BizTimes Milwaukee | March 18, 2019 by BizTimes Media

SearCHING for a CLear VISION

plus THE RISE OF BOUTIQUE FITNESS IN MILWAUKEE 12 HOW GROWTH-MINDED CEOS MANAGE THEIR TALENT 16 ADDITIONAL HOTEL ROOM SUPPLY COULD IMPACT DOWNTOWN MARKET 20

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MAR 18 - 31, 2019 Â» $3.25

FOXCONN :

presents the 12th annual:

Selling or Buying a Business? Don’t Miss Your Moment! Wednesday, April 3rd, 2019 | 7:00 - 11:00 am | Pfister Hotel Is now the right time or is it better to wait until after the next recession? Either way, you need the right tools and knowledge to make this critical decision. Selling or buying a business is complex and infrequent. Make sure you are prepared to maximize your outcome. The program includes a buy side and sell side panel of business buyers, sellers and industry experts followed by concurrent breakout sessions.

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Keynote Presentation:

Cynthia LaConte, CEO, The Dohmen Company, will provide an overview, perspectives and lessons learned from The Dohmen Company’s experiences in M&A. (1)

Panel Discussions:

Buy Side Preparation: How to Seize the Moment • Brian T. Baker, President & CEO, Sentry Equipment Corp. (2) • Sequoya Borgman, Managing Director, Borgman Capital LLC (3) • Jim Frings, President, G3 Industries, Inc. (4) • Derek Smith, Commercial Bank Exec, SVP, Old National Bank (5) Moderator: Molly Dill, Managing Editor, BizTimes Media

Sell Side Readiness: How To Prepare For Your Moment • Rick Blaha, President, Pak-Rite Ltd (6) • Dr. Aly Gamay, President & CEO, DreamPak (7) • Nate Neuberger, Shareholder, Reinhart Boerner Van Deuren S.C. (8) • Steve Peterson, Managing Director & Co-Founder, Bel Air Growth Partners (9) Moderator: Ann Hanna, Managing Director & Owner, Taureau Group (10)

Concurrent Breakout Sessions:

• Maximizing Company Value – Beyond EDITDA: You will learn about the current M&A environment and key strategies for positioning your company for maximizing value at the time of sale. • An Honest Discussion About Financing the Deal: This panel will discuss case studies, best practices, the do’s and don’ts, and the nature of banking relationships. • Avoiding Deal Killers…There’s Always Something: There are many aspects related to the buying and selling of a company. You’ll hear about some lessons learned and what works, and what to do to avoid “disaster” so the deal doesn’t “blow up”.

Event Partner:

LOCALLY OWNED FOR 23 YEARS

» MAR 18 - 31, 2019

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BizTimes Milwaukee (ISSN 1095-936X & USPS # 017813) Volume 24, Number 23, March 18, 2019 – March 31, 2019. 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

FOXCONN : SearCHING for a CLear VISION

4 Leading Edge 4 NOW BY THE NUMBERS 5 BIZ TRAVELER 6 GETTING THERE 7 ON THE JOB WITH… 8 BIZ POLL PUBLIC RECORD 9 REV UP 10 QUOTE/UNQUOTE

12 Biz News 12 BOUTIQUE GYMS TAKE HOLD IN MILWAUKEE. 15 MADE IN MILWAUKEE 16 HOW GROWTH-MINDED CEOS HANDLE TALENT MANAGEMENT. 19 M&A FORUM WILL FOCUS ON TIMING.

20 Real Estate 33 Strategies

COVER STORY

33 COACHING Susan Marshall 34 MARKETING Robert Grede 35 A BRIEF CASE

37 Biz Connections

Special Report

22 Building & Construction: Foxconn In addition to the cover story, which offers the latest insights on the massive technology campus project, coverage includes the latest on the infrastructure and construction projects supporting it.

37 NONPROFIT 38 PERSONNEL FILE 39 SBA LOANS 40 GLANCE AT YESTERYEAR COMMENTARY 41 AROUND TOWN 42 FIVE MINUTES WITH…

WE’RE PROUD TO BE

WISCONSIN’S BANK FOR BUSINESS ™

414-273-3507 | townbank.us JAY MACK President & CEO

JOHN JOHANNES Executive Vice President, Commercial Real Estate

DENNIS KRAKAU Executive Vice President, Commercial Banking

biztimes.com / 3

Leading Edge

BIZTIMES DAILY – The day’s most significant news → biztimes.com/subscribe

NOW

Wisconsin ranks near bottom on new Kauffman index By Molly Dill, staff writer For several years, Milwaukee and Wisconsin were ranked near the bottom of the barrel in business creation and growth compared to the rest of the country, according to the annual Kauffman Index of Startup Activity. In the 2017 Kauffman Index of

Startup Activity, the metropolitan Milwaukee area ranked 39th, tied with Pittsburgh for the lowest ranked major metro area. Meanwhile, Wisconsin ranked last (25th) of the larger states rankings. The state also ranked last in 2016. But then in 2018, the Index of

BY THE NUMBERS

Harley-Davidson Inc. is seeking nearly

6.3 MILLION from the owner of dealerships in Janesville and New Berlin, alleging check and inventory fraud and breach of contract.

