BizTimes Milwaukee | January 22, 2018 by BizTimes Media

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ECONOMIC TRENDS 2018 A PREVIEW OF THE YEAR AHEAD IN MANUFACTURING, REAL ESTATE, HEALTH CARE, BANKING, M&A, STAFFING, TECHNOLOGY AND MORE.

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BizTimes Milwaukee (ISSN 1095-936X & USPS # 017813) Volume 23, Number 21, January 22, 2018 – February 4, 2018. BizTimes Milwaukee is published bi-weekly, except monthly in January, July and December by BizTimes Media LLC at 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120, USA. Basic annual subscription rate is $42. Single copy price is $3.25. Back issues are $5 each. Periodicals postage paid at Milwaukee, WI and additional mailing offices. POSTMASTER: Send all UAA to CFS. NON-POSTAL AND MILITARY FACILITIES: Send address corrections to BizTimes Milwaukee, 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120. Entire contents copyright 2018 by BizTimes Media LLC. All rights reserved.

Contents

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COVER STORY

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4 Leading Edge 4 NOW BY THE NUMBERS 5 BEHIND THE SCENES 6 BIZTRACKER 7 REV UP 8 STYLE 9 IN THE NEIGHBORHOOD BIZ POLL 10 INNOVATIONS 11 GETTING THERE ON MY NIGHTSTAND

12 News 12 W ISCONSIN CONSERVATORY OF MUSIC FINDS NEW, SUSTAINABLE PATH FORWARD 14 MADE IN MILWAUKEE

16 Real Estate 39 Workforce Development 42 Strategies 42 COACHING Joe Sweeney 43 LEADERSHIP Joe Weitzer 44 TIP Sheet

46 Biz Connections

Special Report 18 Economic Trends 2018

This comprehensive report includes a macroeconomic outlook, a review of local stock performance, and outlook reports on local business, manufacturing, commercial and residential real estate, health care, banking, M&A staffing, technology, cryptocurrency and Foxconn.

46 NONPROFIT 47 PERSONNEL FILE 48 SBA LOANS 49 AROUND TOWN 50 GLANCE AT YESTERYEAR COMMENTARY 51 FIVE MINUTES WITH…

C R E AT E D TO B E

WISCONSIN’S BANK FOR B U S I N E SS™

414-273-3507 | www.townbank.us

biztimes.com / 3

Leading Edge

BIZTIMES MEDIA – Like us

NOW

Workplace harassment a common problem, TEMPO survey shows By Molly Dill, staff writer About 68 percent of professional businesswomen in Milwaukee who participated in a new survey by women’s networking group TEMPO Milwaukee say they have experienced sexual harassment in the workplace. The December survey polled TEMPO’s 350 members, who are in CEO, executive and leadership

positions in the Milwaukee area. The final results include the experiences of the 97 members who responded. The survey defined sexual harassment using the guidelines set out by the U.S. Equal Employment Opportunity Commission: unwelcome sexual advances, requests for sexual favors, and other verbal

BY THE NUMBERS

of Wisconsin construction firms expect to expand their payrolls in 2018, according to the latest survey from the Associated General Contractors of America. 4 / BizTimes Milwaukee JANUARY 22, 2018

or physical harassment of a sexual nature. TEMPO distributed the survey as the topic of sexual harassment of women in the workplace has been a point of national conversation via the #MeToo movement. Several men in the film and entertainment industries, as well as the media, have been accused of inappropriate sexual advances on women who work for them. “These survey results – and the vivid and shocking examples of harassment our members provided – should serve as a wake-up call to Milwaukee’s business community,” said Jennifer Dirks, president and CEO of TEMPO Milwaukee. “Milwaukee is not immune to its own problems with sexual harassment. This isn’t just happening in Hollywood.” Respondents to the TEMPO survey described situations including being dragged into hotel rooms at conferences, locked in stockrooms and trapped in offices; being touched indecently or forcibly kissed; and enduring regular sexual innuendo. “A boss who followed me to my room while at a conference and kept knocking and wanting to come in. It is never appropriate to make a romantic advance on a direct employee,” a respondent wrote. “Many incidents of comments on my body, my sexual habits, my

menstrual cycle, my body changes during pregnancy, etc. I remember one boss in particular who used to regularly refer to me as a ‘real screamer’ in the bedroom,” another said. The women described switching job duties, quitting jobs, skipping work trips and experiencing negative financial ramifications as a result of these incidents. Half of the survey respondents reported incidents had happened when they were in entry-level roles. At the middle-management level, 36 percent experienced harassment. And 35 percent reported they were harassed while in upper management positions. About 33 percent of respondents said they would not, or were not sure if they would, report blatant sexual harassment if it happened tomorrow, out of fear it could damage their career or there may be repercussions. Dirks said there is nuance when it comes to sexual harassment, so companies should address it openly and set out clear workplace guidelines. About 37 percent of respondents said their company had not trained employees on or addressed sexual harassment in the past 12 months. But 64 percent said their employers do have a formal reporting process for sexual harassment. n

LILA ARYAN PHOTOGRAPHY

BEHIND THE SCENES Amazon Prime Now hub By Molly Dill, staff writer

our days before Christmas, orders were still trickling in steadily at the Amazon Prime Now hub on Milwaukee’s southwest side. Opened in March, the warehouse is one of 30 U.S. Prime Now hubs in densely populated areas that focus exclusively on one-hour and two-hour deliveries to Amazon Prime members within a 15mile radius. The 25,000-square-foot warehouse houses tens of thousands of items, from groceries to electronics to wrapping paper. A sophisticated software system built on scanners and barcodes builds the most efficient route for its 20 cart-wielding employees to pick items off the shelf. It’s like a mini version of Amazon’s 1 millionsquare-foot, 2,500-employee Kenosha fulfillment center, aimed at quickly gathering and distributing commonly ordered items. n

A bar code scanner system tells pickers where items are located by aisle, bin and loose product description. Employees pick or stow items interchangeably.

The hub is organized into lettered and numbered aisles, and items are divided into categories such as ambient (small), high-velocity (frequently ordered) and hazmat (contains chemicals).

Items are stored in a “random stow” assortment to assure accuracy and efficiency. Legos might be next to a hair dryer and a can of beans.

Area manager Bo Blazavier picks items for several orders at the Milwaukee Amazon Prime Now hub. The most commonly ordered products are toilet paper, water and bananas.

Rush orders must be picked within minutes so one of about 200 area delivery drivers can get them to a customer in less than an hour. Two-hour delivery is free with a minimum order of $35, and one-hour delivery comes with a $7.99 fee. biztimes.com / 5

Leading Edge

Small business loans. Easy online application.

The latest area economic data.

Airbnb announced that its Wisconsin hosts earned a combined

25.2 million

and welcomed 210,000 guests in 2017.

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Wisconsin’s unemployment rate dropped to

SH U

T TE

3.2%

in November.

©2017 Park Bank. Fundation is a registered trademark of Fundation Group LLC, used with permission. All loans are subject to credit approval. Park Bank customers Marla & David Poytinger, Splash Studio & Nine Below (photo courtesy Andy Stenz Photography).

for their support of the MMAC’s Council of Small Business Executives (COSBE)

2017 Platinum Sponsors

ERICH SCHROEDER

THANK YOU TO OUR SPONSORS

7.4%

Passenger traffic at General Mitchell International Airport in November rose

year-over-year, to 577,367.

The Milwaukee-area PMI for December was

2017 Media Partner

65.57

the highest level for the local manufacturing index since late 2014.

5.3%

Metro Milwaukee home sales increased IT DOESN’T HAVE TO BE LONELY AT THE TOP! MMAC’s CEO, CFO, Senior Executive and Sales Management Roundtable programs are designed to give top-level executives a way to share best practices and address the unique issues they face. Learn more at www.mmac.org/roundtable.html or contact Whitney Maus @ 414.287.4146 or wmaus@mmac.org 6 / BizTimes Milwaukee JANUARY 22, 2018

in November, year-over-year.

REV UP

TKK ELECTRONICS LLC

LEADERSHIP: Juan Hernandez, founder and chief executive officer H E A D Q U A R T E R S: Milwaukee W H AT I T D O E S: Distributes rugged technology to first responders F O U N D E D: 2006 E M P L OY E E S: 10 N E X T G O A L S: Hire five more employees to meet demand LILA ARYAN PHOTOGRAPHY

REVENUE: $10 million

TKK Electronics expects to double revenue with national contract By Molly Dill, staff writer

When Milwaukee IT firm TKK Electronics LLC won its bid for a national contract with public safety purchasing cooperative Savvik Buying Group, it gained a potential 7,000 new customers, which it expects will double its revenue. As a result of the recent award, TKK is adding five new employees to its 10-person staff, said Juan Hernandez, founder and chief executive officer. He plans to hire the new customer service representatives to take on the additional call volume by the end of the first quarter, while adding a new back end e-store ordering process for Savvik customers. “We have normal e-store orders for our existing customers, but this is a contract so it’s a little bit different as it’s different pricing,” Hernandez said. “So we have to separate that.” TKK, which is based in Walker’s Point, distributes rugged electronics to be used by first responders in critical applications. For example, TKK may sell several tablet computers that can withstand heavy use and drops to a police department for use by officers on crime scenes. Savvik is an industry group that helps police and fire departments, EMS, hospitals, schools and other organizations pool resources to complete vendor bid processes for equipment and supplies at lower prices. While TKK had won a contract with Savvik once before, it was for one product. This time,

Savvik members will be able to buy all 200,000 of the IT products TKK carries, Hernandez said. “The major difference with this contract is that it has a broader portfolio of products and services for TKK Electronics to offer, which simply means we are just scratching the surface on where this partnership can go,” said Mickey Schulte, executive director of Savvik. TKK’s current annual revenue is about $10 million. Hernandez expects the new contract to bring in an additional $10 million per year. The contract runs through 2020. “It’s a national, publicly bid contract. It’s valid in all 50 states as a purchasing avenue,” Hernandez said. Hernandez founded TKK in 2006 after working for another technology company and seeing the need for rugged technology lines in police and fire departments, but not many vendors offering them. Now among TKK’s customers are FEMA, Ford Motor Co., the Brazilian Air Force and Volkswagen of America. “Some of the products are available through traditional avenues like online ordering and big box stores…but I think what sets us apart from companies that sell the same products is we do provide customer service,” Hernandez said. “We talk the customers through the buying process and make sure they’re ordering the correct product the first time around.” n biztimes.com / 7

Leading Edge

@BIZTIMESMEDIA – Real-time news

high-end home f ur nishings

‘TO ETERNITY’

BLUE & WHITE ENGLISH JAR LAMP

$125,000 at David Barnett Gallery, Milwaukee American painter Hunt Slonem, of New York City, created this oil painting on an 84-by-71-inch canvas. Its name speaks for itself.

$205 at The Lemon Tree, Mequon Brighten up a room with this hand-painted porcelain lamp, standing at 20 inches tall on a crystal base.

RUSTIC TV CABINET

ERIK LEATHER WING CHAIR $999 to $1,099 at West Elm, Milwaukee Made with Italian leather, this Scandinavian-inspired wingback chair curves to offer a comfortable seat. Available in five colors – Sienna, licorice, oxblood, cigar and mocha – it complements a room of any color.

8 / BizTimes Milwaukee JANUARY 22, 2018

$8,950 (natural finish), $9,550 (premium finish) at La Lune Collection, Milwaukee Complete with a white birch background, willow trim and pine interior and shelves, this media and storage cabinet fits a 41-inch TV. It features bifolding doors and six lower drawers.

IN THE NEIGHBORHOOD we have such fun and unique items. You will find the typical cocktail shakers, glassware, blenders and ceramics. But we also carry kitsch items such as starburst clocks, tiki mugs and boomerang ashtrays. We also like to think we keep the items very affordable.”

TIP TOP ATOMIC SHOP 2343 S. Kinnickinnic Ave., Milwaukee

Where do you get your items? “We acquire items from multiple sources, but our best is from the public who stops in and says ‘My grandma, aunt, or mom has items. Do you buy?’ We are also finding more and more what we call ‘second owners,’ which are people who bought vintage clothing in the 1980s,’90s and now no longer wear it and now want to see these items go on to a third owner who will enjoy wearing the items.”

NEIGHBORHOOD: Bay View FOUNDED: 2001 OWNERS: Jim and Lisa Dutcher EMPLOYEES: Two INDUSTRY: Vintage/resale retail

What draws customers in to your store? “Our customers tell us all the time that

What cool/unique item has stood out to you over the years? “We sold a Heywood Wakefield china

BIZ POLL

What are your bestselling/most popular items? “By far, it’s the vintage clothing. It appeals to all age groups, from 17 to 70 year olds.”

cabinet which was like brand new. It’s great to find furniture that is over 70 years old in near mint condition. The mid-century ceiling lamps are also fantastic, with tear drop glass shades in multi-colors.” Do you have a business philosophy? “‘Buy it when you see it.’ We found in this business that because items are so unique, they don’t stick around very long. So we tend to impulse-buy our inventory. We love it when a customer connects with a treasure and walks out of the shop with a huge smile.” n

A recent survey of BizTimes.com readers.

How will the U.S. economy perform in 2018? It will grow at a healthy pace:

68%

It will be flat, with little to no growth: It will slip into recession:

19%

13%

Share your opinion! Visit biztimes.com/bizpoll to cast your vote in the next Biz Poll. biztimes.com / 9

Leading Edge

INN

BIZTIMES MEDIA – Connect

VAT I

ABOVE: The new “Stream” feature recommends products to users based on their preferences. LEFT: Wantable ships curated style boxes to customers.

New algorithm helps Wantable recommend personalized products

Wantable Inc. Milwaukee

INNOVATION: Product recommendation algorithm FOUNDER: Jalem Getz FOUNDED: 2012 wantable.com 10 / BizTimes Milwaukee JANUARY 22, 2018

FOR ABOUT A YEAR, the staff at Milwaukee startup Wantable Inc. labored over the creation of an algorithm for its e-commerce site that will help the company suggest new products to its customers. Launched Dec. 5, the newly completed feature, called “Stream,” was implemented along with a redesign of Wantable’s web platform. “As we continue to grow, every couple of years we decide to rebuild the systems and this was a major overhaul,” said Jalem Getz, founder, president and chief executive officer of Wantable. Prior to the overhaul, Wantable was more of a styling service, but Getz said this new technology allows for the customer to select one specific, personalized item, and the stylist can then add complementary products to the selection. It’s similar to the experience at a department store like Nordstrom, he said. “Customers can view products that our algorithms feel are a good fit for them,” Getz said. “We really feel the majority of our customers are going to require one or two key items. We’re a customer-centric brand, so our customers are telling us that this is another way they want professional styling.” A customer who visits the Wantable site for the first time is asked to select a category—Style,

Fitness or Men’s Fitness. The user then takes a brief lifestyle quiz, evaluating groups of apparel or accessories and rating each “Love,” “Like or “Dislike” to define his or her style. He or she fills in sizes and measurements, indicates how often individual product types should be included in a shipment, and lists how often the stylist should send outfits for certain occasions, like date nights or work. The customer then receives a shipment of seven suggested pieces of clothing and accessories, tries them on, and can either purchase or return each item. The Stream is a new way for the customer to shop on Wantable, by indicating specific clothing items they would like to receive in their orders. The algorithm can identify that a user has said she’s a size medium and likes the color brown, and as a result, show her those items in the Stream, Getz said. “It’s a highly customized experience,” Getz said. “That algorithm is continuing to be developed… and continuing to be refined by our teams. We believe that it’s going to help us continue to serve the customers we already have.” And it has quite a few of them. Founded in 2012, Wantable now has about 118 employees and the Inc. 5000 listed its 2016 revenue

at $14.1 million. The company operates out of two Milwaukee buildings: a main 30,000-squarefoot office at 112 E. Mineral St., and a 70,000-square-foot warehouse a few blocks away at 507 S. Second St., which handles all distribution. It’s not an ideal setup, and the company has been seeking a larger facility. Getz expects to make a purchase this year or in 2019. “We plan on keeping our Mineral Street headquarters though for a few more years, because since we moved the distribution out of here, we have a lot more space and our employees really like it,” he said. “We actually built out a nice lounge for our employees and have a huge photo studio now.” n

MOLLY DILL

Managing Editor P / 414-336-7144 E / molly.dill@biztimes.com T / @Biz_Molly

GETTING

THERE

on my nightstand... JEREMY FOJUT Co-founder and chief idea officer | NEWaukee

How did you work your way up? “I was hired about four or five years ago to help with the design aspect of projects. A year after I started, I helped open the firm’s Milwaukee office, which has been a really great expansion for Abacus. I had always made it clear that I either wanted to be a partner or start my own firm, so when they eventually asked me to be a partner, it was a two-way street.”

New responsibilities as an owner? “All along, I have been doing the things that I have to do as an owner – developing new business, nurturing existing client relationships, bringing design to a higher level and working on higher profile projects. It’s not easy to balance multiple responsibilities, but there is no way I could do this without my team at Abacus.”

Next career goal? “I want to continue my ownership in the firm on a deeper level. My sights are set on the growth of the company.”

In your free time? “I like to work on sculptures, metal fabrication and woodwork. I like working with my hands, and teaching my kids how to do stuff like that is a really fun experience.”

