janusz, brokers with Milwaukee-based MLG Commercial who represented the Tunkieicz trust in the deal, declined comment. The property sales in this package cover the addresses at 601 N. 20th St., 611 N. 20th St., 727 N. 21st St., 734-754 N. 22nd St. and 2101 W. Wells St. The so-called “six-pack” of Wiegand apartments that are still for sale are north of Wells Street, between 21st and 23rd streets. That portfolio has 109 apartments.
Nov 9th, 2015 by Dave Reid
Milwaukee Blacksmith Kent Knapp
OnMilwaukee / Too Much Metal: how long have you been doing what you do? Kent Knapp: I started blacksmithing in 1991 and apprenticed for seven years under two different masters. After an eight-year hiatus in New Orleans playing music, I returned to Milwaukee and shortly thereafter opened my own shop. I am currently the lead blacksmith at Milwaukee Blacksmith, Inc. We are a family business with myself and three sons, Miles, Birdie and Ozzie, in the shop. My eldest daughter, Zoey, does design work. And my missus of 25 years, Shannon, does the books and promo in between wrangling the two youngest, Dharma and Tashi. We offer custom ironwork, as well as stock items and also provide classes in beginning blacksmithing at the School of Iron. OnMilwaukee / Too Much Metal: What is your favorite Milwaukee season? Knapp: Summertime is, hands down, my favorite time in Milwaukee. The festivals, beer gardens, outdoor concert venues, block parties, etc., offer so much to do in this great place on a Great Lake. Winter time, on the other hand, often sees me high-tailing it to the Virgin Islands, when finances allow. Ironically, there are many Brew Town expats down around those parts. OnMilwaukee / Too Much Metal: Favorite or least favorite Milwaukee smell? Knapp: Ahhhhhh, smells; so many to be had in this fair city. Let’s start with the good, shall we? Coming over the north side of the Hoan during the many festivals held at Henry Maier Park yields a lovely aroma of grilled brats, Italians and Polish. Coffee being roasted all about the city is an instant wake up. The aromas of hops and barley pouring out of our many fine breweries make anybody want to tip one back. And for me, personally, nothing beats the smell of coal smoke in the morning. Smells like work! And then there’s the bad. Only two, that I can think of: dead alewives on the north end of Bradford Beach and the “poo poo plant” when coming over the south side of the Hoan. Phew! That’s ripe! Hoof hearted?! OnMilwaukee / Too Much Metal: What is your hope for Milwaukee? Knapp: My hope for Milwaukee is that she can once again become the pillar of production she once was. “Milwaukee feeds and supplies the world” is no myth. Our port used to see over 300 ships a year; now, barely 30. I have high hopes for the many small business entrepreneurs coming out of the woodwork, not to mention the water technology folks who have their sights set on us. Now THERE’S something. OnMilwaukee / Too Much Metal: When and how did you fall in love with Milwaukee? Knapp: Being born and raised in Milwaukee helped when it comes to loving her, being a sixth generation Milwaukeean helps, but it wasn’t until I left and came back that I really realized my love for this old gal. After playing music in New Orleans, I returned to Milwaukee with a newfound love for her. Studying […]
Nov 8th, 2015 by Dave Reid
Chris Clausen from Swingin’ Door Exchange
For more than two years, Chris Clausen has spent most of his evenings behind the bar at the Swingin’ Door Exchange, 219 E. Michigan Ave. Recently OnMilwaukee stopped in for Tuesday night tacos, three cans of Pabst (three cans for $5!) and to chat with Clausen about Racine bars and restaurants, “Ghostbusters” and his very first swig of beer. OnMilwaukee: You drive to Downtown Milwaukee from Racine for work three or four times a week. Why don’t you move here? Chris Clausen: For me, it’s because of my friends. We are a very tight group. I live with my best friend, who I’ve known for almost 26 years. My friends are my chosen family. OnMilwaukee: Where are your favorite places to eat in Racine? Clausen: I really like a Korean restaurant called Asiana; Old Madrid is good, too, for Spanish tapas. There’s a lot of great pizza places in Racine, too: Wells Brothers, Derango’s, Mike & Angelo’s. But my all-time favorite