4 / BizTimes Milwaukee MARCH 18, 2019

Startup Activity, put out by the Kansas City-based Ewing Marion Kauffman Foundation, was discontinued as the organization retooled its research strategy. The entrepreneurship-focused nonprofit recently put out a new report, the Kauffman Indicators of Early-Stage Entrepreneurship, and Wisconsin still didn’t fare well. According to the new report, based on 2017 data, Wisconsin received a -1.29 in the Kauffman Early-Stage Entrepreneurship Index. By this new measure, Wisconsin is again near the bottom of the rankings, placing ahead of just Rhode Island (-2.93), Ohio (-1.85), New Hampshire (-1.4) and Illinois (-1.36). The top performer was California, with a 2.86 index score, followed distantly by Missouri (1.86), Florida (1.75), Wyoming (1.68) and Texas (1.67). The index is comprised of four evenly weighted measures: the rate of new entrepreneurs, or the average percentage of adults becoming entrepreneurs in a given month, year average (Wisconsin was at 0.26 percent); opportunity share of new entrepreneurs, or the percentage of entrepreneurs driven by opportunity rather than necessity (73.27 percent); startup early job creation, or the jobs created by startups per 1,000 people (4.17); and startup early survival rate, or the percentage of firms surviving one year after founding (77.25 percent).

Compared to other states, Wisconsin was in middling territory for its rate of new entrepreneurs, startup early job creation and startup early survival rate. It fared particularly poorly in opportunity share, placing second to last, ahead of just Rhode Island (68.72 percent). The median was 84.7 percent. The Kauffman Early-Stage Entrepreneurship Index is calculated using data from the U.S. Census Bureau and Bureau of Labor Statistics, and the Business Employment Dynamics series, which is based on the Quarterly Census of Employment and Wages. In this new index report, Kauffman was careful to emphasize actionable data rather than rankings among states, it said. This report replaces the previous 20152018 Kauffman Index of Entrepreneurship series, which measured startup activity, main street entrepreneurship and growth entrepreneurship, the organization said. “This redesign was motivated by several priorities, including the need for a series of clear indicators, timely and current information in the context of existing data constraints, and a focus on the nature of early-stage entrepreneurship,” the report says. “The Kauffman Foundation received input from policymakers, researchers and other stakeholders about how to best accomplish these goals.” n

B I Z T R AV E L E R : F R E I B U RG NATE COLLINS President, PRO USA Inc., SharkCrates and Frueh Building Systems Inc.

Nate Collins has a lot of professional experience with Germany. After graduating from the University of Wisconsin-Madison in 2001, he moved to Stuttgart to work for a small family-owned company called PRO Blanket Bars, which serves the printing industry. Eventually, he helped the steel, aluminum and heatset blanket bar supplier open a North American distribution facility in Oak Creek under the name PRO USA Inc. Here he shares travel tips from his experience in the German city of Freiburg. n

T R A N S P O R TAT I O N :

SHUTTERSTOCK.COM

“I usually rode a city bus or the strassenbahn (streetcar). Freiburg is (also) very bike-friendly. I had use of an older model VW Golf. Although I did take it on the Autobahn a few times, the small engine couldn’t quite keep up to the Mercedes and Porsches that flew past me at 140 miles per hour.”

E XC U R S I O N S: “If you’re visiting Freiburg, you’re definitely going to want to head to the Kastaniengarten, a beer garden at the top of Schlossberg. Your reward for the long, steep walk up is a panoramic view of the city, the Münster Cathedral, and the surrounding hills of the black forest. If you’re ready to head back into the city, head to Schlappen in the Altstadt and share a 2-liter stiefel (boot) of beer with friends. Just be careful when you’re walking back outside, because legend has it, if you step into a Bächle, a series of small canals originally used to fight fires in the city, you’re destined to marry a Freiburger!”

FOOD: “Every time I go back to Germany, there are a couple of things I need to eat before I can leave. I try to stop at a local bakery to pick up my fresh butterbrezel (buttered pretzel). There’s just something about those bakery-fresh German pretzels that can’t be replicated here. I also can’t leave without having a döner kebab. It’s a Germanified Turkish flatbread sandwich filled with a mind-numbingly delicious spit-rotating mystery meat. It is shaved from the spit with a machete and topped with onions, cabbage, feta, tomatoes and a secret sauce. Other recommendations are a proper half liter of Hefeweizen beer, Kaese Spaetzle (a cheesy egg noodle dish), and pretty much any wurst.”

T R AV E L T I P : “For me, the best way to travel is to get lost, get out of the city and wander. Some of the most interesting conversations I’ve ever had were when I had no idea what the other person was saying.” biztimes.com / 5

Leading Edge

Featured Main Stage Event at BizExpo

GETTING

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MAY 30, 2019 | 7:30 AM - 9:30 AM

What’s kept you at East Town?

POTAWATOMI HOTEL & CASINO

“My heart is here – I love building relationships with other members of the community, bringing people together to celebrate one another and the City of Milwaukee. I also enjoy getting to work outside in the sun during the fast-paced summers.”