“Zero to One” By Peter Thiel with Blake Masters AS CHIEF IDEA OFFICER at NEWaukee, Jeremy Fojut is always innovating–and thinking about the process of innovating. One of his favorite books on the subject is, “Zero to One: Notes on Startups, or How to Build the Future” by PayPal co-founder and early Facebook investor Peter Thiel. Fojut refers back to it frequently for its refreshingly contrarian insight on idea generation. “It challenges a lot of traditional thinking about it,” Fojut said. Every innovation is new and

unique, Thiel says, so if you’re copying Mark Zuckerberg or Bill Gates, you’re not learning from their examples of originality. While most companies imitate an existing idea and iterate on it via innovation, or “1 to n,” new ideas take the entrepreneur from zero to 1 and help build the future. “The most important thing I think he says is, strength is new thinking. It’s more important than nimbleness,”Fojut said. “No innovation has happened by groupthink.” n

Balancing work and family life? “When I’m with my kids, I’m about my kids. When I’m with my wife, I’m about my wife. When I’m with church, I do that. When I’m at work, I do that. I concentrate on what I’m doing at the time and try to do it the best I can.”

ERIC HALBUR AGE: 37 HOMETOWN: Racine EDUCATION: Bachelor’s in architecture, University of Wisconsin-Milwaukee PREVIOUS POSITION: Project manager, Abacus Architects Inc. CURRENT POSITION: Partner/owner, Abacus Architects

biztimes.com / 11

BizNews

LAUREN ANDERSON

FEATURE STORY

The Wisconsin Conservatory of Music.

Wisconsin Conservatory of Music finds new, sustainable path forward By Lauren Anderson, staff writer ERIC TILLICH, president and chief executive officer of the Wisconsin Conservatory of Music, is issuing this vow to the Tillich community: If any child wants to take lessons in the organization’s historic mansion on Milwaukee’s East Side, the conservatory will find a way to make it happen.

It’s a pretty bold commitment for a nonprofit organization that has traditionally relied on its private music lessons to bring in revenue. It’s also the kind of challenge the organization, having recently emerged from a burden of debt it’s been saddled with for years, has newfound freedom to tackle. Three years ago was a different picture. With $750,000 of structural debt and its credit line weighing it down, the conservatory was forced

to furlough staff. The then-115-year-old organization was on the brink of closure. “The conservatory was on really rocky financial ground,” Tillich said. “When I came on board (in 2016), what I saw were a lot of structural deficits; the organization was running a year-to-year operational deficit, which puts a burden on the staff and the mission.” Those financial issues had been mounting for more than a decade. After the organization dried up its cash reserves to cover operational costs, it began taking on debt – all of which was exacerbated by the absence of a plan for growing its contributed or earned revenue. The tide began to turn about the time Tillich took the helm in late 2016, when two donors issued a challenge to the board to raise enough money to wipe out its debt. The board completed the challenge in 2017. Meanwhile, ensuring the nonprofit’s future viability forced the conservatory to find new revenue streams. Tillich, whose nonprofit leadership background has included positions with the Milwaukee Symphony Orchestra, Boys & Girls Clubs of Greater Milwaukee and Marian University, has made that his priority. The organization, which is the largest employer of music educators in the state, found its answer in a need among area K-12 schools. In the wake of cutbacks to arts education, finding licensed art and music teachers to fill open

MEET

spots has become increasingly difficult, as they are often part-time roles. Milwaukee Public Schools’ Fill the Gaps initiative is aimed at maintaining arts curriculum in classrooms by contracting trained educators via local organizations to teach until licensed art and music specialists can be hired for permanent placement. The conservatory was approached by MPS with a list of schools that were in need of music instructors. “We had a lot of amazing faculty that are trained and qualified that contribute to the creative economy here in Milwaukee and were ready to work, so it was a great match for us to have these faculty in schools,” said Shalisa Kline Ugaz, executive vice president of advancement and education for the conservatory. It’s made financial sense, too. The school district pays the conservatory using its federally-mandated allotment from the state for arts education. Some schools had money available for a music teacher, but no one to fill the role, Kline Ugaz said. With Kline Ugaz steering its partnerships with schools, named the Conservatory Connections program, the organization is now in 52 schools in six counties across southeastern Wisconsin, serving 11,000 students weekly. Over the past two years, the conservatory has gone from pulling in $275,000 from the program to $1.1 million. MPS represents about $400,000 of

BETTER. EVENTS THAT WORK

word out,” Tillich said. “That’s a piece of the puzzle. We’re doing our strategic plan right now and realizing we’re just going to have to invest more in order to capture more of the market share.” The conservatory is also working to grow its distance learning offerings, which will allow its instructors to teach virtual lessons to students outside of southeastern Wisconsin. As the leadership looks to the future, the focus is on casting a wider net to the community. “One of the things we’ve talked about is, how do we make this a community music school for everyone?” Tillich said. “Looking at the mansion, it can be off-putting. It’s iconic, but it’s a little intimidating at times. So our education team is trying to bring more schools into the building, kids who haven’t had a chance to experience it, and make it a center for everyone. We’re not just serving one population – we’re serving the community.” Beyond getting people in the doors, that means a commitment to getting more scholarship money into families’ hands, bringing on more staff who are bilingual and hosting instrument drives. “Whatever barrier there is for a child to study at the conservatory, we’re trying to remove that,” Kline Ugaz said. “Now that we just started to reach deeply into our programs, we’ve had overwhelming response from families interested in coming here. So we’re trying to figure out how to maintain financial stability and also how to serve the community.” Tillich said the organization may launch a capital campaign to build up its scholarship fund, recognizing that there needs to be money if the conservatory is going to come through on its promise. “If any kid wants to take a lesson here, we’re going to find a way to make it happen,” he said. “I don’t care what it takes. We’re going to go raise the money, we’re going to find a scholarship, we are committed to making that happen. It’s a new feeling and vibe for the conservatory.” n

LAUREN ANDERSON

that total, Tillich said. The Conservatory also relies on contributed revenue to support the program. “It was a great fit because we’re growing the Connections program and serving more kids, but also putting some stability behind the conservatory from a financial standpoint,” he said. “…We’re focused on what the need is. I really think that’s how you should approach business – you’re filling a need in the community, rather than just trying to sell music education.” The conservatory has also seen growth in its bread-and-butter revenue stream, private lessons for children and adults, posting a 12 percent jump in those services in 2016, followed by a growth rate of about 20 percent in 2017. Those factors have made for a much different financial picture, one that Tillich said is far from common among nonprofit organizations. In 2016, the conservatory ended the year $180,000 in the black. Tillich projected it would end 2017 with a net income of $125,000. “It’s a combination of being smart in terms of growing the organization without burning yourself with fixed costs and growing it to have a good ROI on our programs,” Tillich said. “We have a good balance right now.” Tillich and Kline Ugaz attribute that growth to a few different factors. Part of it could be the economy, Tillich said, as families may have more discretionary income to spend on lessons. Being in the schools, Kline Ugaz said, also lends more exposure to the conservatory’s teachers in the community and provides a new “pathway” to its doors. Customer data backs that up, Tillich said. A recent survey of the organization’s customer base indicated that the primary reason people choose to take lessons there is for the faculty. Tillich said the conservatory has also invested in geomarketing – an effort that’s yielded results that are standard to the industry. “It didn’t blow us out of the water but I know it’s helping our marketing initiative just to get the

Inside the McIntosh-Goodrich Mansion where the Conservatory is located.

biztimes.com / 13

ARTHUR THOMAS

BizNews

Technology investments a draw for new Wagner Cos. president WHEN MICHAEL DOVER was considering an opportunity to become president of Milwaukee-based The Wagner Cos., there were a number of factors that pushed him to take the position. For starters, he felt the company, which makes architectural railings and systems, along with other metal components, had a strong brand and reputation for quality that created “a fascinating opportunity for growth.” “It’s a very, very wide-open marketplace and we see tremendous opportunities for Wagner to continue to extend the products that it manufacturers,” said Dover, who joined the company in late 2017. Wagner already touts installations around the world, from Kingdom Tower in Saudi Arabia to New York City subway stations to the Red Rocks Amphitheatre in Colorado. Beyond the brand, Dover, previously president of Menomonee Falls-based Scan-Pac Mfg. Inc., said he was drawn to the passion of the people who work at Wagner. The company quietly converted to an employee stock ownership plan two years ago and Dover said having employee owners shows. “You don’t have to do what a lot of other manufacturing (companies) need to, which is try to get them to understand the part they play in the success of the company, because now they’re an owner,” he said. “It helps from a recruitment, a retention (standpoint) but also in the continuous improvement we see on the shop floor. They understand; we all do, because we’re all shareholders in the company.” Former owner Bob Wagner re14 / BizTimes Milwaukee JANUARY 22, 2018

mains the company’s chief executive officer. He said there wasn’t a next generation of ownership to pass the company on to and he and his sister wanted to make sure The Wagner Cos. stayed in Milwaukee. “It’s wonderful to know that it’s going to stay here, it’s going to stay with local control and I’m really pleased about that, and yet I’m not done yet,” Wagner said. “I enjoy creating things and serving our customers, so I’m still around.” One of the things Wagner is working on is finding opportunities for the company to expand. The Wagner Cos. has grown from providing railing components to engineering entire systems. It’s also pushed into areas that go beyond metal work, like lighting. In addition to growth opportunities and employee ownership, Dover said he was drawn to the company’s investment in technology. The Wagner Cos. implemented an enterprise resource planning system in 2011, invested in a flatbed fiber laser cutting system that’s connected to a press brake, and just as Dover was joining the company, added a 3D visual inspection machine. A major computer system upgrade is planned in 2018. “To continue to invest in that is a testament to Bob and the other managers that are here that makes it easier for an outsider to come in,” Dover said. The 3D visual inspection machine alone has the potential to save hours of time. In the past, operators used a tool to measure tubing to check if it was bent to the correct specifications. It was a lengthy pro-

President Michael Dover and CEO Bob Wagner in front of The Wagner Cos.’ new 3D visual inspection machine.

THE WAGNER COS.

10600 W. Brown Deer Road, Milwaukee INDUSTRY: Architectural railings and components EMPLOYEES: 150 wagnercompanies.com

cess and two operators could easily end up with different results. The new machine uses 16 cameras to take images of the part, compares it with the engineer’s drawings, provides color-coded feedback and then can adjust the setup on the machine to bend the next piece correctly. “That type (of technology) adds to our productivity on the shop floor, but speaks to our customers, as well,” Dover said. “They now know when they get a report from us or they come and see that we’re able to manufacture product, to print, very rapidly from them.” He acknowledged that as a custom metal manufacturer producing small to mid-size volumes, implementing some technology, like robotics, can present a challenge, but finding areas to improve is important because speed helps fend off overseas competition. “It means we have to be a fairly nimble organization,” Dover said. “To be able to still do highly technical custom work but to be able to do it competently and fast is a core com-

petency and a competitive trait for us. That will slow down the global penetrators here in the United States because there’s always a time delay.” Wagner pointed out the company cannot start fabricating a custom rail system until the concrete is poured and exact dimensions are taken. “Then they need it immediately,” he said. “That’s where we make our living.” n

ARTHUR THOMAS Reporter

P / 414-336-7123 E / arthur.thomas@biztimes.com T / @arthur8823

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The kind of people who are coming through would typically be

people that we serve as clients—people that we could do business with in the future. It’s allowing the community we serve to put

”

a face behind a name and highlight the various areas of our company.

-Brian Patrick – Ogden & Company, Inc.

2018

THURSDAY | MAY 31, 2018 | 9AM - 5PM POTAWATOMI HOTEL & C ASIN O B IZTIME S .C O M /BI Z EX PO / 2018 PRESENTED BY:

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@BIZTIMESMEDIA – Real-time news

The City of Cudahy is hoping to redevelop the 32-acre former landfill (yellow marker) into the Penn Place mixed-use development.

Bear apartment project could springboard Cudahy’s long-delayed landfill redevelopment

A MULTI-FAMILY RESIDENTIAL project could be the key to jumpstarting the long-awaited Penn Place Redevelopment District on a former landfill in Cudahy. Kenosha-based Bear Development LLC is working on securing Wisconsin Housing and Economic Development Authority workforce housing tax credits to develop 83 townhomes on 5.3 acres of vacant property at 4701 S. Pennsylvania Ave., next to Lake Parkway and General Mitchell International Airport. The two- and three-bedroom units will range in size from 1,200 to 1,350 square feet, with rents ranging from $500 to $1,200 per month. For years, the city was hoping to attract retail users to the site. While retail is still a goal, the current retail environment has delayed those plans a bit. “We are going through a transformative era, in terms of bricks-and-mortar retail,” said Brian Biernat, director of economic development for the City of Cudahy. “We have to demonstrate there are enough rooftops before attracting the right retailers.”

FEATURED DEAL: F O R M E R R E U S S FEDER AL PL A Z A BUILDING SOLD

ADDRESS: 310 W. Wisconsin Ave., Milwaukee BUYER: An affiliate of Time Equities Inc. SELLER: RAIT Reuss Federal Plaza LLC CLOSING DATE: December 29, 2017 SALE PRICE: $19.5 million 16 / BizTimes Milwaukee JANUARY 22, 2018

The landmark cobalt blue, 14-story office building on West Wisconsin Avenue in downtown Milwaukee, formerly known as the Henry S. Reuss Federal Plaza, was purchased at the end of 2017 by a New York-based investment firm. The 578,000-square-foot structure is the third-largest multi-tenant office complex in the state, behind the U.S. Bank Center and 411 E. Wisconsin Ave. buildings in downtown Milwaukee. The building is currently just more than 50 percent occupied, but occupancy is expected to fall to the mid-30 percent range as Bon-Ton Stores consolidates its employees in the downtown Boston Store building and another large tenant downsizes. Brad Gordon, director of acquisitions at Time Equities, said the company is planning to invest more than $10 million in common building upgrades and amenities to bring it up to a Class A office space. “We feel the timing is perfect to accomplish this and intend to be a member of the Milwaukee business community indefinitely,” Gordon said. The property has an assessed value of about $28.3 million, according to city records.

To date, the city has spent $1.7 million on various aspects of the 32-acre Penn Place development. Cudahy is also committed to spending an additional $3.3 million for infrastructure costs. “The (Community Development Authority) recognizes redeveloping a landfill is not the easiest project to take on,” Biernat said. “If this were located somewhere else, we would not be dedicating this much time and energy. But because of the high traffic counts, it is worth our while for the site to be redeveloped.” The Bear proposal could be the key to getting the stalled plans off the ground, Biernat said. But the company will not find out until March if the WHEDA tax credits are approved. Cudahy has had success with Bear in the past. In 2016, Bear developed Layton Square Apartments, a four-story, 57-unit workforce housing building on Layton Avenue with street-level retail. “We’re pretty happy that there is a developer that we have a track record with who has an interest in the site,” Biernat said. The City of Milwaukee bought the Cudahy property more than 60 years ago and used it as a solid waste landfill until the 1960s. The landfill was used by the Milwaukee Metropolitan Sewerage District for river waste until about 2000. The site has been eyed for redevelopment since the mid-2000s, when Milwaukee-based Cobalt Partners LLC had the land under contract to purchase. The Milwaukee Common Council approved a $1.25 million sale in 2010. Cobalt Partners, which has recently developed the White Stone Station development in Menomonee Falls and 84South in Greenfield, was planning a multi-million-dollar development on the property that included a big-box retail store and a hotel. Those plans never came to fruition due to the site’s environmental challenges and the Great Recession. Cudahy’s CDA took control of the property in early 2015. “We’ve gone through a couple

of hiccups in terms of the commercial interests, and trying to get retail has been fits and starts,” Biernat said. One of the hiccups was recent interest by a hotel ownership group that backed out when it realized environmental clean-up costs would be too steep to move forward with development, Biernat said. “When the Bear proposal came forward last spring, we were excited,” Biernat said. “We’re not out of the woods, in terms of what we need from the DNR, but I feel confident we will get there within the year.” The Penn Place development is part of a broader plan for Pennsylvania Avenue. The city is also planning to redevelop a large site on the east side of the street. The largest parcel is an abandoned truck terminal that is about 10 acres. There are also smaller vacant pieces of land and other parcels that have either been abandoned or are blighted, Biernat said. Cudahy has reached its tax increment capacity and is unable to create a new TIF district for three years. However, the city has started planning for the redevelopment. “This area is right off Lake Parkway,” Biernat said. “You can get to the (downtown Milwaukee) Central Business District in under 10 minutes. I always though the gentrification process would ultimately make its way to this part of the South Shore because you don’t lose anything. You still have the amenities, it’s easy to get to and it’s affordable.” n

MISSION BBQ Mission BBQ is planning to open its first Wisconsin restaurant at the Southport Plaza shopping center in Kenosha. The proposed 4,100-square-foot restaurant will be built on the former site of a Fazoli’s restaurant, which was razed in 2016. Mission BBQ was founded on Sept. 11, 2011, to commemorate the Sept. 11, 2001 terrorist attacks, according to the company’s website. “We believe there is nothing more American than BBQ,” the website states. “And nobody more American than the brave men and women who have sworn to protect and serve our communities and our country.” OWNER: Southport Plaza LLC DEVELOPER: CM Lavoie & Associates LOCATION: 6930 75th St., Kenosha

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STORY COVER

l e u

r o f

THE LONG-RUNNING EXPANSION OF THE U.S. ECONOMY that began in 2009 continued in 2017.