Racine restaurant was Totero’s. It was an Italian restaurant, open for like 75 years and only for lunch. They’d serve until they ran out of food. They had a very limited menu, and we always went on Wednesdays for the lasagna. It was silly delicious. Totero’s was one of those places you just don’t come across very often. Unfortunately, a lot of people who live in Racine prefer to go to Red Lobster and Applebee’s. OnMilwaukee: Kewpie’s – yes or no? Clausen: Kewpie’s, yes! I grew up going there. OnMilwaukee: What are your favorite Racine bars? Clausen: The bar I’ve gone to the longest and the most is Ivanhoe Pub & Eatery. I actually worked there for seven years. I also like to go to Evelyn’s, McAuliffe’s and Pepi’s. My roommate bartends there – it’s a deli and bar with old school pinball machines. OnMilwaukee: Do you get a lot of out-of-town people at the Swingin’ Door? Clauseun: Yeah, we get people from all over the world because of the hotels. We get a lot of people from around here, too. We have incredible food – it’s truly some of the best pub food I have ever eaten. OnMilwaukee: What’s the best item on the menu? Claseun: Oh, wow. I love the blackened chicken bacon avocado sandwich. The reuben is really, really good, too. OnMilwaukee: What do you like to do when you’re not working? Clausen: I like to hang out with my friends, go golfing, watch movies. OnMilwaukee: What’s your favorite movie? Clausen: Probably “Ghostbusters.” I used to watch it over and over on VHS when I was a kid and could act out every scene. I would literally watch it, rewind it and watch it again. Drove my parents nuts. It taught me a lot about sarcasm … and Bill Murray. It was my religion. OnMilwaukee: What is your favorite drink to make? Clausen: I’m a huge fan of old school cocktails. I like making martinis and side cars – they’re very delicious. OnMilwaukee: What are some […]
Nov 6th, 2015 by Dave Reid
Marcus buys Park East land where it previously considered movie theater
Marcus Corp. bought a riverside property in Milwaukee’s Park East corridor where, years ago, the company had considered building a movie theater. The company does not have immediate plans for the land, but picked it up as an investment, according to a statement from Katie Falvey, Marcus Corp. vice president of real estate. The parking lot is on the east bank of the Milwaukee River, between Knapp and Cherry streets. “We believe the Edison Street property has significant development potential due to its terrific location in a booming area of downtown as well as its Milwaukee River frontage,” Falvey said. “That being said, we do not currently have any specific development plans for the site, nor have we made any decisions on the potential location for a downtown Marcus movie theater. We are keeping our options open. In the meanwhile we will continue to offer daily public parking on the site.” An affiliate of Marcus bought the parking lot for $3.1 million on Tuesday, according to state records. Parking Management of Wisconsin Inc., based in Milwaukee, sold the land. Marcus Corp. was on board with a different developer’s earlier proposal for that land that called for a movie theater and office building. That project was in play from 2006 until last year, when Brookfield-based Hammes Co. came in with plans for an office development there that would include the developer’s new headquarters. Marcus Corp. recently sold a property through Kansas City, and was able to buy the Milwaukee parking lot with a tax benefit by doing it now. Hammes has an option to buy a neighboring, county-owned property between Edison Street and Water Street. Hammes officials also planned to have the city vacate Edison Street, which divides the parking lot from the county land, to assemble the full, triangle-shaped property. It also owns the neighboring block to the east, on the opposite side of Water Street. Hammes in January estimated the office development in the Park East could be worth $80 million. The property has environmental challenges. Hammes officials in September estimated it would cost at least $6.5 million to clean the property for development and remove underground freeway piles. Hammes has had talks with city development officials over getting public support for the site preparation work.
Nov 6th, 2015 by Dave Reid