REGISTER TODAY! biztimes.com/women REINVENTING YOURSELF Choosing a new vision for your future Join us on May 30th as we kick off the 15th annual BizExpo. BizTimes Managing editor Molly Dill will lead a discussion with four of the region’s business and community leaders on the various paths each has taken in her career. You’ll hear about the drive, curiosity and leadership skills they leveraged to choose new roles that have allowed them to continue to grow and have fulfilling careers. From corporate to entrepreneur to nonprofit, each of the panelists made a conscious decision to change her career path. Listen as they discuss the opportunities, setbacks and lessons learned from changing industries and careers. Panelists: Deborah Allen, President & CEO, DNA Network LLC (1) Maggie Fernandes, Software Developer, MacGregor Partners (2) Kathy Thornton-Bias, President & CEO, Boys & Girls Clubs of Greater Milwaukee (3) Julie Waterman, Owner, Indulgence Chocolatiers (4) Moderator: Molly Dill - Managing editor, BizTimes Milwaukee

Sponsor:

Major plans for the association? “Jazz in the Park and Bastille Days have been staples of the East Town neighborhood for 30 years, and I’m excited to bring fresh energy to these longstanding, signature events. We’re launching Country Nights and a DJ Night at Jazz in the Park this summer to attract new audiences to this vibrant downtown community.”

Different about this role? “East Town has gone through a great deal of transition in the last four months. Along with our previous executive director, our entertainment buyer of 29 years retired after the 2018 season. We’ve transitioned to a new entertainment buyer, a new marketing team, and what feels like a whole new staff. Bringing this group of new stakeholders together and beginning to guide our shared vision for the organization has been a great new experience.”

In your free time? “My husband and I own a fixer-upper bungalow in Shorewood, which we are very slowly renovating. Our free time is filled with these home projects as well as trips to Milwaukee restaurants and parks with our almost 2-year-old son.”

Why have you stayed in Milwaukee? “Everything I love is here: my family, my partner, Lake Michigan. Milwaukee is accessible, affordable and central. I’m just now learning it’s also a great place to raise children. I love Milwaukee.”

EMILY MCELWEE Executive director East Town Association AGE: 30

Supporting Sponsors:

HOMETOWN: Shorewood EDUCATION: Bachelor’s in economics from Marquette University

Partners:

6 / BizTimes Milwaukee MARCH 18, 2019

PREVIOUS POSITION: Assistant director at East Town Association

Advantage Remodel By Alex Zank, staff writer Crews with Advantage Remodel LLC and partner companies could be found making renovations to a New Berlin home on a recent morning. The work being performed that day included installation of quartz countertop in the kitchen and tiling of the new master bathroom in the three-bedroom, two-bathroom house. They will also be moving the staircase by about eight feet, and installing new windows and siding. “This is essentially a whole-

home remodel,” said Andy Schafer, a partner at New Berlin-based Advantage Remodel. Pointing out where the stairs used to be, he added, “the goal was to give him a whole open concept.” Advantage Remodel, a member of the National Association of the Remodeling Industry Milwaukee, primarily serves customers in suburban Milwaukee, such as New Berlin, Elm Grove and Wauwatosa. Schafer and fellow partner Greg Wade started the company in 2009. n

1 Dustin Kohnert of Advantage Remodel cuts tile, which will eventually be placed in the home’s new master bathroom.

LILA ARYAN PHOTOGRAPHY

ON THE JOB WITH…

2 Mike Przybyla and Chris Perleberg, both of subcontractor K.G. Stevens Inc., install a large section of kitchen countertop.

Perleberg cuts countertop backsplash before installing it in the kitchen.

Jason Dellar of Advantage Remodel installs tile in the shower stall of the new master bathroom.

A level and cordless drill sit on top of a section of new quartz kitchen countertop.

Przybyla ensures a section of the counter is level prior to installing the quartz countertop.

biztimes.com / 7

Leading Edge BIZ POLL

THE

A recent survey of BizTimes.com readers.

Should Wisconsin legalize medical marijuana? YES:

NO:

70%

30%

PUBLIC

RECORD WEDC’s $10 million request denied By Arthur Thomas, staff writer

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

Wisconsin’s budget for the next two years is a long way from its final form. Gov. Tony Evers, a Democrat, introduced his version in late February, but Republican lawmakers said they plan to develop their own version. There will be plenty of debates around taxes, education and infrastructure, but one small part of the Wisconsin Economic Development Corp. budget highlighted differences between Evers and his predecessor, Scott Walker.

$10 million As part of its budget request, made in September, WEDC Examples of marketing the WEDC used in an sought $5 million annually for effort to attract people to the state. talent attraction efforts. Evers denied the request. Melissa Baldauff, an Evers spokeswoman, pointed to the governor’s proposed $1.4 billion investment in K-12 education, along with investments in the University of Wisconsin System, Wisconsin Technical Colleges, transportation infrastructure and economic development as the administration’s strategy for talent attraction. “We know that these are issues workers and businesses alike value, and believe this type of investment is key to attracting and retaining a talented workforce,” Baldauff said.

$6.8 million C H I L D R E N’ S H O S P I TA L O F WISCONSIN PHONE: (414) 266-6100 WEB: chw.org/giving Children’s Hospital of Wisconsin is a private, independent, not-for-profit health care system dedicated solely to the health and well-being of children. Our vision is that the children of Wisconsin will be the healthiest in the nation, and we strive daily to fulfill that vision through nationally ranked clinical care, advocacy, leading research and education.