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cut x ta l r a er e d t th? e a f e w l r o W il a r k g ic g r sp onom ec

Second and third quarter growth in U.S. gross domestic product exceeded 3 percent, a quarterly growth level that hadn’t been achieved since the first quarter of 2015.

The U.S. unemployment rate continued a steady decline from 4.8 percent in January to 4.1 percent in November. The low unemployment rate shows the strength of the U.S. labor market, but also demonstrates why many businesses are having a hard time finding employees, which hurts their ability to grow. The low unemployment rate could also be dampening job growth. It’s hard to create jobs without people to fill them. Despite the economic growth of 2017, U.S. job growth for the year was down compared to 2016. From January through November the U.S. economy created 1,916,000 jobs, compared to 2,085,000 jobs created during the same time period in 2016, according to the U.S. Bureau of Labor Statistics. A year ago, many wondered how President Donald Trump’s policies would impact the economy. He has not been shy about calling attention to its performance last year. In December, Trump tweeted, “Things are going really well for our economy, a subject the Fake News spends as little time as possible discussing! Stock Market hit another RECORD HIGH, unemployment is now at a 17 year low and companies are coming back into the USA. Really good news, and much more to come!” 18 / BizTimes Milwaukee JANUARY 22, 2018

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For most of 2017, Trump and the Republican-controlled Congress had few major legislative accomplishments to boost the economy. But Trump was able to roll back numerous regulations, a pro-business approach that helped inspire optimism for American companies. Meanwhile, investor optimism was seen in the performance of the U.S. stock market in 2017, as the Dow Jones Industrial Average rose by 25 percent during the year. The S&P 500 increased 19 percent and the Nasdaq was up 28 percent on the year. Then, at the end of 2017, Trump and the Republicans pushed through a $1.5 trillion tax cut, which includes a significant reduction in the U.S. corporate tax rate from 35 percent to 21 percent. In another tweet, Trump said the tax cut will spur more economic growth in 2018: “All signs are that business is looking really good for next year, only to be helped further by our Tax Cut Bill. Will be a great year for Companies and JOBS! Stock Market is poised for another year of SUCCESS!” Business leaders are hopeful that the federal tax cut will indeed spur more significant economic growth in 2018. In a survey of Wisconsin business leaders by Wisconsin Manufacturers & Commerce, 77 percent said they either “strongly” or “somewhat” supported the federal tax reform package. Michael Knetter, a former staff economist for presidents George H.W. Bush and Bill Clinton, said the federal tax cut will be a major theme for the performance of the U.S. economy in 2018. “It’s really a question of whether new demand caused by the tax cut can call forth increased supply or whether it will simply boost prices because we are (already) near full employment,” said Knetter, who once again provided the macroeconomic outlook at BizTimes Media’s annual Northern Trust Economic Trends Breakfast on Jan. 19. “(The tax cut) will be stimulative in the near term, and the long-term effects are more uncertain. If it expands supply, the cut could pay for itself, but I am skeptical. Of course, so many other things will change in the economy, we will never know for sure. I think the reduction in corporate taxation makes good sense. That is the part of the bill that I believe is truly helpful. It makes it easier for companies to locate here and be competitive. The rest of the bill seemed like a missed opportunity to simplify the code.” To seek more insight on what lies ahead for the U.S. economy in 2018, BizTimes Milwaukee editor Andrew Weiland conducted his annual macroeconomic interview with Knetter, the president and chief executive officer of the University of Wisconsin Foundation. The following are excerpts from that interview:

BIZTIMES: The U.S. economy appears to be picking up steam. U.S. GDP grew more than 3 percent for the second and third quarters. Why has the economy gained momentum? Do you expect it to continue to grow at 3-plus percent next year? KNETTER: “This has been a broad expansion as economies around the globe finally seem to be growing simultaneously. It has been a long, slow recovery, but that is not unusual in the wake of a financial crisis as firms and households behave cautiously and rebuild their balance sheets in the early phase of the upturn. That slow gathering of momentum is what many economists predicted coming out of the financial crisis. The U.S. tax cut will help sustain corporate earnings and thus the stock market, which bodes well for consumption in 2018. I expect the economy to continue to expand, although the tight labor market will constrain growth and may put upward pressure on prices.” BIZTIMES: The U.S. unemployment rate is now at 4.1 percent. How much lower will it go? KNETTER: “It may tick down below 4 percent, depending on how participation evolves.” BIZTIMES: With unemployment so low, we hear from 20 / BizTimes Milwaukee JANUARY 22, 2018

MICHAEL KNETTER a lot of business leaders who say they are struggling to find workers. Any ideas for how to address that challenge? Could a more open immigration policy help here? KNETTER: “Immigration is the fastest way to grow the workforce beyond what domestic demographic patterns imply. Obviously, it takes about 25 years to grow a new domestic worker if you start now! So any near term expansion of the labor force requires higher participation rates (people who left the workforce these last few years return to look for a job) or bringing new workers into the country.” BIZTIMES: Despite the low unemployment rate and the shortage of workers, wages in the U.S. continue to grow sluggishly. Why is that? Do you expect wage growth to pick up in 2018? KNETTER: “Low-skilled workers are still competing with technology, which will hold back wage growth in many occupations. I think labor costs will rise and incomes will rise more for white collar than blue collar workers.” BIZTIMES: The Fed recently raised interest rates for the fifth time since the Great Recession. Should we expect more rate increases in 2018? What impact will these moves have on the economy? KNETTER: “I think the Fed is best viewed as following, and not leading, the economy. I expect the Fed will keep moving rates up as long as the economy seems able to advance. Three hikes this year seems plausible given the momentum in the economy and the tax cut.” BIZTIMES: What impact will the federal tax cut have on the economy? KNETTER: “The magnitude of the tax cut is estimated to be about $1.5 trillion over a decade. The cut is expected to have a modest positive impact on growth, which means the net impact on the national debt over a decade is a $1 trillion increase (i.e., $500 billion in new revenues will come from the additional economic growth). It is estimated that 80 percent

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of filers will have lower taxes, 15 percent will be about the same, and 5 percent will see taxes go up. “The corporate rate falls from 35 percent to 21 percent, while the top individual rates drop from 39.6 percent to 37 percent. The individual rate cut ends in 2025, while the corporate cuts are permanent. The goal of lower corporate taxes is to encourage more companies to remain in or move to the U.S. The ultimate incidence of the corporate cut is unclear. The degree to which it will increase profits and the return to capital, decrease prices or increase wages is a matter of debate. “The number of moving parts in the tax bill make it difficult to give a definitive up or down on the whole bill. It really depends on your goals and core beliefs about efficiency versus equity. I tend to

believe that the provisions that simplify the code and reduce corporate taxes are positive features. The individual rate cut probably has little stimulative effect and has the biggest impact on growing the deficit.” BIZTIMES: What is the best- and worse-case impact of the tax cut, especially on the economy but also on federal programs and the deficit? KNETTER: “The worst case impact would be realized if interest rates begin to rise and the debt service costs grow dramatically. The best case would be if the tax cut enables a continuation of the expansion for several more years. I am concerned that the worst case scenario has a higher likelihood of being realized.”

BIZTIMES: The stock market is at a record high. What is your outlook for equities in 2018? KNETTER: “Earnings continue to look good given the momentum in the economy and the corporate tax cut. Equities could continue to run higher for another year barring a negative catalyst. I would expect a normal year, maybe plus 6 to 8 percent in public equities.” BIZTIMES: What inning is the U.S. economy in? KNETTER: “An extra one. Or two! It’s a long expansion by historical standards.” BIZTIMES: Should we all invest in Bitcoin? Or are we too late? KNETTER: “We should all change our names to

Economic Trends 2018 Title Sponsor:

Sponsor:

We remain overweight equities as we enter 2018. The global economy is showing broad momentum and inflation is putting little pressure on monetary policy. In response to strong 2017 market returns, we’ve been reallocating toward less-expensive asset classes. We believe the two biggest potential threats to the economy and markets “staying in motion” are a central bank mistake and a China slowdown. We entered last year overweight risk assets because we believed the global economy was gaining momentum and the U.S. government was set to take some load off of the Federal Reserve. Economic fundamentals positively surprised in 2017, with the contribution from the U.S. government being more regulatory than legislative in nature. As investors bid up risk assets in 2017, fixed income continued to provide middling return potential. To paraphrase Newton‘s First Law, an object will remain in motion unless it is compelled to change by an external force. We think that describes the general state of the global economy, which we expect should produce another year of solid growth in 2018.

At Davis & Kuelthau, we are passionate about partnering with our clients to achieve their legal and business objectives. Our attorneys have helped thousands of businesses throughout the Midwest, and nationally, grow and thrive in a variety of economic climates.

Bull markets are always vulnerable to central bankers “taking away the punch bowl” by raising rates, but we think continued subdued global inflation moderates this risk. In addition, the low level of long-term interest rates globally and the fear of inverting the yield curve should cap how far the Fed raises short-term rates. Accelerating growth in China has supported the global economic and financial market rebound since early 2016. This growth may have been engineered ahead of the Party Congress this past October. While a material slowdown of Chinese growth is a risk, our base case of modest growth deceleration may help to offset global inflation risks and support risk taking. Our themes of Entrenched Growth, Stuckflation and Waiting for Monetary Godot remain front and center as we look into 2018. Global economic growth has shaken off concerns about the recovery’s age, and had actually been gaining momentum toward the end of last year. The inflation outlook remains “stuck” at low levels, as technology adds supply to the economy and restrains pricing power. This is leading to Monetary Godot, as central bankers debate the cyclical vs. secular nature of inflation and whether they might make a mistake by tightening policy too soon. We see the intersection of these three themes continuing to support risk taking in 2018. As we begin the year, we look forward to hearing from this year’s Economic Trends panelists to gain their perspectives on the business and economic prospects for 2018.

Jim McDonald

Chief Investment Strategist, Northern Trust Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Founded in Chicago in 1889, Northern Trust has offices in 19 U.S. states, Washington, D.C., and 23 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2017, Northern Trust had assets under custody of US$9.7 trillion, and assets under management of US$1.1 trillion. For more than125 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. For more information, visit www.northerntrust.com, follow us on Twitter @NorthernTrust, visit us at 526 E. Wisconsin Ave. in Milwaukee or call 414-905-7800.

22 / BizTimes Milwaukee JANUARY 22, 2018

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Blockchain and IPO ourselves! The idea of a cryptocurrency whose supply is not tied to a government or national monetary authority has some merit. Fiat currencies (currencies not backed by hard assets) are a relatively new phenomenon and most of them lose value. So for many people around the world, this could be quite attractive. A cryptocurrency only becomes useful and valuable if many other people are using it. It seems likely one cryptocurrency will eventually prevail but I am not sure that is Bitcoin. The supply side of Bitcoin seems mysterious to most people.” BIZTIMES: Will health care reform make a comeback in 2018, or is it dead? KNETTER: “It looks like it’s in the penalty box. I can’t tell if it’s a major or a minor penalty, but I doubt Congress could pass anything on health care given how hard it was to cut taxes.” BIZTIMES: President Trump talked tough on trade this year. Was any progress made there? What direction is the U.S. going with its trade policy? KNETTER: “So far, trade and the wall have been vehicles for cathartic trash talking, which can be both entertaining and hurtful. Whether the rhet-

oric turns into any real policy thrust remains to be seen. I hope nothing gets done on this front.” BIZTIMES: When is the next recession looming? KNETTER: “If I knew, I would be spending my future fortune and keeping the details to myself. It’s looming now but the economy could keep growing if we don’t have a negative catalyst. There has been fairly balanced global growth this past year or two and earnings of companies are holding up well. That means nothing appears to be broken in terms of the growth path. It is possible the tax cut will be somewhat disruptive in that sense, pushing the economy further than a fully employed labor force can handle and creating some inflationary pressure. It is possible the tax cut now is like opening one more bottle at a party that has gone on too long already… Time will tell.” BIZTIMES: Wisconsin is betting heavily on Foxconn to become an economic anchor. Is that a good bet? How do you think the Foxconn deal will play out for the state? KNETTER: “Foxconn is a serious company with over 1 million employees worldwide. That speaks to the volume of work they do and you just don’t get that

volume of work without delivering good products at good prices. It’s a competitive world and they are clearly competing well. “There have been complaints about labor practices in China, including much-publicized suicides by workers there. A deeper dive shows that some of this is related to the sheer scale of their employee base in China and work practices that are not to Western standards. Their largest complex is called Foxconn City and it was reported to have 300,000 employees. That is clearly a different operation. “Foxconn has production facilities around the globe but very little production taking place in advanced Western countries. That makes it hard to predict how this new venture will unfold. It is uncharted territory for both parties. I am convinced that Foxconn knows how to satisfy customers or they would not be where they are. And Wisconsin has a great workforce at many levels. But it is not obvious this is a great fit given the limited experience Foxconn has in the West. In the end, it will be what both parties choose to make of it and we should hope that it works well and that it helps Wisconsin gain a bigger toehold in the knowledge economy space.” n

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Manpower survey shows state’s employment potential as the skills gap widens By Maredithe Meyer, staff writer

WISCONSIN’S EMPLOYMENT NUMBERS for the upcoming year surpass regional and national figures in two categories: unemployment and hiring intention. While the national unemployment rate sits at 4.1 percent, Wisconsin’s is at a lower 3.2 percent and, according to ManpowerGroup’s 2018 employment outlook survey, the Midwest has a hiring intention of about 20 percent – the strongest in 10 years – but Wisconsin’s intent to hire is stronger by about 1 percent. Last year’s Foxconn Technology Group deal, which promises the state a surge of manufacturing jobs, partly explains Wisconsin’s strong hiring outlook, but the numbers still show potential and an environment for growth. However, Becky Frankiewicz, president of ManpowerGroup North America, said this reality also presents a problem – the exacerbation of the ever-growing talent shortage, both on the national

and state levels. “We are finding that 46 percent of U.S. employers are experiencing talent shortages,” said Frankiewicz, who was a panelist at the Northern Trust Economic Trends breakfast presented by BizTimes Media on Jan. 19. To retain existing talent, companies need to invest more time and resources in up-skilling and re-skilling their existing employee base. And to attract new talent, companies need to meet talent expectations, she said. “In a time of supply and demand mismatch – we have increasing demand and a shortage of supply, both from a population perspective, as well as from a skills perspective – talent in the marketplace is in an ideal place to get what they want from the workplace,” Frankiewicz said. The workers currently in the driver’s seat are those of the “next gen work movement,” which

BECKY FRANKIEWICZ Manpower defines as an increasing cross-generational preference toward non-traditional employment – think freelancers and independent contractors. The millennial generation makes up a large portion of this movement but baby boomers are also represented. Companies need to meet expectations such as job . . . . . . . . . . . . . . . . . . FRANKIEWICZ continued on page 26

Bold Leaders. Bright Ideas. Apply Today. Accepting nominations for the 14th annual

Ideal Bravo! Entrepreneur nominees are individuals who demonstrate the best traits of entrepreneurship, including willingness to take risk, drive, perseverance, and more! Ideal I.Q. (innovation quotient) nominees are companies who develop innovative products or services, or those with notably unique and innovative processes, operational structures and/or market strategies.

To submit your nomination visit www.biztimes.com/bravo Past Bravo! Lifetime Achievement award winners have included: Carol Schneider, George and Julie Mosher, Gary Grunau, Michael Cudahy, Sheldon Lubar, Fritz and Debra Usinger, Stephen Marcus, George Dalton, Robert Kern and Harry Quadracci Past IQ award winners have included: Braise Restaurant Supported Agriculture, Classmunity, Color Ink Inc., Dynamic Solutions, Worldwide LLC, HaloVino, Lynch & Associates – Engineering Consultants LLC, OnKÖl, Stormwater Solutions Engineering LLC and True Process Inc.