2019 GIVING GUIDE

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F E ATU R E D NONPROFI T

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PRODUCED BY

After WEDC used $1 million from its budget to launch a marketing campaign targeting millennials in Chicago, lawmakers last year approved $6.8 million in funding for an expanded talent attraction effort at Walker’s request. The campaign targeted Midwest millennials, veterans and graduates of state universities and colleges. Current and projected investments are expected to use up all of that funding by the end of the fiscal year, according to Kelly Lietz, vice president of marketing and brand strategy at WEDC.

So far, the campaign has resulted in: • 100 million paid media impressions  370,000 website sessions  12,000 visitors took actions suggesting interest in moving to Wisconsin • 7 military base visits  675 leads from active military members seeking future employment. n

JAKE HILL PHOTOGRAPHY

REV UP

CMXTWENTY

LEADERSHIP: Lane Brostrom, CEO H E A D Q U A R T E R S: Wauwatosa W H AT I T D O E S: Developing opioid alternative drug F O U N D E D: 2008 (as Cytometix Inc.) E M P L OY E E S: Four NEX T GOAL: Complete phase 2 trials on CMX-020; Secure big pharma partner FUNDING: Four angel funding rounds of undisclosed amounts. Public filing for $2 million equity round in 2010.

Lane Brostrom

CMXTwenty enters phase 2 on opioid alternative By Molly Dill, staff writer

ACCORDING to the Centers for Disease Control and Prevention, about 46 Americans die every day from overdoses involving prescription opioids. Wauwatosa-based CMXTwenty is trying to help solve the opioid crisis. The company is developing a drug it says is a non-addictive alternative to opioids, and is working on phase 2 trials for both intravenous and oral forms of its medication. CMXTwenty recently completed its Phase 1 maximum tolerated dose human clinical study for the intravenous version of its CMX-020 drug in Australia. The company established a subsidiary there because the Australian government subsidizes medicine development if early trials show promising results, and its regulatory system can be more efficient. “They have a diversified regulatory system; they have over 50 committees that can approve studies,” said Lane Brostrom, chief executive officer of CMXTwenty. “What that means is we can conduct clinical studies in Australia and then submit them to the FDA.” So far, maximum tolerated dose studies have been promising, matching the efficacy of remifentanil, a potent opioid used in surgeries. “We can match this remifentanil at a very

high dose and we don’t see any adverse events,” Brostrom said. “We don’t even see a drug feel at that level.” That lack of a “drug feel” is important to avoiding addiction, he said. CMX-020 is similar to taking an ibuprofen, where the user doesn’t feel the drug actively working. “The euphoria is a factor in addiction,” Brostrom said. “What we see with CMX-020 are people in our clinical studies who are given CMX-020 intravenously, even at the highest doses, can’t even feel the effect of the drug.” Brostrom, who founded a program called TechStar in 2001 to help launch startups from Milwaukee-area research institutions, established CMXTwenty under the name Cytometix Inc. in 2008 as part of that initiative. “Over a five-year period of time we launched 15 companies, and CMX was one of those,” he said. Eventually, the hope for CMXTwenty is to find a pharmaceutical partner to help get CMX020 to market, he said. “We’re in discussions with pharmaceutical partners, larger pharmaceutical companies,” Brostrom said. “We’ve had some good conversations and we hope to partner sometime soon.” n biztimes.com / 9

Leading Edge

“ QUOTE

unQUOTE

J E L E NA M c W I L L I A M S

”

CHAIRMAN, FDIC Jelena McWilliams, chairman of the Federal Deposit Insurance Corp., recently spoke at the annual Wisconsin Bankers Association conference at The Pfister Hotel in downtown Milwaukee. She was interviewed by Dave Werner, president and chief executive officer of Park Bank, and Rose Oswald Poels, president and CEO of WBA. McWilliams has been chairman since May 2018, when she was confirmed by the U.S. Senate for a five-year term at the helm of the independent federal agency, which insures deposits of U.S. banks and thrifts against failure. She was previously executive vice president, chief legal officer and corporate secretary for Fifth Third Bank. n

“I am reconstituting how we do business at the FDIC. … So I’m eating lunch in the cafeteria, I’ve delegated a lot of things to capable staff and make sure they understand with delegation comes authority. So I think more of our decision-making should be given to the regions and our local examiners.”

“I came to the United States 27 years ago from former Yugoslavia in search of a better life, frankly. … I applied for a credit card but I was denied because I didn’t have any credit history or a job. … That’s how I ended up integrating myself into the financial system in the United States and why some of the initiatives coming out of the FDIC – small dollar lending and reaching out to consumers who are not a part of the mainstream financial system – is important.”

“From 2010 to 2016, we have had two de novos and we have lost hundreds of banks in the financial crisis. Then there is also the consolidation that is taking place in the industry, so we are losing banks. And I don’t know what the right number of banks in the United States is.”

10 / BizTimes Milwaukee MARCH 18, 2019

“It’s not the nature of the regulatory agency to declutter. We’re like (Marie Kondo’s) worst nightmare. So you get myriad regulations and guidances and guidelines addressing the same thing, and one is from ‘94, one is from ‘97, one is from 2004. But in 2004 we didn’t say the other ones are rescinded.”