24 / BizTimes Milwaukee JANUARY 22, 2018

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Health care consolidation expected to continue in 2018 By Lauren Anderson, staff writer

AS SOON AS NEWS BROKE in December of Milwaukee-based Aurora Health Care Inc.’s plans to merge with Advocate Health Care Inc. of Downers Grove, Illinois, speculation began to swirl around which other health care consolidations would follow. Aurora’s announcement came on the heels of news from CVS Health Corp. that it planned to buy insurance provider Aetna Inc. And just a week after Aurora’s announcement, reports surfaced that St. Louis, Missouri-based Ascension, parent of Columbia St. Mary’s and Wheaton Franciscan Healthcare, is in merger talks with Providence St. Joseph Health – a union that would create the largest hospital owner in the country. In light of the pace of health care consolidation announcements in recent months, those in the industry weren’t surprised by Aurora’s move. Rather, it’s seen as a harbinger of things to come. “Mergers will continue to accelerate – and not

just health systems,” said Nick Turkal, chief executive officer of Aurora Health Care, regarding his predictions for 2018. Turkal, a former physician who has led Aurora since 2006, would become co-CEO with Advocate Health Care CEO Jim Skogsbergh. Turkal presented at the Northern Trust Economic Trends Breakfast presented by BizTimes Media on Jan. 19. A shift in the industry away from fee-for-service toward a value-based care delivery and payment model is among the factors propelling the trend toward consolidation, along with the goal of facilitating population health management and clinical integration. While, historically, consolidation among providers has not translated to lower costs for consumers, it remains to be seen what the new wave of mergers will mean in the current environment. “Advocate and Aurora are two organizations

NICK TURKAL dedicated to lowering cost and raising quality – that won’t change,” Turkal said. The Aurora-Advocate merger, which is expected to close by mid-year, will result in improved efficiencies, he said. “Our biggest opportunity will be accomplished through the efficient delivery of health care, focused . . . . . . . . . . . . . . . . . . . . . . . TURKAL continued on page 26

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Special Report ECONOMIC TRENDS

Jason CEO seeks to maintain balance amid optimism By Arthur Thomas, staff writer

AT A HIGH LEVEL, there’s plenty for manufacturers to be optimistic about heading into 2018, but there are always some industries that are down and it’s good to balance optimism with “a little bit of healthy paranoia,” says Brian Kobylinski, chief executive officer of Jason Industries Inc. Jason is a Milwaukee-based diversified industrial company serving a variety of end markets, including heavy fabrication, oil and gas, construction, automotive, heavy industrial equipment, rail, turfcare and motorcycles. The company’s businesses provide finishing, component, seating and acoustics products. Kobylinski came to Jason in the spring of 2016 after spending 23 years at Menomonee Falls-based Actuant Corp., and was promoted to CEO a few months later. Jason has been through a number of changes in recent years, most recently a series of initiatives that seek to reduce costs and expand the company’s margins. Kobylinski presented at the Northern Trust Economic Trends Breakfast presented by BizTimes Media on Jan. 19. He pointed to indicators like the Institute for Supply Management PMI – which has been in positive territory for 16 months and trended higher in 2017 – as reason for manufacturers to be optimistic. He noted some end markets, like heavy industry, fabrication and general industry, as areas seeing growth. “The sentiment is more positive today than it would have been nine months ago,” Kobylinski said. At the same time, Jason is dealing with other end markets that are challenged. The rail industry is in year two of what is typically a four-year down cycle, U.S. light vehicle sales were down almost 2 percent after back-to-back record years and motorcycles face changing consumer demographics. All diversified companies deal with some of their markets being up while others are down. Kobylinski said part of the challenge is identifying when and where to shift resources to take advantage of growth opportunities. The challenge is made more complex by long-term trends reshaping industries, like the emergence of ridesharing and autonomous and electric vehicles in automotive, or aging customers in motorcycles. “When you look at industrial companies, we’re facing more of the transformation market dynamics that tech used to have,” Kobylinski said. In some areas, manufacturers may not have the internal resources or expertise to address those 26 / BizTimes Milwaukee JANUARY 22, 2018

long-term shifts. Kobylinski said in automotive, Jason is looking to build its relationships with others to be able to respond as the market shifts. Motorcycles, in contrast, are an area where Jason’s seating products have a direct influence as companies like Harley-Davidson Motor Co. work to attract new riders. If new demographic targets require new seat profiles, Jason has to anticipate those needs and respond. Manufacturers are also facing challenges and opportunities within their own facilities as technologies like automation, robotics and artificial intelligence continue to grow. Kobylinski said companies should embrace, not ignore, these changes, but implementing them doesn’t have to be a massive undertaking. He recalled during the very

BRIAN KOBYLINSKI early stages of online commerce, a company he worked at moved something from a fax distribution to an online offering. It was a small change, but made things easier for customers. “It’s those practical approaches I think a company like ours will take,” he said. n

FRANKIEWICZ. . . . . . . . . . . . . . . . . . . . . . . from page 24

TURKAL. . . . . . . . . . . . . . . . . . . . . . . . . . from page 25

customization, the ability for employees to work when and where they want, Frankiewicz said. And for the talent a company has already attracted, reincorporating internal development opportunities is necessary to prepare employees for the future. “We just don’t have enough talent in general, so you have to really maximize the talent you have inside your company,” Frankiewicz said. For Wisconsin’s manufacturing sector, which this year leads the state in hiring intent, the need to re-skill or up-skill is especially crucial as it transitions into an age of digital automation manufacturing. Sixty-five percent of the cross-sector jobs that will eventually employ younger millennials currently aged 18 to 24 don’t even exist yet, according to Frankiewicz. So it’s safe to say new age manufacturing skills are unlike those of the past, she said. “A digital twin analyst, for example, is a role that will be brand new in next generation manufacturing and it’s a human being working alongside an AI or a robot,” Frankiewicz said. “That’s a role that wouldn’t be necessary today, but in the future, it will be.” Artificial intelligence will take over highly replicable tasks such as assembly line work, but humans will continue to perform intervention-based tasks such as data analytics, a task that will likely produce job growth, Frankiewicz said. Eventually, AI will create a net benefit for job creation, she said. n

on population health,” Turkal said. “...There will be many additional opportunities to realize cost savings, including supply chain management.” Meanwhile, health care systems continue to look to innovation to improve outcomes, increase efficiencies and reduce costs. Turkal expects this year will also bring accelerated capability in predictive analytics in health care. Innovation, Turkal said, can come both from within and outside of an organization, but striking a balance of both is important. He said Aurora has worked with internal researchers to discover advancements, as well as adopting new technologies found outside the system. “Aurora’s own innovation journey has been an evolution from discovery and learning to now building,” Turkal said. He noted Aurora’s partnership with Northwestern Mutual Life Insurance Co. to that end. The health care system recently announced its $5 million commitment to support health-related startups in Milwaukee, coinciding with a similar initiative from Northwestern Mutual. Turkal said he also expects providers to offer new and consumer-friendly models of delivering care to patients this year, as health care systems respond to the “rise of the consumer voice.” “E-visits and video visits are just the start of the powerful way the consumer affects health care delivery,” he said. n

MMAC member optimism high for 2018 Percent expecting profit gains nearly reaches post-recession high By Bret Mayborne, for BizTimes

CONTINUED OPTIMISM was expressed by Milwaukee-area businesses for 2018, according to the Business Outlook Survey conducted by the Metropolitan Milwaukee Association of Commerce. Eighty percent of businesses surveyed see sales increases in 2018, 75 percent predict profit gains and 69 percent expect employment growth for their local operations. Those numbers suggest MMAC members are more optimistic than they were a year ago. Last year, 73 percent of MMAC members predicted sales increases, 71 percent predicted profit gains and 61 percent predicted employment growth for 2017. The percentage of MMAC members predicting profit gains in 2018 is the second-highest since the Great Recession. Since then, only the 2015 survey had a slightly higher (76 percent) percentage predicting profit gains. The national economic expansion is now into its ninth year – one of longest on record – but it begs the question of how long it will last. While the metro area’s overall job trend was fairly sluggish in 2017, business expectations for jobs, profits and sales continue to suggest a strong local growth environment for 2018. Sales optimism among Milwaukee-area businesses remains strong. Eighty percent of those surveyed expect increases in real sales levels in 2018. The proportion predicting 2018 sales growth ranks higher than the 73 percent that began 2017

predicting sales gains, and ranks as the strongest calendar year sales expectation expressed since 2015’s second quarter. Currently, only 6 percent predict sales declines, while the remainder (14 percent) see no change. MAYBORNE The sales outlook by industry is fairly balanced. Eighty-one percent of manufacturers predict sales growth in 2018, versus 79 percent among non-manufacturers. By employment size, large employers (100 or more employees) are somewhat more likely to forecast 2018 sales gains than small employers (84 percent of large employers see sales increases versus 76 percent for small companies). Profit expectations for area businesses are likewise robust. Seventy-five percent of those surveyed see profit level improvements in 2018, four points higher than at the opening of 2017. Currently, only 8 percent see profit declines, while 18 percent expect no change. Manufacturers (79 percent) and large employers (79 percent) are most likely to predict 2018 profit gains. Regarding capital spending plans, 53 percent forecast a rise in capital expenditures for the year. Eleven percent see capital spending declines and 37 percent expect no change. The percentage pre-

MMAC members expecting profit growth

dicting increases is up from the 42 percent that opened 2017 expecting capital spending gains. About 56 percent of large employers predict increases in capital expenditures in 2018, versus 49 percent among small employers. A lackluster metro area job trend was evident throughout 2017. Small year-over-year job declines posted in 2017’s first half were offset by small increases in its second half. Overall, on average, metro area nonfarm employment is likely to finish 2017 flat. Nonetheless, survey results suggest confidence in future job increases, with 69 percent of businesses expecting gains in their local workforces in 2018, outnumbering those predicting declines (3 percent) by a large margin. Twenty-eight percent see no change. A majority of employers see job gains regardless of industry or size of employer. About 69 percent of manufacturers predict job increases during 2018, equaling the percentage for non-manufacturers. Seventy-one percent of small employers predict 2018 job gains (versus 67 percent for large employers). Tighter unemployment rates may help explain an upward trend in forecast wage and salary levels. The average change in per-person employee wages and salaries is forecast to rise 3.3 percent over the next 12 months, equaling the increase projected three months ago. The current increase marks the second consecutive time and only the third time in the economic recovery period in which wage and salary expectations have matched or exceeded 3 percent. Consumer price inflation has risen nationally in recent months from a 1.6 percent year-overyear increase in June 2017 to November’s 2.2 percent increase. Area businesses expect inflationary pressure to remain moderate. More than half (52 percent) of all companies surveyed see 2018 inflation rates falling in the 3 to 5 percent range, while the largest remaining percentage (40 percent) expect price increases of 0 to 2 percent. Eight percent foresee inflation of 6 percent or higher.

FIRST QUARTER EXPECTATIONS

PERCENT

Businesses are more tempered in their optimism toward 2018’s first quarter. Sixty-nine percent of those surveyed expect first-quarter real sales gains (versus 2017’s first quarter), lower than the 80 percent that predict sales increases for 2018 as a whole. Nonetheless, only 5 percent see first-quarter sales declines, and 26 percent expect no change. First-quarter profit expectations are particularly high. Sixty-seven percent see higher profits for the quarter (versus 2017’s first quarter), while only 7 percent predict profit declines. Twenty-six percent YEAR

. . . . . . . . . . . . . . . . . . . . . . . . MMAC continued on page 29 biztimes.com / 27

Special Report ECONOMIC TRENDS

Newcomers among top local stocks

Milwaukee-area Stock Performance

By Andrew Weiland, staff writer

TWO MANUFACTURING FIRMS that moved their corporate headquarters to Milwaukee within the past four years went public in 2017, and their stocks were some of the top local gainers for the year. Gardner Denver Holdings Inc. had its initial public offering in May, at $20 a share, and its stock price rose 70 percent by the end of the year to finish at $33.93. REV Group Inc. had its IPO in January at $22 a share, and the stock rose 48 percent in 2017 to finish at $32.53. Stock market investors enjoyed healthy gains in 2017. The Dow Jones Industrial Average rose 25 percent, the Nasdaq rose 28 percent and the S&P 500 rose 19 percent in 2017. There was little stock market volatility during the year as a healthy economy and strong corporate earnings helped drive share prices upward, said Katherine Schoen, manager of private wealth management equity and fixed income research for Milwaukee-based Robert W. Baird & Co. Inc. Pro-business deregulatory polices from President Donald Trump also boosted investor sentiment during the year, she said. “It was a strong year for the market,” Schoen said. The technology sector led the market, she said. The metro Milwaukee area lacks a large tech exposure, so that limited the area’s opportunity to outperform the market in 2017. Still, stock prices for companies based in southeastern Wisconsin largely followed the gains enjoyed by the market as a whole. By a two-to-one margin, local gainers outnumbered local decliners. Gardner Denver and REV Group were two of the four best local stocks in 2017. Gardner Denver was the second-biggest local gainer, topped only by Racine-based Twin Disc Inc., which saw its stock price rise 82 percent in 2017 to $26.57. In 2017, Twin Disc bounced back from tough years in 2015 and 2016, Schoen said. The company reported a net loss of $6.1 million in 2017, but that was an improvement from a net loss of $13 million in 2016. Twin Disc reported fourth quarter profit of $1.2 million, compared to a loss of $5.5 million in the fourth quarter of 2016. The company’s operating income for the fourth quarter was $2.4 million, compared to an operating loss of $9.8 million in the fourth quarter of 2016. Twin Disc began a series of restructuring moves in late 2015 that continued in 2016 and 2017, including the closure of a plant in India. The 28 / BizTimes Milwaukee JANUARY 22, 2018

Ticker

Company name

TWIN

Twin Disc Inc.

GDI

Gardner Denver Holdings Inc.

12/31/2016 12/31/2017 Price Price

14.60

% Change

26.57

82% 70%

20*

33.93

JOUT

Johnson Outdoors Inc.

39.69

62.09

56%

REVG

REV Group Inc.

22**

32.53

48%

ROK

Rockwell Automation Inc.

134.40

196.35

46%

MAN

ManpowerGroup Inc.

88.87

126.11

42%

MTG

MGIC Investment Corp.

10.19

14.11

38%

MOD

Modine Manufacturing Co.

14.90

20.20

36%

KOSS

Koss Corp.

2.28

3.09

36%

RXN

33%

Rexnord Corp.

19.59

26.02

APAM

Artisan Partners Asset Management Inc.

29.75

39.50

33%

JASN

Jason Industries Inc.

1.80

2.37

32%

AOS

A. O. Smith Corp.

47.35

61.28

29%

BMI

Badger Meter Inc.

36.95

47.80

29%

FISV

Fiserv Inc.

106.28

131.13

23%

GNRC

Generac Holdings Inc.

40.74

49.52

22%

BGG

Briggs & Stratton Corp.

22.26

25.37

14%

WEC

WEC Energy Group Inc.

58.65

66.43

13%

9.45

10.65

13% 12%

BKMU

Bank Mutual Corp.

PLOW

Douglas Dynamics Inc.

33.65

37.80

WBB

Westbury Bancorp Inc.

20.70

23.00

11%

KSS

Kohl’s Corp.

49.38

54.23

10%

STRT

Strattec Security Corp.

40.30

43.55

ASB

Associated Banc-Corp

24.70

25.40

SNA

Snap-on Inc.

171.27

174.30

BRC

Brady Corp.

37.55

37.90

ATU

Actuant Corp.

25.95

25.30

-3%

WEYS

Weyco Group Inc.

31.30

29.72

-5%

DOC

Physicians Realty Trust

18.96

17.99

-5%

SXT

Sensient Technologies Corp.

78.58

73.15

-7%

Waterstone Financial Inc.

18.40

17.05

-7%

WSBF JCI

Johnson Controls Inc.

41.19

38.11

-7%

HOG

Harley-Davidson Inc.

58.34

50.88

-13%

MCS

Marcus Corp.

31.50

27.35

-13%

Quad/Graphics Inc.

26.88

22.60

-16%

RRTS

Roadrunner Transportation Systems Inc.

10.39

7.71

-26% -45%

QUAD ESNC

EnSync Inc.

0.72

0.40

BONT

The Bon-Ton Stores Inc.

1.47

0.34

-77%

CNXR

Connecture Inc.

1.68

0.16

-90%

*GDI IPO-ed on 5/12/17 at a price of $20. **REVG IPO-ed on 1/27/17 at a price of $22. All data taken from Factset Research Systems. This information has been obtained from sources we consider to be reliable, but we cannot guarantee the accuracy.

moves are expected to save the company $4.5 million a year. The third-best local stock in 2017 was from another Racine-based company, Johnson Outdoors Inc., which saw its stock rise 56 percent on the year to finish at $62.09. The company’s revenue was up 13.1 percent to $490.6 million and its net income was up 160 percent to $35.2 million in 2017. The fifth-best local stock, just behind REV Group, was Milwaukee-based Rockwell Automation Inc., up 46 percent to close 2017 at $196.35. Near the end of the year, the company declined three takeover overtures from St. Louis-based Emerson Electric Co., the highest a $29 billion, $225-a-share bid. “It’s never a bad thing when you have a takeover offer at a price higher than your current per-share price,” Schoen said. ManpowerGroup Inc. stock rose 42 percent in 2017 to close the year at $126.11. The Milwaukee-based company benefitted from significant economic improvement in Europe, where 64 percent of its revenue comes from, Schoen said. On the other end of the local stock spec-

trum, Connecture Inc. was the biggest decliner in 2017. Its stock price fell 90 percent, to 16 cents a share. The Brookfield-based firm recently announced it will be acquired by San Francisco-based private equity firm Francisco Partners. A health insurance marketplace software developer, Connecture’s stock was delisted from the Nasdaq market in November. The Bon-Ton Stores Inc., the Milwaukee and York, Pennsylvania-based parent company of Boston Store, continued to struggle in 2017 and its stock price fell 77 percent to close the year at 34 cents per share. Like Connecture, Bon-Ton’s stock was delisted from the Nasdaq and is now traded over the counter. Another big local decliner in 2017 was Roadrunner Transportation Systems Inc., which saw its stock fall 26 percent to $7.71 at the end of the year. Early in the year, the company announced the discovery of severe accounting errors. It terminated chief financial officer Peter Armbruster and removed chief executive officer Mark DiBlasi from his role. Roadrunner also shifted its corporate headquarters from Cudahy to Downers Grove, Illinois. n

MMAC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .from page 27

see no change. The percentage expecting profit increases is the highest since 2015’s second quarter. Just more than half of all businesses surveyed predict first-quarter job gains for their local operations (versus 2017’s first quarter), while only 4 percent see job declines – the smallest number expecting declines since 2015’s first quarter. Manufacturers expressed a higher degree of confidence toward first-quarter employment gains than non-manufacturers. Fifty-five percent of manufacturers see employment increases in the first quarter of 2018 (versus 2017’s first quarter) versus 49 percent among non-manufacturers surveyed. A similar differential was registered between larger employers (54 percent predict first-quarter job gains) and smaller employers (48 percent see such gains). The Business Outlook Survey, conducted by the MMAC, included 112 Milwaukee-area firms, both large and small, employing more than 35,900 people. n BRET MAYBORNE is the economic research director for the Metropolitan Milwaukee Association of Commerce.