“Every community loses when they lose a bank. The point of our regulatory system in D.C. needs to be such that we are cognizant of the economic impact banks have on their communities and how they serve their communities and be able to create a regulatory environment that is conducive to banks being able to prosper.”

Presents:

WAUKESHA COUNTY 2035 April 26, 2019 | 7:00-11:00 am | The Ingleside Hotel

Register Today! biztimes.com/2035 “Competing in a New Era of Innovation” Join us on April 26th as author Greg Satell (1) shares his insights on how the new era of innovation is transforming connections and interactions with customers, partners, vendors and employees. Greg is a popular author, speaker, and trusted adviser whose new book, Cascades: How to Create a Movement that Drives Transformational Change, will be published by McGraw-Hill in April, 2019. His previous effort, Mapping Innovation, was selected as one of the best business books of 2017.

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As an accomplished entrepreneur, executive and one of the foremost experts on innovation today, Greg speaks to audiences around the world and works with leading organizations to better compete in today’s disruptive marketplace. He was recently named by Innovation Excellence as #2 on its global list of “Top 40 Innovation Bloggers” and by IDG as one of “10 Digital Transformation Influencers to Follow Today.” Following the keynote presentation, local CEOs will discuss how technology and innovation are changing their business and what they are doing now to stay relevant for the next two decades. • W. Kent Lorenz, Retired Chairman, CEO - Acieta LLC (2) Topic: IoT Technology trends for manufacturers • Joel Quadracci, Chairman, President, CEO - Quad (3) Topic: From Disrupted to Disruptor

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Following the presentations, it’s time to roll up your sleeves as the program continues with 12 unique roundtable discussions. Attend any three. Each table will be led by an expert discussion leader. Topics include: • • • • • •

Best Practices for Building Expansions Competing in a New Era of Innovation Disrupt or Be Disrupted: The Rise of Digital Ecosystems Economic Development – Planning for 2035 IoT Technology Trends for Manufacturers Investing in Leadership

Sponsors: W E A L T H

M A N A G E M E N T

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Waukesha County Transportation Infrastructure Retirement Planning Perspectives The Future of Housing Upskilling your Workforce for a Competitive Advantage Workforce Development Workspace and Commercial Real Estate Event Partners:

BizNews BOUTIQUE GYMS

Left: Orangetheory’s 60-minute group classes are led by trained coaches and include both cardio and strength training. Above: Construction on the 1,300-squarefoot addition at Anytime Fitness in Wauwatosa was completed in April 2018.

The rise of boutique fitness in Milwaukee Studios entice members with experiences By Maredithe Meyer, staff writer WHEN LOCAL entrepreneur Kevin Scharnek first stepped foot in an Orangetheory Fitness studio in 2012, he had never heard of the company. He was in southern Florida for a business trip and decided to take a class to get some exercise. The Boca Raton-based fitness franchise had launched two years prior and, at the time, operated about 35 studios in the U.S., Scharnek said. Seven years later, Scharnek is Wisconsin’s franchise owner and has opened six (soon to be eight) of the nine Orangetheory Fitness locations throughout the state. And the company has expanded to more than 1,100 locations in 49 states and 22 countries. The fitness concept is based on achieving a target heart rate zone that yields physical results when maintained throughout a 60-minute, high-intensity interval training session. Classes incorporate treadmills, rowing machines and various strength-building equipment. Orangetheory belongs to an increasingly popular industry 12 / BizTimes Milwaukee MARCH 18, 2019

category known as boutique or studio fitness. Such concepts differ from traditional gyms of the past by offering specialized, instructor-led classes, rather than rows of treadmills and weight machines. Boutique gyms are characterized by specific disciplines – cycling, barre, yoga, HIIT, CrossFit – and seek to give members a personalized, hands-on experience and a sense of community, experts say. Consumers in recent years have responded to this model. According to the International Health, Racquet and Sportsclub Association, studio membership grew by 121 percent from 2013 to 2017. According to a 2017 report by the same organization, 24.6 million Americans were members of a studio. When Scharnek discovered Orangetheory, the boutique fitness trend had been gathering steam throughout the East and West coasts, but had not yet hit the Midwest, he said. “I believed in and spent a lot of time talking to other (Orangetheo-

ry) owners – at the time there were very few – and other people that have tremendous fitness backgrounds, and felt that boutique fitness category was about to really take off,” he said. “And it has.” Wisconsin’s first Orangetheory opened in Brookfield in 2014, and since then, boutique and studio gyms have been popping up throughout the Milwaukee area. They include, but are not limited to, Milwaukee-based PowerCycle in Wauwatosa and Shorewood; Milwaukee-based Spire Fitness in the Historic Third Ward; Chicago-based Shred 415 on the East Side and in Elm Grove; Irvine, California-based Cycle Bar in Mequon and Brookfield; Chicago-based The Barre Code in the Third Ward; Milwaukee-based Brew City Fitness in Walker’s Point; Milwaukee Power Yoga on the East Side; San Diego-based Club Pilates in Mequon; Milwaukee-based Empower Yoga in the Third Ward and Whitefish Bay; Denver-based Pure Barre in Elm Grove and Whitefish Bay; AddeoFit in Glendale; and Orangetheory in

the Third Ward, Wauwatosa, Shorewood, Delafield and Mequon. The recent influx of fitness concepts has made the local market more competitive, especially for gyms that were initially ahead of the trend, said Jeff Winzenried, owner of Monkey Bar Gym in the Third Ward. Monkey Bar Gym first opened in Madison in 2000 and has since grown to operate 10 locations in Wisconsin, Washington, Colorado, New York, Louisiana, Montana, Connecticut and Canada. It offers functional fitness programs centered on natural training (“no machines, no shoes, no mirrors and no egos”), yoga and clean eating. Winzenried, who has been a trainer for 15 years, opened the company’s Milwaukee affiliate location in 2011, during a time when there were only a handful of boutique gyms in the area, he said. But as that quickly changed over the past five years, Winzenried has worked to adapt his business to industry trends. “For me personally, as a business owner of a gym that’s been around for eight years and who’s been a trainer for this long and has seen the changes (in the industry), you’ve got to be on the cutting edge, on the leading edge of these trends because now, everybody else is catching up to what we were doing for the past 20 years,” he said.

Right now, being on that cutting edge means improving the customer experience, Winzenried said. Consumer-facing industries, including fitness, retail and entertainment, have seen a shift toward an experience-driven economy in recent years as people choose to spend more money on experiences than they do on products. This trend, which research has shown is heavily driven by the millennial generation, has changed the way many businesses attract and retain customers. The industry’s boutique fitness category is no stranger to this phenomenon, especially because the average age of a studio gym member is 30 years old, according to the IHRSA. “The consumer is moving from product and price to the customer experience as being their No. 1 buying decision,” Winzenried said. “...The client experience has to be

genuine.” For Monkey Bar Gym members, that experience is made up of factors such as its downtown location, unlimited access to its nearly 70 classes each week (for a $100 to $150 monthly fee), its social media presence, and “close-knit” trainers and staff – most of whom started off as members themselves, Winzenried said. On a much larger scale, the Orangetheory experience is defined by its well-known brand, but more so by its use of technology, Scharnek said. Each class participant wears a heart rate monitor that tracks his or her beats per minute and calories burned, and broadcasts those numbers on big screens during the workout. That data is then stored for members to access later through their online account. “After every class, I know exactly how many minutes I was in the

orange or red (heart rate) zone, how many calories, what my average heart rate is and, if I’m interested, I can go back and look at the week, the month, the year – I have access to all of that data at my fingertips and I think that’s so important to consumers,” Scharnek said. But whether it’s a multinational or locally-owned studio, a major draw to and experiential aspect of boutique fitness concepts seems to be the sense of community or camaraderie offered to their members. That same aspect could also be a driving factor of the rapid growth within the boutique fitness sector and the decline or slower growth of other fitness categories. Such was the case for Anytime Fitness in Wauwatosa. When general manager and co-owner Jen Dunnington took on her current role in 2016, the 24hour health club lacked a culture and opportunities for members

to engage with the gym and with each other, she said. An advocate for community building, Dunnington got to work implementing programs such as monthly challenges to help members feel more involved and connected. Those efforts later gave way to a 1,300-square-foot addition to the facility, allowing the fitness center to bulk up its coaching services and offer group fitness classes. The $100,000 project was part of a larger corporate initiative to keep up with the boutique and class-based fitness trends, Dunnington said. “It’s bringing in that Orangetheory idea of working with a group; however, for the people who don’t want to do that, we still wanted to keep the 24/7 access,” she said. “It gives us the chance to work with more people, and then the members really get to know each other that way, too.” n

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14 / BizTimes Milwaukee MARCH 18, 2019

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Spike Brewing goes from flipping kegs to a future of growth WHEN SPIKE BREWING LLC moved into its current facility on North Fratney Street in early 2017, founder Ben Caya figured there was no way the brewing equipment maker would fill up the 14,000-square-foot space. Before long, however, the company took over 4,000 square feet of office space on the building’s second floor and then another 4,000 square feet adjacent to the shop floor. Sales continued to grow and once open space in the production area quickly shrunk to nothing. “There wasn’t really any process flow, it just kind of zigzagged through the shop,” Caya said of the company’s setup. Things reached a point where something needed to change. Last summer, a typically slower time for the business, Caya made the decision to build up some inventory and shut down production to redesign how Spike Brewing does its work. The result is a more streamlined operation with two distinct production lines each for kettles and conical fermenters. The setup gives Spike the flexibility to focus on different products as market demands shift, while also leaving room for new product introduction. “It helps us get a little bit more to a lean manufacturing mindset,” Caya said. The company now plans to add eight employees this year, after growing from five to 21 employees in 2017. Caya has been figuring out how to help Spike grow since the beginning, and his entrepreneur-

ial roots run even deeper. When he was 12, he and a friend had a small enterprise buying and selling T-shirts from China. “I don’t know if it’s something you’re born with or something you get turned on to, but it took me over,” Caya said. Spike Brewing got its start when Caya moved in to a house as a University of Wisconsin-Milwaukee student. He found three empty beer kegs and, assuming they had some value, put them up for sale on Craigslist. Those kegs sold and soon Caya had a successful enterprise buying kegs and flipping them for a profit. He even drove to Iowa at one point to pick up 110 kegs to sell online. It turned out that many of Caya’s customers were homebrewers who would purchase the kegs and turn them into brewing equipment. Caya figured he could make a better profit if he did the cutting and welding for his buyers. “That was the first signs of what Spike was going to end up being,” Caya said. As the popularity of homebrewing increased, Caya’s business grew. But eventually, his keg supply dried up, so Caya decided to branch out. He found a chili kettle supplier and began converting those into brewing equipment. Spike has differentiated its products from the start by welding its fittings. Some competitors used a weldless fitting with an O-ring and compression fit. “It’s a better option. It’s how they do it in industry,” Caya said. The company has also continuously expanded its product line

Welded fittings helped Spike Brewing differentiate its products from competitors.