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Special Report ECONOMIC TRENDS

Strong 2018 for Wisconsin banks… if elected officials cooperate By Rose Oswald Poels, for BizTimes

THE BANKING INDUSTRY continues to be a central player in driving economic growth across the state. Through the third quarter of 2017, Wisconsin’s 212 headquartered financial institutions held more than $80 billion in net loans and leases, an improvement of more than 5 percent from the prior year. This steady, continued growth in the industry’s loan portfolio, coupled with a similar steady decline in noncurrent loans and leases, is evidence to support the fact that Wisconsin’s economy is healthy and growing. Nearly 99 percent of Wisconsin’s headquartered financial institutions are profitable as of the third quarter of 2017, and nearly 64 percent of these same institutions saw earnings gains. Lending by Wisconsin-headquartered financial institutions is up year-over-year in almost all categories, according to third quarter 2017 numbers released by the Federal Deposit Insurance Corp. Total deposits at these same financial institutions is also up from the prior year, to a total of nearly $88 billion. Financial institutions continue to be trusted by consumers to protect their hard-earned money, which is evidenced by the 30 / BizTimes Milwaukee JANUARY 22, 2018

continued growth in total deposits. Given the health of our state’s economy and the attraction of new businesses to our state, I expect these trends to continue at a steady pace in 2018. OSWALD POELS Average net interest margin, which is a key measure of bank profitability, continued to hold steady in the third quarter of 2017 at 3.46 percent for Wisconsin-headquartered financial institutions, higher than the national average of 3.30 percent. I expect there to be continued steady interest rate hikes by the Federal Reserve under incoming chairman Jerome Powell in 2018, as his philosophy related to interest rate hikes is similar to that of current Fed chair Janet Yellen. As interest rates continue to rise, this presents challenges for Wisconsin’s financial institutions, as their core funding costs will continue to rise against a larger portfolio of long-term assets. As of the third quarter of 2017, the cost of funding earning assets grew

to 0.5 percent, while the long-term assets (5-plus years) on the books of these financial institutions increased nearly 7 percent from the prior year. In addition, traditional financial institutions face growing competition from unregulated online lenders, tax-advantaged institutions and certain fintech companies. Merger and acquisition activity among Wisconsin’s financial institutions continues, and I expect the pace to increase in 2018 compared to 2017. The number of headquartered financial institutions in Wisconsin fell in the third quarter of 2017 from the prior year by 6.6 percent, from 227 to 212. This was largely due to the heavy pace of M&A activity that was announced in calendar year 2016. At that time, heavy regulatory burden and rising technology and compliance costs, coupled with succession issues and general fatigue among bankers, contributed to the pace of M&A activity. In 2018, I am hopeful that we will begin to realize the benefits of easing the regulatory burden, as well as tax relief, with the passage of prudent reforms in Congress. These actions will help contribute positively to the earnings of financial institutions, which may help drive stronger M&A activity. In addition, those institutions with very strong core deposits will become increasingly attractive to institutions that don’t have high core deposits as a way to satisfy funding needs. I expect M&A activity in 2018 to affect close to 10 percent of our state’s financial institutions. Our financial institutions power Wisconsin for the betterment of individuals, businesses and communities. Financial institutions uniquely help local communities grow and thrive through the loans they make to, and the trusted wealth management advice they share with, individuals and businesses. In addition, the banking industry contributes significant financial and human resources to countless local causes and charities. It is in the interest of our entire state to support state and federal legislative policies that keep diverse financial institutions healthy and operating in Wisconsin. Meaningful regulatory and tax reform are two key legislative agenda items that must be passed at the state as well as the federal level to help our industry. With the continued strong economy moving into the new year, and the assumption that legislation starts to ease regulatory and tax burdens, I expect financial institutions to have another successful year in 2018. n ROSE OSWALD POELS is president and chief executive officer of the Wisconsin Bankers Association, which represents nearly 250 commercial banks and savings institutions.

With your help, this year we raised

1,157,669

for 31 children’s charities in southeastern Wisconsin. Learn more at paysbig.com/heart.

Special Report ECONOMIC TRENDS

Capital continues to seek acquisitions in Milwaukee By Molly Dill, staff writer

SOUTHEASTERN WISCONSIN merger and acquisition activity has been robust for several years, helped along by increased business confidence and high valuations. And there’s no sign those factors will change anytime soon. That follows the national data, which has pointed to higher than average M&A activity and sky high valuations of late. According to a report from Deloitte on 2018 U.S. M&A trends that surveyed 1,000 U.S. headquartered corporation executives and private equity firms in September, 68 percent of executives and 76 percent of private equity firm leaders expect deal flow to increase in the next 12 months. And 63 percent of respondents said deal size would increase, while 34 percent said it would stay the same. “Everyone seems to be reasonably busy,” said Paul Stewart, co-owner of Milwaukee private equity firm PS Capital Partners LLC. “The caveat is that STEWART valuations are still remaining robust in terms of the value of companies and the pricing in the marketplace.” That’s a challenge for buyers like PS Capital, but a boon to business owners seeking to sell. There are still more buyers than sellers, which means hungry buyers are competing for relatively few deals, driving up the valuations of 32 / BizTimes Milwaukee JANUARY 22, 2018

the companies that are for sale. There have been more buyers than sellers for about three years, driven in part by the large amount of capital chasing deals, particularly by private equity firms, and companies seeking growth in a modestly growing U.S. economy, said Robert Jansen, managing director at Milwaukee investment bank Bridgewood Advisors Inc. “Much of the M&A activity in recent years has actually been driven by proactively generated deals, which means approaching companies that aren’t being represented JANSEN for sale yet,” Jansen said. “Our advice for the business owners we meet with… is to go through that exercise of planning for that preemptive offer.” Despite expectations that a wave of baby boomers would begin to sell their businesses and retire over the past five years, the big wave of sales from that generation still has not come through in the Milwaukee market, Stewart said. One factor that may be delaying boomers who are in their 70s is people are living longer and retiring later, Stewart said. “The other item that I think has been pushing it out is the economy has been steadily going in a positive direction for a few years now and it is

getting better,” he said. “As a result, the ability of a company to make money is a lot more predictable or comfortable.” Steven Peterson, managing director at private equity firm Brass Ring Capital in Milwaukee, said he’s just starting to see baby boomers come to market. “It’s been a sellers’ market for a while and it just seems like it’s more and more every year,” Peterson said. “At some point, PETERSON that’s got to change. Life stage considerations are driving a lot of people more and more.” “Business owners that maybe didn’t sell during the downturn needed to wait to build their EBITDA back up and for the buyer population to get there again now is perhaps reaching the point where they need a succession plan for their business,” Jansen said. Valuations nationally are as high as 15 times EBITDA, Peterson said. Locally, it’s about five to seven times EBITDA. Stewart has seen valuations well above five times EBITDA over the past couple of years, he said. Of course, each deal is different and valuations vary widely, depending on factors like the industry, size of the transaction, how the business is marketed and how aggressive the buyer wants to get, Jansen said. And since buying a company comes at a premium, buyers are even more discerning about what makes a good buy, Stewart said. Customer, geographic and product concentrations are factoring in heavily. Some companies seeking acquisitions are even starting to take a more global view as they seek growth, Jansen said. He’s approached companies in Africa, South America and Europe as targets for three of his clients. PS Capital Partners’ eight portfolio companies, which span eight different industry segments, all either met or exceeded their plans for 2017, and the plans for 2018 are all greater than they were in 2017, Stewart said. Brass Ring’s five portfolio companies also had a great year and expect an even better 2018, Peterson said. Buyers and sellers are also carefully evaluating the impact of factors such as the federal tax reform bill, though it’s not entirely clear yet how it may impact them. Looking ahead, all three experts agreed there are no obvious impediments to the continuation of the frothy M&A market, save for a major global event. “It’s hard to foresee any particular thing driving the markets down at this point,” Peterson said. n

ARTHUR THOMAS

Foxconn will continue to make news in 2018 By Arthur Thomas, staff writer

FOXCONN TECHNOLOGY GROUP dominated local business news headlines in the second half of 2017 and every indication is the company will continue to make waves this year, but the focus will turn to the progress of construction and the potential political ramifications in the state. Businesses in southeastern Wisconsin will also potentially begin to see the impact of the massive project, both in opportunities for construction firms and suppliers, and in creating an even tighter labor market. Foxconn’s plans call for a groundbreaking sometime this spring. The company hopes to build a more than 1.5 million-square-foot assembly facility on the eastern end of its Mount Pleasant site and have it operational by next year. The first facility would allow the company to ramp up assembly of televisions and other products even as the rest of its LCD plant is built up. Before construction gets going, the village and county have to acquire the land that will become Foxconn’s Wisconsin home. In late December, one week after an established deadline, Foxconn put $60 million in an escrow account to fund land acquisition, prompting the village and county to exercise options on 1,400 acres of land in the project area. Those deals are expected to close in early February. Even before those deals go through, work is already beginning on the infrastructure projects that will support the Foxconn plant. Black River Fallsbased Hoffmann Construction Co. was awarded a

$12.7 million contract to rebuild part of the frontage road and began work in early January. Green Bay-based Advance Construction Inc. and Pleasant Prairie-based DK Contractors Inc. have also begun work on two water main projects in the area. There’s nearly $160 million in water and sewer infrastructure work planned and another $134 million in local road projects to support Foxconn’s campus. A lawsuit filed in early January by a group of property owners near roads targeted for upgrades could potentially cause issues for the work, depending on how long the court fight drags on. Crews may be moving dirt, but there are other approvals portions of the project will need before Foxconn’s grand vision can become reality. Waukesha-based American Transmission Co. LLC is asking the state Public Service Commission to sign off on $140 million in power line upgrades between Racine and Pleasant Prairie, including a new substation near the Foxconn plant. The City of Racine will be seeking approval to divert Lake Michigan water to the Foxconn plant, which will be just outside the Great Lakes basin. The state Department of Natural Resources will need to approve the diversion, which could also include the town of Yorkville to the west of I-94. The state Department of Transportation is also waiting to find out if it will receive $246.2 million in federal grant funding it applied for to help with the expansion of I-94. The state has to receive some federal funding to be able to use $252.4 million in

Foxconn’s Terry Gou at the contract signing at SC Johnson’s headquarters in Racine.

bonding authorized in the Foxconn legislation. The department’s website shows the I-94 project getting started as early as the spring, but the schedule is dependent on the money being available. As the pieces come together to clear the way for the Foxconn project, the company has already pressed ahead with hiring, posting positions to online job boards and holding recruitment events at universities. The company is also leasing space at an industrial building in Mount Pleasant to begin TV assembly operations. The leased facility and the first assembly building are a key part of the first few years of Foxconn’s project. The company told the Wisconsin Economic Development Corp. it plans on $233 million in revenue this year and $3.33 billion through the end of 2020 from its Wisconsin operations. Over that same period, the company’s employment needs to reach 5,200 to receive the maximum tax credits, including 1,040 by the end of this year. Statewide unemployment is approaching record-low levels and even though the City of Racine has the highest unemployment rate among Wisconsin’s largest cities, at 4.1 percent in November, it is in healthy territory. A tight labor market has employers scrambling to find workers, which some have said has limited job growth. Racine County alone hasn’t added a net of more than 1,000 private sector jobs in a 12-month period since the end of 2014. Foxconn ramping up employment will only increase pressure on the workforce. And while many business leaders have said they expect Foxconn to benefit the state, many have also expressed concern about what it will mean for finding workers. Groups that include Milwaukee 7, higher education and workforce development boards have started working on filling the pipeline, but it remains to be seen how successful they will be and how quickly their work can be done. Another area of uncertainty is on the political front, where what seemed like a winning issue for Gov. Scott Walker is now a much murkier picture as he begins his re-election campaign. Two polls completed in October by Marquette University Law School and North Carolina-based Public Policy Polling showed voters are split on whether the state is paying too much for the project and what Walker’s motivations were for striking a deal. Democrats running for governor haven’t shied away from criticizing the state’s $3 billion subsidy for the project, and Walker has said other Foxconn projects that didn’t materialize were the result of political changes. Regardless of the progress made in building the Foxconn campus, the project will likely play a central role in the campaign. n biztimes.com / 33

Special Report ECONOMIC TRENDS Construction of the new arena in downtown Milwaukee will be completed this year.

OFFICE

Bucks arena, streetcar to open in 2018 By Corrinne Hess, staff writer

IN LATE NOVEMBER, work on the Milwaukee Bucks arena shifted indoors. And while passersby can no longer see what is happening, the $524 million project continues to hit milestones as crews prepare for a September opening. Construction of the main scoreboard structure is underway and work on the ice rink has started, with an expected completion date of March. From now through May, 750 seats will be installed per week. The basketball floor will be installed in summer and the project should be substantially completed by August. By the time it is unveiled to the public, 800 pieces of art will be hung or placed on the walls of the 714,000-square-foot, state-of-the-art facility. “For us, it is about continuing the momentum,” said Bucks president Peter Feigin. “We are literally now only six months away. We have a building to get open.” The arena isn’t the only big civic project in Milwaukee that is nearing completion. Since April, track installation on the initial route of the Milwaukee Streetcar has meant lane closures in parts of downtown Milwaukee and the Historic Third Ward. Now, 90 percent of the track is complete on the initial route. The first streetcar is on track to be operational this fall. One of the eventual stops on the streetcar will be The Couture, a $122 million, 44-story tower that will include 302 luxury apartments and about 50,000 square feet of retail space. The project, which will be located at the for34 / BizTimes Milwaukee JANUARY 22, 2018

mer Downtown Transit Center, was expected to break ground in spring 2017, but has been delayed. It is now expected to break ground in the first quarter of 2018. Northwestern Mutual Life Insurance Co. opened its $450 million, 1 million-square-foot Tower and Commons office building in August. This year, the company will open a $100 million, 34-story parking and residential tower at 777 N. Van Buren St., which will be called 7Seventy7. Milwaukee developer Joshua Jeffers had a busy 2017, with several projects expected to move forward in 2018. Those projects include a seven-story, mixed-use building adjacent to the historic Mackie and Button Block buildings, to be called Broadway Connection. He is also working on a $30 million project with Tony Janowiec, one of the owners of the Shops of Grand Avenue, to redevelop the Milwaukee Athletic Club building downtown. Jeffers purchased the 20-story 633 Building in downtown Milwaukee in 2017. He is planning to redevelop the building’s former Greyhound Bus Terminal, a 48,000-square-foot commercial space located on the southern side of the first floor. In addition, The City of Milwaukee recently took ownership of the former Northridge Mall Boston Store building on Milwaukee’s far northwest side for future redevelopment. Over the next year, expect the city to move forward with long-awaited plans to redevelop the former 153,000-square-foot department store, parking lot and ring road surrounding the store.

In November, Irgens Partners LLC began construction on the 25-story BMO Tower, a downtown office building that will be home to BMO Harris Bank’s Wisconsin headquarters and Milwaukee law firm Michael Best & Friedrich LLP. The $132.6 million project will not be complete until 2019, but with the demolition of BMO Harris Bank’s seven-level parking structure at 770 N. Water St. to make space for the tower this month and ongoing construction, the project will be a main focal point of downtown throughout the year. Brookfield-based Hammes Co. LLC will complete phase one of its five-story office building at the northeast corner of Knapp and Water Streets in downtown Milwaukee this year. The real estate development company is planning to move about 80 employees to the building. Three possible projects to watch for in 2018: • The Marcus Corp.’s Edison Place, a 20-story, mixed-use development in the Park East Corridor that has been in the works for more than a year. Early renderings showed an eight-screen movie theater, 162,000 square feet of residential space and 113,800 square feet of office, although the company has not yet moved forward with plans. • Mandel Group Inc. announced plans in late 2016 for a three-building, 275,000-square-foot office development along the Milwaukee River in the city’s Walker’s Point neighborhood, which has not yet broken ground. • A city panel approved a request by HKS Holdings LLC to build a 24-story tower along the Milwaukee River just north of downtown, but the developer isn’t saying what the development will include. In May, a city panel approved a height variance waiver for the building, which would be north of Bader Rutter’s new headquarters at 1433 N. Water St. When Kyle Strigenz, co-owner of HKS Holdings, was asked why the building is planned for 24 stories, he said the height “fits with what we already have planned out.” When asked to elaborate, Strigenz said he could not do so at this time. HKS has 36 months until the waiver expires.

RETAIL Brick-and-mortar retail has changed dra-

matically in recent years, and perhaps no one is more aware of that than the owners of suburban shopping malls. With the closure of all local Sears Holdings Corp. department stores and the uncertainty of Boston Store parent The Bon-Ton Stores Inc., Milwaukee-area malls and municipal leaders will be looking at the future and how these massive property tax generators can survive. Southridge Mall in Greendale lost Sears over the summer and Kohl’s will move out of the mall to the 84South development in Greenfield this year. The mall’s remaining anchors, Macy’s, JCPenney and Boston Store, have all struggled and have been closing stores. Macy’s Inc. and JCPenney Co. Inc. are both closing more than 100 stores in 2017. The Bon-Ton Stores Inc., which has dual headquarters in Milwaukee and York, Pennsylvania, has not turned an annual profit since 2010 and plans to close 40 stores in 2018. Boston Store occupies 103,837 square feet at Southridge. In December, Bayshore Town Center in Glendale was acquired by an affiliate of New Yorkbased AIG Global Real Estate Services in a deed

in lieu of foreclosure transfer. The 38.4-acre parcel, which includes the retail mall, apartments and office tenants, underwent two management changes in 2017 and several discussions about redevelopment plans on the north end of the mall, including adding a Nordstrom Rack at the recently demolished former Sears store site. Sears Holdings announced in January it would close the last remaining Sears department store in southeast Wisconsin at Brookfield Square Mall. Brookfield officials and mall owner Chattanooga, Tennessee-based CBL & Associates Properties Inc. have been planning ahead for the anticipated closure. Marcus Theatres will open a 40,000-square-foot BistroPlex at the site, and a two-level, 45,000-square-foot Whirlyball entertainment and restaurant venue is planned.

HOTELS The City of Brookfield is also planning to redevelop nine acres including the former Sears Auto Center at Brookfield Square Mall into a 170-room hotel and connected conference center. The hotel is one of three planned in Brook-

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field and several in the works in the Milwaukee area. Burlington, Iowa-based Hawkeye Hotels purchased 5 acres of land in The Corridor development along I-94 in Brookfield. The company is planning to build a Holiday Inn Express & Suites and a Fairfield Inn & Suites by Marriott in the middle of the 66-acre Irgens development. Moving east, HKS Holdings is developing a 120-room SpringHill Suites by Marriott hotel at Milwaukee County Research Park in Wauwatosa. Potawatomi Hotel & Casino in Milwaukee’s Menomonee Valley broke ground in December on a second hotel tower, a 19-story addition that will expand the property by 180,000 square feet. The $80 million project will be complete in spring 2019. In downtown Milwaukee, hotel projects include a 150-room, six-story Hyatt Place hotel under construction at The Brewery complex and a 200-room Drury Hotel at the First Financial Centre, 700 N. Water St. In addition, Ascendant Holdings plans to convert the Humphrey Scottish Rite Masonic Center building into a 220room hotel. n

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Special Report ECONOMIC TRENDS A bungalow for sale in Milwaukee’s Bay View neighborhood.

Lack of inventory will continue in 2018 By Corrinne Hess, staff writer

MIKE RUZICKA, president of the Greater Milwaukee Association of Realtors, has a spreadsheet in his office dating back to 2007 recording the number of new home sales and listings in southeastern Wisconsin. Activity slumped during the Great Recession. But from 2013 through mid-2015, homeowners were actively buying and selling real estate across the region. But by mid-2015, the listings column began to drop again. It has never rebounded. However, more homes in southeastern Wisconsin were sold in 2017 than in 2016, despite the paltry increase in new single family home listings throughout the year. In 2017, there were 21,357 homes sold, the highest annual total since 2005, when there were 21,642 homes sold in the metro area. The trend of low inventory and less listings is likely to continue in 2018 as homeowners who are uncertain about how long the economic expansion will continue and how the federal tax law could affect them choose to hang on to their properties, Ruzicka said. Housing inventory (the time it would take to sell all of the homes on the market at a given time) has hovered around the three- to fourmonth mark recently. Six months of inventory is generally regarded as a “balanced market,” in which sellers and buyers are evenly matched. Low inventory levels favor sellers. A recent study by RE/MAX LLC shows the average sales price in the southeastern Wiscon36 / BizTimes Milwaukee JANUARY 22, 2018

sin region, which includes the Milwaukee 7 counties and Sheboygan, increased 6 percent in 2017, to $221,933. The average number of days on the market decreased 6 percent, from 84 days in 2016 to 68 days in 2017. “Prices will continue to rise in 2018 as the competition for fewer homes heats up,” the RE/ MAX study found. “Local real estate experts expect the frenzy to intensify as more buyers, particularly first-timers, enter the market this year.” The federal Tax Cuts and Jobs Act signed into law by President Trump three days before Christmas is expected to have an effect on the housing market. But how much so? Ruzicka said experts still are unclear what the full implication will be. “For years, the federal government allowed for things like deducting your mortgage interest because of the belief that homeownership led to a more stable environment,” Ruzicka said. “That has been upended.” The new law includes a mortgage interest deduction provision. If someone buys a home between Dec. 14, 2017 and 2026, he or she can deduct the interest up to $750,000 in mortgage debt used to purchase or improve it as an itemized deduction. Anyone who purchased a home before then can deduct interest up to $1 million. Under the old law, all property taxes paid to state and local governments could be claimed as an itemized deduction. It was also possible to deduct state and local income or sales taxes. The new law

bundles all of these so-called “SALT” taxes and limits the deduction to $10,000 for both individuals and married couples. Ruzicka said the changes put homeowners in uncharted territory. “When they put the (Tax Reform Act of 1986) together, it took a year,” Ruzicka said. “This was put together in a couple of months. I think it’s dangerous to roll the dice and make so many wholesale changes.” If renting becomes a more attractive prospect for some, empty nesters who had once considered downsizing to a smaller home might now choose from the wide array of luxury apartments in the region. This could open up the market for older millennials wanting to buy homes. “In our market, the school districts drive the decisions, and of course cost is a significant factor,” Ruzicka said. Often, young couples begin looking in municipalities and discover they can’t afford the houses they want or there are not enough homes. They get frustrated after an exhaustive search and decide to wait another year or two before trying again, Ruzicka said. “The good thing about the pre-recession (period) was housing was easy,” Ruzicka said. “Everyone bought and everything appreciated. Now, there are so many facets to take into consideration. The good thing is the values are (now) stable. They are not going up as much, but a house is someplace where you should not lose money.” Ruzicka believes in the coming year, all of the M7 counties will be desirable places for people to live. What is needed, however, are more homes. “Waukesha, Ozaukee and Washington counties have good school districts with low unemployment and Racine, Kenosha and southern Milwaukee counties will have a lot more people interested if Foxconn comes to full fruition,” Ruzicka said. Because of Milwaukee’s specific challenges – Milwaukee Public Schools, the large number of people living in poverty and crime (whether real or perceived) – there are sometimes issues selling homes in certain areas of the city. But Ruzicka said certain neighborhoods in Milwaukee are thriving, including the East Side, downtown and Bay View. “There should be an increase in economic optimism and home sales with the current economic expansion, low unemployment and low mortgage rates. But, while overall demand is high, it is not translating to sales,” Ruzicka said. “Many firsttime buyers see few options within their budget and home prices that are rising much faster than their incomes. We desperately need an increase in new and existing inventory.” n

Cryptocurrency fever is high…but investment experts advise caution By Molly Dill, staff writer

CRYPTOCURRENCIES LIKE BITCOIN are a hot topic these days, there’s no doubt about it. The currency once (and sometimes still) pooh-poohed as a harebrained scheme has now gained some respect after its price, which started 2017 at $900, shot up to more than $19,000 in December. What is cryptocurrency, exactly? It’s a digital currency built on blockchain, a data structure used to create a digital transaction ledger that’s shared among a distributed network of computers. Among the types of cryptocurrency are Bitcoin, Ethereum and Litecoin, but many others have been created. There are no hard assets, central banks or governments behind the currency, which its proponents argue makes it more secure. But the currency is highly volatile and has also been linked to back alley deals and hacker ransoms because of its anonymous nature. Thinking about jumping on the bandwagon? Not so fast. A number of industry experts have cautioned investors to be careful about such a speculative investment. Several wealth management professionals contacted by BizTimes Milwaukee did not feel comfortable commenting

on cryptocurrency because of its complexity and risky nature. “No one is an expert at this,” said Michael Antonelli managing director and equity sales trader at Milwaukee-based Robert W. Baird & Co. Inc. “There literally isn’t anyone. It’s such a new thing to the world. Me, like every other person in the world, is kind of looking at Bitcoin and saying, ‘What is going on over here?’” Antonelli described cryptocurrencies not as an investment, but as something like baseball cards or wine. “People collected baseball cards because people thought they would be worth more someday,” he said. “An investment is something, to me, that you’re going to put your money in and hope it grows. “It’s just a speculative instrument. Its value could be zero, its value could be $1 million. Almost nobody knows.” The two people involved in a cryptocurrency transaction decide its worth and the currency is impossible to value. For that reason, it may be something people put a small amount of money toward as a hobby, but shouldn’t be part of their

investment portfolio, he said. “They’re looking for something exciting because stocks have become really boring and volatility’s been zapped out of the world,” Antonelli said. “I don’t see crypto as being part of someone’s financial plan, ever. I know smart people that have taken…a small chunk of money and said, ‘I’m playing around in them because I’m bored or I want to try something different.’” In early January, the Wisconsin Department of Financial Institutions issued a warning to state residents about investing in cryptocurrencies. Among the concerns it laid out were the minimal regulatory oversight and lack of recourse if cryptocurrency is hacked; the fact that cryptocurrency is not insured by the FDIC; the highly volatile investments; the frequently unregulated companies involved in cryptocurrency, which may be more susceptible to fraud; and the fact that investors have to rely upon the strength of their own computer security systems and those of third parties to protect against theft. “We’re recommending (investors) use the same due diligence and judgment that they use (in typical investments), doing that in evaluating cryptocurrencies,” said Jim Podewils, deputy secretary at the DFI. “The volatility risk in the pricing is certainly one that comes to mind real quickly. We’ve seen wide swings in this vehicle… and that’s one risk.” An additional layer of risk, he said, is storing the currency once it’s been purchased. “There’s usually little or no recourse when a cryptocurrency is gone because one of the features is the anonymity that somebody has owning it,” Podewils said. Podewils said there are as many as 1,500 different cryptocurrencies, with more being created every day. Evaluating what each represents and the investment potential is important, he said. “Something that has high risk, a lot of volatility, probably you don’t want to put in any money that you can’t afford to lose,” he said. While the DFI does not track cryptocurrency usage in Wisconsin, it decided to warn investors because of the media attention and popularity the investments have gained. While a currency traded outside of the banking system could be seen as disruptive to the banking industry, which the DFI regulates, Podewils said it’s not a concern for the state’s financial institutions. “We have not seen any threat or impact on banking or credit unions in the state,” he said. “I just think it’s fun to watch because as a student of market history, we may look back on this and laugh or say, ‘Wow, that changed the world,’” Antonelli said. n biztimes.com / 37

Special Report ECONOMIC TRENDS

Keep your money riding on state’s economy in 2018 By Tom Still, for BizTimes

I MAY HOP THE NEXT PLANE TO LAS VEGAS to play the roulette tables. My winning streak of late could win me some money. In this space in 2017, I predicted the broadband logjam would be broken. The Information Technology and Innovation Foundation just ranked Wisconsin 11th among the 50 states in that category, a surprising jump. I also forecast that BigCos would invest in southeastern Wisconsin. Little did I know it wouldn’t be homegrown companies, but a little Taiwanese outfit called Foxconn. The 2016 forecast talked about the importance of wooing and keeping millennials, a topic that is currently all the rage. My crystal ball for 2015 laid out four tech goals for policymakers: enhancing Wisconsin’s startup and scale-up business climate, building the state’s supply of knowledge-based human capital, improving access to capital for Wisconsin entrepreneurs, and improving technology development, delivery and transfer from the lab bench to the marketplace. Check, check, check and check. I could quit while I’m ahead, which would be the smart Vegas thing to do, but I might as well double down on red 23 and let the wheel 38 / BizTimes Milwaukee JANUARY 22, 2018

spin again. 1. The incredibly shrinking stock market will continue to help small- to mid-sized private companies. Fewer companies are going public, which means more dollars are chasing fewer STILL deals on the New York Stock Exchange and the Nasdaq. Major companies are sitting on plenty of cash and some invest it by paying attention to smaller firms, especially those in the same industry space. That’s happening in Wisconsin, where corporate investors are adopting young tech companies to speed internal innovation. Big company executives no longer think “entrepreneur” is French for “unemployed dreamer.” 2. The Foxconn deal will look better as China gets stronger. Will the rest of the 21st century be the Next American Century… or will the world’s most populous nation use its huge trade imbalance, tech investments and buying power to make it the Chinese Century? States such as Wisconsin that invest in a strategic advantage, such as a $10 billion liquid crystal display facto-

ry, are prepared to move either way. 3. The I-Q Corridor will become more of a reality. That’s the name I coined years ago for the interstate corridor connecting the powerhouses of Chicago, Milwaukee and Madison with points north and west. Foxconn will anchor the southern link with its plant near Racine, and more companies are shortening the 85-mile link between Milwaukee and Madison. There was a time when the Milwaukee “old guard” looked on Madison with a mix of envy and disdain, but a younger crew in the state’s largest city doesn’t seem to carry those grudges. 4. Startup fever will spread in Wisconsin. To date, it’s been largely a function of the big two cities, but Wisconsin has always been a state of mid-sized cities. Progress will continue in places such as Janesville, Beloit, Eau Claire, Kenosha, Racine, La Crosse, Appleton and Green Bay as young companies and workers emerge. I’m packing light for that Vegas trip, where the roulette tables await, and I’m placing my 2018 bet on Wisconsin. n TOM STILL is president of the Wisconsin Technology Council, which includes the Wisconsin Innovation Network, the Wisconsin Angel Network and the annual Governor’s Business Plan Contest.

Special Report WORKFORCE DEVELOPMENT

Woman welder forges a career in the trades MATC instructor encourages others to consider her path By Arthur Thomas, staff writer DEB RICHARDS’ JOURNEY to become a steamfitter started at just four or five years old, when the “pretty blue light” from a man welding in front of her house caught her attention. Her mom lost track of her and she wandered out to the truck, looking at the light. The man, whom she would eventually come to call “Dad,” picked her up, put her on the back of the truck and gave her a task to help him out. When Richards’ mom found Deb, she gave her a scolding, but her future dad’s reaction showed less concern. “He just smiled and laughed and said, ‘Well, she’s going to be a welder someday,’” Richards said. Today, Richards is an instructional chair for

HVAC and refrigeration apprenticeships at Milwaukee Area Technical College and a journeyman steamfitter. She was once an apprentice working on the Bradley Center and now has students doing the same on the new Bucks arena. Some of the apprentices she’s teaching today are the sons of men with whom she did her training. “It’s like seeing your own kid in the classroom,” she said. “The only thing I regret is not seeing enough diversity.” It wasn’t a straight line from being a little girl on the back of a welding rig to journeyman steamfitter. At 18, her adoptive dad asked her what she planned to do and college was the answer. She wanted to go into natural resource management and environmental law but couldn’t find a job after graduation. When he suggested she take advantage of the apprenticeship offer she had before school, Richards opted for graduate school instead. Richards was nearly finished with grad school when she realized she wasn’t going to be able to make a living in the career she wanted. She changed course and applied for an apprenticeship.

Deb Richards with a third-year apprentice at MATC’s Oak Creek campus.