SPIKE BREWING LLC 3866 N. Fratney St., Milwaukee INDUSTRY: Brewing equipment EMPLOYEES: 21

spikebrewing.com

with kettles, conical fermenters, brewing systems and accessories. About 50 percent of the kettles the company ships feature some kind of customization, and Caya said embracing customer needs helps the business. “Brewing is a pretty intricate process so people are pretty particular on how they want their kettles situated,” he said. Spike sources its base kettles from a supplier in China and brings them in-house for welding and fabrication. At this point, Caya said Spike is more of an engineering and marketing firm that performs value-added processes and assembly. Over time, however, he would like to continue bringing more processes in-house. “I don’t see us stamping and rolling kettles anytime soon, but being able to take components and keep adding and adding more helps us,” he said. Homebrewers currently make up 80 to 90 percent of Spike’s sales, but since the company makes mid-level to higher-end equipment, it is also able to attract some professional brewers. Caya

said there is plenty of room for the company to continue growing with an increased focus on either smaller, professional brewers or on a wider segment of the homebrewing market. Spike will continue to expand in both directions, Caya said, adding there are also plenty of ideas for new products. “Now it’s strategically trying to plan on which butterflies you go after first,” he said. n

ARTHUR THOMAS Reporter

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

biztimes.com / 15

BizNews EVENT COVERAGE

How growth-minded CEOs operate their talent management systems Tolerance of average performance is costly By John Lankford, for BizTimes Editor’s note: John Lankford is a four-time winner of a North American Business Advisor of the Year award. He has 23 years of corporate experience and 12 years of entrepreneurial experience. He is also the author of the book, “The Answer is Leadership… What is the Question?” Lankford will be the keynote speaker at the inaugural Executive Forum, presented by BizTimes Media, on Thursday, March 21, from 7 to 11 a.m. at the Italian Community Center in Milwaukee. WHAT DO high-performing companies have in common? Their senior leaders actively focus on, participate in, and refine their

16 / BizTimes Milwaukee MARCH 18, 2019

systems for finding, keeping and growing great employees. Said another way, every organization’s performance is directly related to the way leaders at the top operate nine specific talent management systems. Conversely, senior leaders who fail to actively engage in their talent management systems find themselves struggling with avoidable problems that eventually drain their bottom line and create endless chaos across their businesses. Unfortunately, this disconnect continues to be the norm in businesses across America. The business case for how well your executive team makes talent

a business priority will directly impact your organization’s ability to execute and outperform your competition. Your management of these nine talent management systems will decide if your culture attracts the 51 percent of employees who are looking for a better place to work, according to Gallup. 1. Recruiting system A well-designed recruiting system is the result of solid strategic design. Too often, the precise “look and feel” for the system, who should be involved, where and how candidates are sourced, and clarity around the exact type

of talent the company wants to hire is poorly defined and rarely communicated. What is the gap between your current recruiting system and an industry leader’s recruiting system? 2. Hiring and selection system A solid hiring and selection system is focused on what it will take to replicate the company’s short list of top performers. Unfortunately, most executives are too removed from the process and practices for hiring new employees to notice the glaring gaps that exist. Inconsistencies, lax and careless execution, properly titled but poorly trained professionals, and inadequate assessment tools sabotage even the best of efforts. What changes would your company experience if you hired only “A or B” perform-

ers for the next five years? Are you hiring the right people? According to Gallup, for the first time in decades, there is a new No. 1 reason for turnover (across all industries) in America: lack of training/ development and career growth opportunities. 3. Onboarding system Onboarding, often called new employee orientation, is one of the most commonly underleveraged and mismanaged HR systems. World-class organizations take onboarding seriously by designing a process that engages, educates and equips new employees for success. But most organizations drag employees through a pile of paperwork and then put them to work immediately, creating a poor first impression and inspiring boredom and disengagement.