The pathway of four-year degree to apprenticeship is a common one for Richards’ students. Nearly all of the roughly dozen third-year apprentices she was teaching one morning in

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December had attended a fouryear school for some amount of time. But when Richards made the switch, her four-year degree was more of a liability. She was seen as someone who was more likely to go on to another position after receiving her training. “That’s evaporated,” she said. “Most people have realized that a four-year degree means that you had the perseverance to complete something but that doesn’t mean you were successful in getting that job. You’re focused; you’re striving to make yourself better.” The average age of apprenticeship registrants in Wisconsin last year was 28.4, and it has mostly trended down since reaching 30.2 in 2009, according to Wisconsin Department of Workforce Development data. At the same time, the average amount of schooling among active appren-

tices at the time of registration has trended up in recent years, from slightly less than a semester of college to slightly more than a semester. “I went to college, got a degree and hated my office job,” said Andy Haas, one of Richards’ thirdyear students. “I wasn’t making a lot of money; I heard about the apprenticeship program and was lucky enough to get in.” He said he spent the first year learning the tools of the trade and how to use them. “It seems like the more I do it the more I like it, the more I understand the systems and everything that’s going on,” Haas said. “Every system is different, so you learn something on every job.” Richards said it takes time for someone to develop skills in pipe welding and she pointed out with pride where apprentices had done work on MATC’s Oak Creek facility,

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40 / BizTimes Milwaukee JANUARY 22, 2018

where she teaches. “The steamfitter does the heart of the building,” she said. “If the piping goes it’s like having an artery blow.” Like Haas, many of the other students said they found their way to an apprenticeship by word of mouth. Maybe they had a friend in the trade or maybe their family worked in it. Some commented that it wasn’t something pushed in schools. “There’s no spotlight on the trades,” Richards said. “Unless you have family members that understand what the trades are, they have no spotlight.” She said when schools reduced their investment in shop classes, fewer students were interested in the trades and it contributed to her decision to go to a four-year school. “There’s a part of me every once in a while, I wish I would have went to the trade first, but I wouldn’t be here if I did. That fouryear degree got me my job here,” she said. Richards started by teaching welding to incarcerated individuals before moving on to teach Saturday classes and eventually taking a full-time position at MATC. She continued her own education and ended up with a master’s in education. “I’ve never not been in school; school is huge,” she said. “The trades teach you that.” Richards said the trades have also taught her that her skills are what can put her to work on a jobsite and, as a woman pursuing advanced types of welding – and doing them well – she can sometimes rub people the wrong way. “There are sides of this trade that aren’t so romantic. Things that people shouldn’t want to have to put up with,” she said. Especially in her early days, there were times at which heavy equipment made the job difficult, but she found a way to get the work done. “You work smarter, not harder,” Richards said, adding that she tries to pass that message on to her students. “In all honesty, women make

better welders than guys,” she said, noting it is primarily dexterity-based work. “When 52 percent of the population is female and you only have 1 percent in your industry, a resource is being underutilized … but yet we don’t go after female welders because there’s heavy pipe. It’s hot. It’s nasty. It’s dirty.” Richards said she could probably count on two hands the number of women she has taught out of the more than 600 who have learned from her over the years. There have been 34,795 apprentice registrants across all trades in Wisconsin since 2006 and 13 percent of those have been women, according to DWD. The highest percentage of women in any single year during that time was 20 percent in 2009. Since then, it has steadily trended downward to just 6 percent last year. While the group of thirdyear apprentices shared a lot in common with Richards – turning to the trades after an undergraduate degree, working on a brand new arena – there were no women in the class. She said attracting more women to apprenticeships could help foster an even more diverse workforce in the trades. “The way we can cultivate it is by changing where (students) meet this diversity,” she said, adding that apprentices know they will have her teaching them somewhere in their training. “Out in the field, they may never see a Deb for 20 years.” Richards said middle school would be the best time to talk to girls about potentially going into the trades. Some of the groundwork is already being laid, with Girl Scout groups coming in for badges and other days dedicated to helping students explore the trades at schools. “Is it clicking? I don’t know; we will see the end results shortly,” Richards said. “I’m not a person that likes to be out front … but it’s time, I’m at the end of my career, for people to start seeing there is nobody following behind me.” n

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Strategies COACHING

The four quarters of life Make adjustments at halftime Have you ever looked to another generation for inspiration on how to live your best life? It’s likely you’ve leaned on the wisdom of a parent, mentor or elderly friend from time to time. But did you ever think to reflect on the habits and interactions of a toddler, middle schooler or millennial? As the second youngest of 10 children, I’ve always been intrigued by life stages and human behavior, as I had firsthand experience observing the habits and interactions of a large family. I’ve spent decades researching how we make our way through the various chapters of life, and I like to compare how individuals progress through life to how people play one of my favorite sports – football. Over time, I came to a clear realization:

JUST LIKE ON THE FIELD…YOU CAN HAVE IT ALL, BUT NOT ALL AT ONCE. As we age, obtaining advice from younger generations can add tremendous value to life’s journey. I touch on this concept in my latest book, “After Further Review.” In this second part of my four-part series for BizTimes Milwaukee readers, I’ll dive into the four quarters of life and how we can find inspiration from other generations.

FIRST QUARTER: CHARGING OUT OF THE TUNNEL The start of the first quarter of a football game is exciting. Teams line up to charge out of 42 / BizTimes Milwaukee JANUARY 22, 2018

the tunnel onto the field with great focus, motivation and anticipation for what is about to take place. Sounds a lot like the early years of our life, doesn’t it? No matter what the odds are, both teams are confident that they’ll win. They are just excited to get out there and play. The first quarter of life is a time when our unbridled eagerness and healthy optimism enable us to believe we can do anything. This phase is about establishing your identity. When you come to the end of this quarter, you likely have a better understanding of who you are, how to take responsibility and what comes with that knowledge. Is it possible for older generations to learn from individuals in the first quarter of life? If you’re a member of an “older generation” you may be thinking that this is impossible… you are, in fact, older, wiser and more experienced. But the reality is older generations can learn a lot from those in the first quarter of life. Individuals in this stage (particularly millennials) tend to: 1. Embrace change Change is inevitable and people in the first quarter of life fight it less and embrace it more. Their ability to be resourceful and work through various circumstances contribute to a go-with-the-flow attitude that, in many situations, allows them to expand and grow. 2. Place a greater value on experiences than things Those who have grown up during times of economic uncertainty are more likely to adopt a simple lifestyle and value the acquisition of material things less. Research has shown that experiences are more fulfilling than buying things, and younger generations understand the value of prioritizing experiences that provide satisfaction and happiness in the long run. 3. Find balance The first quarter of life can present some of the biggest stressors, including career choices, marriage and having children. Nowadays, the career and life choices of this age group differ from the choices available to their parents. Work/life balance means something different

today. Employees are not looking to their employer for the answer but creating the balance themselves, perhaps by taking on freelance work or creating business opportunities that give them control over their time, rather than working a set number of hours each week. 4. Work smarter, not harder The fact that individuals currently in the first quarter of their lives place a high value on balance has also resulted in this generation becoming master multi-taskers. Their ability to thrive in fast-paced environments and use technology proficiently results in quick and efficient completion of tasks. 5. Take risks One of the most enviable traits of those in the first quarter of life may be their propensity to take risks. As we age, we understand that great achievements oftentimes take great risk. While those in the first quarter of life might have less on the line when they take risks, one key that anyone can walk away with is that failures offer an opportunity to grow and learn from past mistakes. COACHING...continued on page 48

JOE SWEENEY Joe Sweeney is a New York Times bestselling author of “Networking is a Contact Sport,” “Moving the Needle” and “After Further Review.” He is also a speaker, coach and trainer. He can be reached at joesweeney.com/contact.

LEADERSHIP

The leadership resolution Prepare for your own growth in the new year

do you ensure these will be repeated through the efforts of your team?” When considering challenges and shortfalls, “What might you do differently to ensure a more favorable result?” Reflecting on the need to replicate favorable results places emphasis on the leader’s role in developing and leading the team differently, while the focus on doing things differently engages a process for seeking innovations and ideation outside the “self.” The goal of this reflective process is not to complete a full post-mortem, but rather to uncover patterns that might contribute to improved performance.

ASSURE LEADERSHIP ALIGNMENT New year’s celebrations are influenced by traditions that typically recognize good fortune and call us to make peace with the trials, tribulations and shortcomings of the past year. The stroke of midnight ends the reflection and ushers in hope for health and prosperity for the journey ahead. While tradition influences the global celebration, the new year affords leaders time for personal reflection and resolution. During reflection, consider your current path and evaluate progress toward goals. Don’t get caught in the “blame game” or in remorse over what did or did not happen, but rather consider the controllable factors that might influence positive outcomes in the future. This awareness can have a significant impact on your planning and intentions to change manifested in personal resolutions. As we begin 2018, make this a time of reflection and planning. Doing so with a deliberate approach can contribute greatly to the success of your organization in the year ahead.

A TIME TO REFLECT The identification of our greatest opportunities often occurs as a result of personal reflection. As a leader, reflecting on your past year’s accomplishments and shortfalls can be particularly valuable when planning for the future. Consider the following questions when reflecting on your accomplishments as a leader, “How

Leaders do not choose to fail. In fact, people in leadership positions typically work to demonstrate their worthiness through achievement. While they often establish measures that support their perception of success, there can be significant disconnect among the expectations of the organization, those of the leader and those of the team. To ensure a path that leads to organizational success, alignment among stakeholders is critical and clarity of expectations is essential. Leaders must seek to understand the direction and goals of the organization, and then own the responsibility of communicating those expectations to their teams. There are several areas susceptible to failure in this step. The lack of a vision and an executable strategic plan stand out as the most obvious challenges to leaders. In fact, results from a recent needs assessment suggested that nearly 72 percent of representative organizations did not have an active strategic plan. This will significantly hinder a leader’s ability to achieve desired results. A second challenge, identified by mid-level leaders, included directives or goals that were thrust upon the leader that (1) did not appear aligned with the vision, (2) were not clear in terms of measures, timelines or other associated expectations, or (3) did not come with necessary resources to execute. Each of these presents a unique set of challenges to the leader responsible

for implementation. Regardless of the associated challenge, the leader’s role is to present a case that clearly articulates the barriers in executing the desired directives under the limiting conditions. The goal here is not to avoid implementation, but to advocate for success and seek alignment among vision, expectations and resources.

A FOCUS ON PERSONAL GROWTH There is no end point in leadership development. Just like the traditional new year’s resolution serves to guide a change in behavior, a leader must develop a professional development action plan to enhance the likelihood of success in the year ahead. The plan should be informed by the leader’s desire to enhance strengths, address gaps in knowledge and expertise that are required to lead and support others, and provide opportunities to grow skills necessary for future advancement. This step allows for the synthesis of information garnered through earlier reflective steps and the need to achieve alignment into actions that are owned and activated by the leader. When it comes to the year ahead, reflect on the path that led you here and make your leadership development a primary resolution for your journey in 2018. n

JOSEPH WEITZER Joseph Weitzer is managing partner and senior strategist of Soulful Leadership Consulting Network. For more information, visit soulfulleadership.net. biztimes.com / 43

Strategies

Tip Sheet Entering 2018 HR compliant

he new year is an opportune time to reflect on your company’s operations during the past year and start planning for the months ahead. This process should especially include a review of your company’s current human resources procedures in order to avoid non-compliance or misconduct lawsuits and penalties.

Jaime Lizotte, HR solutions manager at ComplyRight Inc., recently wrote an article for SCORE suggesting three simple ways business owners can self-audit to ensure their companies are following HR best practices and aligning with the latest employment laws. 1. Update your labor law posters Each year, about 75 mandatory state poster changes occur and many of the changes happen from October into the new year. Government agencies will not notify businesses when these changes occur and there is not just one source to buy all government posters. However, postertracker.com provides a free posting audit and complyright. com sells a selection of affordable government posters.

contractors such as freelancers or consultants, you are required to file a 1099-MISC tax form for any payment of more than $600 in the calendar year. The deadline for filing this form is Jan. 31, 2018. Company employees have W-2 forms, which indicate automatic tax deductions, but contractors get their full pay without deductions and are responsible for paying taxes directly to the government. Due to the increasing usage of independent contractors, several government agencies have cracked down on ensuring proper classification of these workers. Misclassifying independent contractors can result in penalties or major fines. In addition to filing 1099s, know the criteria for employee classification.

2. File your 1099 tax forms If you worked in 2017 with independent

TIP SHEET...continued on page 48

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BizConnections NONPROFIT

news UWM RECEIVES $2 MILLION GIFT FOR SCHOLARSHIPS, ENTREPRENEURSHIP CENTER The University of Wisconsin-Milwaukee has received a $2 million gift from alumnus Avi Shaked and his wife, Babs Waldman, to support the Lubar Entrepreneurship Center and provide scholarships in the College of Engineering & Applied Science. The gift brings the couple’s total giving to UWM to $4 million. It supports UWM’s $200 million fundraising effort, which the school quietly launched in 2012 and announced in September 2017. Shaked came from Israel in 1977 to attend UWM, where he learned English and enrolled in engineering classes. He graduated in 1980 from the electri-

cal engineering and pre-dental programs. Shaked began his career working for Milwaukee entrepreneur and philanthropist Nate Zelazo at Astronautics Corp. of America before becoming a computer design engineer at IBM. He then launched Onward Technologies, which provides IT services and custom software development to corporations. After selling the business, Shaked and Waldman, a physician and assistant professor of internal medicine at Rush University Medical College and Northwestern University Medical School, turned their focus to philanthropy. -Lauren Anderson

c alendar Team Bryce Foundation Inc. will host Let Music Be the Reason for a Smile, a fundraiser music show, from 5 to 11 p.m. on Jan. 27 at Best Place at the Historic Pabst Brewery, 901 W. Juneau Ave. The annual fundraiser supports local charities and their efforts to help children with special needs, as well as the Wisconsin Adaptive Sports Association. Tickets are $25 for adults and $10 for children. LISC Milwaukee and Safe & Sound will host the 69th annual Crime Prevention Awards from noon to 1:30 p.m. on Feb. 1 at the Wisconsin Club, 900 W. Wisconsin Ave. The event will recognize private residents and law enforcement professionals who have made the greater Milwaukee area a better place to live and work. The event is free to attend with a suggested $15 donation.

D O N AT I O N R O U N D U P The GE Giving Tree collection drive, an annual tradition for General Electric employees, brought in nearly 2,000 items, including hats, mittens, underwear and socks, for people in need | Boston Store representatives recently surprised five local charities with a $5,000 donation for each: Sojourner Family Peace Center, Milwaukee Rescue Mission, Make-aWish, The Salvation Army and Feeding America Eastern Wisconsin | The Child Advocacy Resources and Empowerment Center, a Waukesha-based organization that provides services to children who are suspected of experiencing physical abuse, sexual abuse or neglect, raised more than $21,000 for the reconstruction of the front entrance of its historic Big Yellow House. The Greater Milwaukee Foundation, Westbury Bank, Capri Senior Communities and First Federal Bank donated funds to help cover construction costs. All Concrete Construction and Badger Railing offered discounts on their services.

46 / BizTimes Milwaukee JANUARY 22, 2018

nonprofit

SPOTLIGHT

G U E S T H O U S E O F M I LWA U K E E 1216 N. 13th St., Milwaukee (414) 345-3240 | guesthouseofmilwaukee.org Facebook: facebook.com/guesthousemke LinkedIn: linkedin.com/company/guest-house-of-milwaukee

Year founded: 1982 Mission statement: The Guest House of Milwaukee provides shelter, housing, education and services to Milwaukee’s homeless who seek to transform their lives with dignity and purpose. Primary focus: Guest House aims to end homelessness in Milwaukee by providing emergency shelter and permanent housing solutions to men, women and families experiencing homelessness. Guest House is able to provide support through a variety of services, including case management and an on-site mental health and addiction clinic. Employees at this location: 82 Key donors: Zilber Family Foundation, Daniel M. Soref Charitable Trust, Brewers Community Foundation, Cudahy Foundation and Bader Philanthropies.

Executive leadership: Cindy Krahenbuhl, executive director Board of directors: Patrick O. Dunphy, Cannon & Dunphy; Dan Kolb, RBC Wealth Management; Judeen Schulte, Alverno College; Tracy Meeks, Park Bank; Andy Anderson, Aurora Health Care; Mark Berquist, Assurant Health; Kevin Evans, Center for Veterans Issues; Gregory Griffin, Marquette University; Vickie Hinds, Northwestern Mutual; Kira Lafond, Milwaukee Business Journal; JoAnn Lomax, Froedtert Hospital; Marie Millard, Baker Tilly Virchow Krause LLC; Kevin Newell, Royal Capital Group LLC; Will Ruch, Versant; and John Washcovick, Payroll Control Systems of Wisconsin. Is your organization actively seeking board members? Yes. What roles are you looking to fill? Individuals with experience in human resources, as well as neighborhood development.

PERSONNEL FILE ADVERTISING

EPIC Creative, West Bend EPIC Creative has promoted Heather Cich from account supervisor to operations manager. In her new role, Cich will be working with EPICâ&#x20AC;&#x2122;s chief operating officer to improve processes and standards while taking the lead on employee training initiatives.

banking clients. Hanson has worked in the banking industry for more than 18 years, focusing on private banking, business banking and investment services.

BUILDING & CONSTRUCTION

Horizon Retail Construction Inc., Sturtevant

Waukesha Investments, located at Waukesha State Bank, has promoted Joe Vaklyes to executive financial advisor. In his new role, Vaklyes will continue to provide a variety of advisory and non-advisory financial services, including financial planning, retirement planning, portfolio reviews, retirement income planning, long-term care insurance, social security strategies, gifting and estate planning, rollovers and fee-based advisory options.

RETAIL

Batteries Plus Bulbs, Hartland

MSI General, Oconomowoc

Foucault

Atkins

Sokolowski

Anderson

MSI General has hired Jennifer Guslick as project director to further develop its growing portfolio of regional design/ build accounts. Guslick has more than 17 years of experience leading project teams, public and private sector programs and marketing strategies, as well as managing account relationships.

BUILDING & CONSTRUCTION

Moore Construction Services, Menomonee Falls Schenkenberg

Glonek

DeNure

Schultz

BANKING & FINANCE

Park Bank, Milwaukee Park Bank has hired Nick Hanson as vice president, private banking. He will be working at its Brookfield office with private

time he managed office, industrial, education, retail, hospitality and health care commercial building projects.

BUILDING & CONSTRUCTION

BANKING & FINANCE

Waukesha State Bank, Waukesha

senior estimator, Abi Sokolowski to project manager, Dan Atkins to project manager, Tyler Anderson to project manager, and Laura Schenkenberg and Kristen Glonek to assistant project managers. It also hired Darrien DeNure as project coordinator and Tim Schultz as project manager.

Moore Construction Services has hired Joe Kwiatkowski as project superintendent. Kwiatkowski has nearly 25 years of construction industry experience and in that

Murphy

Siddons

Tramburg

Polonsky

Batteries Plus Bulbs has added several members to the executive leadership team: Brian Murphy has been named senior Kollm vice president, stores; Derek Siddons has been named vice president, company stores; John Tramburg is now vice president of chain and logistics; Dana Polonsky is now director of real estate; and John Kollm has been named director of services.

Horizon Retail Construction Inc. promoted Cory Foucault to

biztimes.com / 47

BizConnections SBA LOANS The U.S. Small Business Administration approved the following loan guarantees in November:

COACHING...continued from page 42

SECOND QUARTER: HANGING ON AND KEEPING UP

JEFFERSON COUNTY

For most people, the second quarter of life is all about hanging on and keeping up. When you are in your 30s and 40s, you may be experiencing some of the most draining years of your life. Your kids are running from one activity to another and you’re trying your best to juggle all of life’s responsibilities. During the second quarter, we are most vulnerable to the myth that we can have it all, and all at once. The “busyness” of the second quarter likely won’t change, but you can change the way you handle it. Taking time to reflect and seek inspiration from other generations may be most important during this season of life.

Greco Tax & Accounting LLC, 600 Main St., Watertown, $195,000, Live Oak Banking Co.; NCAD Restores LLC, 1303 Allermann Drive, $100,000, United Midwest Savings Bank; KENOSHA COUNTY

A&M Restoration LLC, 1000 Lotus Drive, Ste. 6, Silver Lake, $55,000, U.S. Bank; A&M Restoration LLC, 1000 Lotus Drive, Ste. 6, Silver Lake, $55,000, U.S. Bank; A&M Restoration LLC, 1000 Lotus Drive, Ste. 6, Silver Lake, $143,500, U.S. Bank; Fiesta Catering LLC, 2301 63rd St., Kenosha, Associated Bank; Lakeside Steel & Mfg. Co. – Acquisition, 4117 13th Court, $1.4 million, Kenosha, National Exchange Bank and Trust; Modalogic Corp., 5510 67th St., Kenosha, $40,000, Wisconsin Women’s Business Initiative Corp.; Toor Real Estate, 1405 60th St., Kenosha, $850,000, Byline Bank; MILWAUKEE COUNTY

2920 West Vera Avenue LLC, 225 E. Michigan St., Ste. 200, Milwaukee, $150,000, Cornerstone Community Bank;

Residential Personal Care Inc., 10721 W. Capitol Drive, Ste. 225, Milwaukee, $30,000, JPMorgan Chase Bank;

Sunnyside Ventures LLC, 200 S. Pines St., Burlington, $549,000, Racine County Business Development;

AOSS Truck 2018 LLC, S84 W19762 Loveland Court, Muskego, $129,400, Citizens Bank;

OZAUKEE COUNTY

TOM4D Investments LLC, Industrial Drive, Caledonia, $341,000, WBD Inc.;

AOSS Truck 2018 LLC, S84 W19762 Loveland Court, Muskego, $61,200, Citizens Bank;

WALWORTH COUNTY

Birchwood Real Estate Holdings LLC, E. Summit Ave., Wales, $1.7 million, First Bank Financial Centre;

Prostar Surfaces Inc., 11019 N. Towne Square Road, Thiensville, $350,000, First Bank Financial Centre; Soaring Souls LLC, 6077 W. Mequon Road, Mequon, $116,500, First Bank Financial Centre; Tres Sweet LLC, 1225 Washington St., Grafton, $25,000, Wells Fargo Bank;

Jerry’s Majestic Marine Inc., N1599 Maple Ridge Road, Lake Geneva, $150,000, Community State Bank;

Walk on Water Consulting Inc., 1640 Fox Hollow Lane, Cedarburg, $50,000, Celtic Bank Corp.;

Jerry’s Majestic Marine Inc., N1599 Maple Ridge Road, Lake Geneva, $150,000, Community State Bank;

RACINE COUNTY

Steve Williams LLC, 106 E. Walworth Ave., Delavan, $248,500, U.S. Bank;

Bounce Milwaukee LLC, 2801 S. Fifth Court, Milwaukee, $297,000, Wisconsin Bank & Trust;

Dillon’s Chocolates LLC, 147 Industrial Drive, Burlington, $50,000, Associated Bank;

City Depot Inc., 2512 W. Lisbon Ave., #18, Milwaukee, $60,000, U.S. Bank;

DPM Entertainment LLC, 220 Sixth St., Racine, $58,000, WWBIC;

Clean Like Its Spring Cleaning LLC, 3811 35th St., Ste. 4, Milwaukee, U.S. Bank;

Iamshiv Inc., 5400 Washington Ave., Racine, $262,000, Village Bank and Trust;

Milwaukee Holdings LLC, 615 E. Brady St., Milwaukee, $717,000, WBD Inc.;

Medical Support Services Inc., 1100 Commerce Drive, Ste. 1, Racine, $75,000, Community State Bank;

Night Owl Services LLC, 4843 N. 25th St., Milwaukee, $45,000, WWBIC;

Jerry’s Majestic Marine Inc., N1599 Maple Ridge Road, Lake Geneva, $125,000, Community State Bank;

Pop’s Pizzeria LLC, 790 Cornerstone Crossing, Waterford, $77,000, WWBIC;

The Rock Bar II LLC, N1530 Powers Lake Road, Genoa City, $79,500, WWBIC; WASHINGTON COUNTY

Tru-Position Inc., 1041 E. Commerce Blvd., Slinger, $75,000, First Bank Financial Centre; Yentz Family Chiropractic LLC, N112 W16076 Mequon Road, Germantown, $150,000, United Midwest Savings Bank; WAUKESHA COUNTY

Alibari LLC, 14100 W. Capitol Drive, Brookfield, $1.2 million, WBD Inc.;

48 / BizTimes Milwaukee JANUARY 22, 2018

Horn Trucking LLC, W173 S7652 Westwood Drive, Muskego, $30,000, Associated Bank;

HALFTIME: HEADING INTO THE LOCKER ROOM What does every football team do after the second quarter? They head to the locker room and hit the pause button to reflect on what took place on the field. We can incorporate the same concept in our own lives. Not everyone who goes into the locker room at halftime comes out with a completely different strategy. Sometimes, it just takes a slight tweak here or there to find more meaning and happiness. By reflecting, gaining inspiration from other generations and not getting caught up in the “busyness,” I promise you’ll walk out of the locker room with a game plan that will include investing your time and talent in things that truly matter to you. n

Jilidoni Designs LLC, 4720 Catherine Court, Brookfield, $100,000, First Federal Bank of Wisconsin; Joebec LLC, 20770 W. Coffee Road, New Berlin, $235,000, Central Illinois Bank; MSJC LLC, 0 N93 W14475 Whittaker Way, Village of Menomonee Falls, $1 million, WBD Inc.; Rock Dam Dreams LLC, 5770 S. Westridge Drive, New Berlin, $1 million, WBD Inc.; Tammy M. Haga, N34 W23223 Capitol Drive, Pewaukee, $60,000, WWBIC; Vehicle Connections, 1649 Arcadian Ave., Waukesha, $326,000, First Bank Financial Centre; Vehicle Connections, 1649 Arcadian Ave., Waukesha, $125,000, First Bank Financial Centre.

TIP SHEET...continued from page 44 3. Hold harassment prevention training As sexual harassment allegations become more common in the workplace, holding a training session to prevent all forms of harassment is critical. The training should help employees understand the different types of harassment, providing information in a relatable and interactive way. The training should also teach employees that harassment at your business is not tolerated. Managers and supervisors should receive additional or separate training in preventing and responding to harassment. Be sure to document each training session and include a record of employee attendance. This documentation will guide decisions about future training and will also protect your company if a legal dispute arises. n

MANDI 2018 finalist announcement

AROUND TOWN

Local Initiatives Support Corp. Milwaukee recently held an event at Mr. J’s Lounge in Milwaukee to announce the finalists for the 2018 Milwaukee Awards for Neighborhood Development Innovation.

KAREN HIGGINS of the Milwaukee Christian Center and ERIN FREDERICK of the Zilber Family Foundation.

RAINA JOHNSON of Artists Working in Education, COREY ZETTS and CATRINA CRANE , both of Menomonee Valley Partners, and DASHAL YOUNG of the Wisconsin Department of Children and Families.

NICOLE ROBBINS of Robbins Law Group and ARIAM KESETE of AK Development LLC.

SHAPREE BOURGEOIS of Chic Lounge and NATALIE BOWERS of Colliers International.

KALAN HAYWOOD of Haywood Group LLC, CHONDRA HIGGINS of Athena Communications LLC, and TEDDY and ANNE MARIE TSITIRIDIS, both of Pete’s Fruit Market.

LEO RIES of Martin Luther King Economic Development Corp. and KATIE PRITCHARD of Data You Can Use.

TERENCE ACQUAH and FATIMA BENHADDOU, both of the Milwaukee Department of City Development, and ARIAM KESETE of AK Development.

RAINA JOHNSON of Artists Working in Education, SAM MCGOVERN-ROWEN of Milwaukee Public Library, KATIE SANDERS of Safe & Sound and BETH HASKOVEC of Artists Working in Education.

5 5

Photos by Maredithe Meyer

90 Ideas in 90 Minutes BizTimes Media recently held its inaugural 90 Ideas in 90 Minutes event at Potawatomi Hotel & Casino. The event featured nine area business leaders who shared their advice for professional success. 9.

TROY BLAKEY of Midwest Electric and JEFF HORTON of Quality Products.

10. TIM O’MALLEY of Robert W. Baird & Co. Inc., MARSHA MATHER of Laacke & Joys and KERI GERLACH of Clement Manor.

11. SARAH BOJARSKI of Key Technical Solutions and KARL FIASCA of Chortek. 12. MATTHIAS BOLLMUS and STEVE ADKINS , both of CornerStone Plumbing LLC. 13. JOHN LIMBACH of MRA and STEVE VAN LIESHOUT of K&S Technologies Inc. 14. AMANDA BALISTRERI of Schenck and PAUL HULTGREN of Valuation Research Corp. 15. TIMOTHY WEST and JESSICA PRAHL , both of David J. Frank Landscape Contracting Inc.

16. VICKI SCHROEDER of the University Club of Milwaukee and SARAH BOJARSKI of Key Technical Solutions. Photos by Paul Gaertner biztimes.com / 49

BizConnections VOLUME 23, NUMBER 21 | JAN 22, 2018

GLANCE AT YESTERYEAR

126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120 PHONE: 414-277-8181 FAX: 414-277-8191 WEBSITE: www.biztimes.com CIRCULATION: 414-336-7100 | circulation@biztimes.com ADVERTISING: 414-336-7112 | ads@biztimes.com EDITORIAL: 414-336-7120 | andrew.weiland@biztimes.com REPRINTS: 414-336-7128 | reprints@biztimes.com PUBLISHER / OWNER Dan Meyer dan.meyer@biztimes.com

SALES & MARKETING

DIRECTOR OF OPERATIONS Mary Ernst mary.ernst@biztimes.com

EDITORIAL EDITOR Andrew Weiland andrew.weiland@biztimes.com MANAGING EDITOR Molly Dill molly.dill@biztimes.com REPORTER Lauren Anderson lauren.anderson@biztimes.com REPORTER Corrinne Hess corri.hess@biztimes.com REPORTER Maredithe Meyer maredithe.meyer@biztimes.com REPORTER Arthur Thomas arthur.thomas@biztimes.com

Brewmasters This photo, taken by A.J. Brenckle in 1902, shows the annual convention of the U.S. Brewmasters Association at the Pabst Whitefish Bay Resort. The “braumeisters” were entertained by Pabst Brewing Co., according to Milwaukee Public Museum records. The resort was opened by Capt. Frederick Pabst in about 1888 and was located along North Lake Drive, across from Pandl’s Whitefish Bay Inn. — This photo is from the Milwaukee Public Museum’s Photo Archives collection.

COMMENTARY

Time to open our eyes to sexual harassment in the workplace If you are a business leader, there are two questions you should be asking yourself right now about your company: 1. Is anyone in our company creating a hostile environment for women? 2. Is our company prepared to handle a sexual harassment complaint from an employee? For several months, Americans have been increasingly involved in a national conversation about sexual harassment, which has been brought to the forefront by the #MeToo movement. Several men in the film and entertainment industries, politics and the media, have been accused of inappropriate sexual advances on women in the workplace. However, this is not just a problem in Hollywood, Washington or national media outlets. 50 / BizTimes Milwaukee JANUARY 22, 2018

Sexual harassment is a problem in many of our workplaces in the Milwaukee area, as well. That point was driven home by the recently announced results of a survey of members of the women’s networking group TEMPO Milwaukee. Of the 97 TEMPO members who responded to the survey, about 68 percent said they have experienced sexual harassment in the workplace. The survey defined sexual harassment using the guidelines set out by the U.S. Equal Employment Opportunity Commission: unwelcome sexual advances, requests for sexual favors and other verbal or physical harassment of a sexual nature. While perhaps not surprising, the survey results are still alarming and disturbing. Some of the comments and stories shared by the women responding to the survey were, quite frankly, nauseating. Check out our story about the survey on page 4 for more details. “These survey results – and the vivid and shocking examples of harassment our members provided – should serve as a wake-up call to Milwaukee’s business community,” said Jennifer Dirks, president and chief executive officer of TEMPO Milwaukee. Nobody should have to put up with that type of behavior, particularly in the workplace.

DIRECTOR OF SALES Linda Crawford linda.crawford@biztimes.com ACCOUNT EXECUTIVE Molly Lawrence molly.lawrence@biztimes.com ACCOUNT EXECUTIVE David Pinkus david.pinkus@biztimes.com ACCOUNT EXECUTIVE Maggie Pinnt maggie.pinnt@biztimes.com ACCOUNT EXECUTIVE Christie Ubl christie.ubl@biztimes.com SALES INTERN Amanda Bruening amanda.bruening@biztimes.com SALES INTERN Tess Romans tess.romans@biztimes.com

ADMINISTRATION ADMINISTRATIVE COORDINATOR Sue Herzog sue.herzog@biztimes.com

PRODUCTION & DESIGN GRAPHIC DESIGNER Alex Schneider alex.schneider@biztimes.com

Independent & Locally Owned

ART DIRECTOR Shelly Tabor shelly.tabor@biztimes.com

— Founded 1995 —

It’s time for business leaders to open their eyes and take steps to address, or to be prepared to address, sexual harassment incidents. Business leaders need to make it clear that sexual harassment is not tolerated in their companies, and that there will be consequences if it occurs. And they need to let their female employees know that if they are the victims of sexual harassment, they can report the incidents without fear of reprisal and the situation will be addressed fairly, but appropriately. Make sure your workplace is a safe and comfortable environment for all of your employees. n

ANDREW WEILAND EDITOR

P / 414-336-7120 E / andrew.weiland@biztimes.com T / @AndrewWeiland

LILA ARYAN PHOTOGRAPHY

5 MINUTES WITH…

KEVIN EHLERT General manager, Wisconsin Club

JOHN CONSTANTINE served as general manager of the Wisconsin Club for 27 years, shepherding the private downtown Milwaukee club through $30 million in improvements, helping boost its membership from 370 at his 1990 arrival to 1,400 at his May 2017 departure, and leading the 2009 acquisition of Brynwood Country Club. Now, Constantine has retired and industry veteran Kevin Ehlert has taken the reins. In a recent interview with BizTimes Milwaukee managing editor Molly Dill, Ehlert discussed his plans for the club. GOALS FOR THE CLUB “Really to continue the success that the Wisconsin Club has seen and to be an industry leader, and that includes being a little bit unconventional. I would categorize John that way and I would say that I’m that way, as well. John’s big mantra was, ‘We’re here to serve the members,’ and that’s been mine, as well, for the last 30 years. We’re looking to continue, although with a different set of eyes, a fresh set of eyes. “We’re focusing on all generations. If you do some research into club management, we just realized that there’s this group called the millennials and they’re all interested in cell phones and data, but in actual truth they want to belong to a group of like-minded people. They certainly like exclu-

sivity that is inclusive and diverse.” CHANGES IN THE WORKS “One of the projects the club is looking at is modernizing the kitchens. That is one project that is most likely going to be in the three-year plan. Out at the country club, this spring we have some initiatives with wellness and fitness. There’s some equipment out there we’re going to swap out and bring in some new equipment.” “We’re revitalizing our website, we’ve added apps for members to better connect to the club. Using technology is a tool for us to enhance and increase our service. We’re a very high-touch club and that is just one more way, one more piece for us to give better service to our members.” FIRST IMPRESSIONS OF MILWAUKEE “I grew up in Minnesota. Coming here, it’s interesting, the community is so open and welcoming, much like the Twin Cities and Minnesota is, just that great Midwestern hospitality. And I still cannot get over how nice people are here in Milwaukee. It’s that Scandinavian and that German background of welcoming. It’s been great. The staff, the members, people I run into here on the street.” n biztimes.com / 51