What would it save you in hard dollars annually if the productivity of all new hires increased significantly and in a more timely manner, because of how quickly and effectively they were onboarded? 4. Training and development system Organizations really have three options when it comes to people. They can tolerate their existing performance, go outside the company and buy new talent, or develop the talent already on their payroll. Recently, a national survey showed that employees at most mid-sized to large companies received 35.2 hours of training, while employees at world-class organizations allocated 49.1 hours, on average. Do you have a strategic system for training and development? What would it mean to your

Business advisor John Lankford, author of “The Answer is Leadership… What is the Question?” will be the keynote speaker at the Executive Forum, presented by BizTimes Media, on March 21.

company’s profitability and customer loyalty to have the most talented, skilled and well-trained workforce? 5. Accountability system Accountability aligns every full- and part-time contributor

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to the key priorities of the organization. Managers and associates have clear expectations, understanding of their role, knowledge of how they will be held accountable, and clarity around how their

BizNews

performance will be measured and compensated. What would be possible in your company if every contributor was aligned with your company goals and enthusiastically executing to plan? 6. Leadership development system If leaders create the culture of your business through their behaviors, why do so many executives make decisions around their management development based on cost? Developing leaders is one of the best investments a company can make and, if done correctly, will always pay for itself. This is because of a very simple premise: an organization will never outperform its leadership team. How would a leadership team that consistently executed with excellence impact your bottom

line over the next two years? 7. Promoting of talent system Great performing organizations take promoting talent seriously. Nothing is left to happenstance. They establish a process for identifying and preparing associates to become frontline managers. They proactively groom handpicked directors and middle managers for executive level positions. They recognize talent and do what they need to do to keep it. How would your management team perform if only the most talented people were promoted into management positions? 8. Compensation system Far too many companies approach compensation in a casual, unstructured way. Although laws vary from state to state, all demand consistency.

Discrimination or preferential treatment in base pay increases, bonus systems, profit-sharing, or any other method of recognizing effort and results is strictly forbidden. This makes developing a uniform system and properly training every manager to consistently execute it non-negotiable. What would be the hard savings annually if every contributor’s compensation was directly tied to their measurable performance, as well as the measurable performance of the company? 9. Measuring culture system Every culture is a reflection of its leadership, whether by design or default. Jeof Bean, co-author of the book, “The Customer Experience Revolution,” conducted research that concluded: “The top 10 customer experience leaders

generated cumulative total returns that were 41 percent better than the S&P 500 Index.” How leaders treat employees is how employees treat your customers. Do you have a culture that attracts the talent you need to achieve your goals for 2019? It’s important to recognize that designing and improving your nine talent systems is only half of the equation. The other half is dedicated execution. Strategic tracking and accountability are critical for the execution and long-term sustainability of each system. Knowing the ins and outs of your company’s talent systems can put you steps ahead of your competition. Each of the above talent systems is unique, yet all are integrated and contribute to the quality of your greatest asset – TALENT! n

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The Future 50 Awards Program is a service of the Metropolitan Milwaukee Association of Commerce (MMAC) and its Council of Small Business Executives (COSBE). 18 / BizTimes Milwaukee MARCH 18, 2019

EVENT PREVIEW

M&A Forum will focus on timing By Molly Dill, staff writer BUYING OR SELLING a business is an unusual situation for most people, and it’s usually a complicated process. One of the most challenging aspects is timing it right. The 2019 BizTimes M&A Forum will provide strategies and insights for those who are seeking to maximize their outcome in a deal. The M&A Forum will be held on Wednesday, April 3, from 7 a.m. to 11 a.m. at The Pfister Hotel, 424 E. Wisconsin Ave. in Milwaukee. The theme is, “Selling or Buying a Business? Don’t Miss Your Moment!” Cynthia LaConte, chief executive officer of Milwaukee-based The Dohmen Co., will give the keynote address on her lessons learned from buying and selling several divisions of the company over the years. Most recently, Dohmen sold its Life Science Services business; launched a new subsidiary, Dohmen Constellations; and transitioned to being a family-owned benefit corporation owned by a private foundation. Following LaConte’s address, there will be two panel discussions: “Buy Side Preparation: How to Seize the Moment” and “Sell Side Readiness: How to Prepare for Your Moment.” The Buy Side Preparation

discussion will cover opportunities and risks associated with buying a business; implications of mistiming the market; and managing the before-and-after of a purchase. Panelists will include: Brian Baker, president and CEO of Sentry Equipment Corp.; Sequoya Borgman, managing director of Borgman Capital LLC; Jim Frings, president of G3 Industries Inc.; and Derek Smith, commercial bank executive and senior vice president at Old National Bank. BizTimes managing editor Molly Dill, who covers financial services news for BizTimes, will moderate the discussion. The “Sell Side Readiness” panel will focus on personal readiness versus market readiness; driving value through business readiness; and considerations after the sale. Panelists will include: Rick Blaha, president of Pak-Rite Ltd.; Dr. Aly Gamay, president and CEO of DreamPak; Steve Peterson, managing director and co-founder of Bel Air Growth Partners; and Nate Neuberger, shareholder at Reinhart Boerner Van Deuren S.C. Ann Hanna, managing director and owner of Taureau Group, will lead the discussion. Following the panels, attendees will have the opportunity to attend one of three concurrent breakout sessions: “Maximizing Company Value – Beyond EBITDA,” led by Hanna and Corey Vanderpoel, managing director and owner of Taureau Group; “An Honest Discussion about Financ-

Cynthia LaConte (1) Brian T. Baker (2) Sequoya Borgman (3) Jim Frings (4) Derek Smith (5) Rick Blaha (6) Dr. Aly Gamay (7) Nate Neuberger (8) Steve Peterson (9) Ann Hanna (10)

(1)

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(5)

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ing the Deal,” led by Brian Baker, Derek Smith and David Bartelme, managing director at Borgman Capital; or “Avoiding Deal Killers… There’s Always Something,” led by

MEET

Carl Kugler, shareholder at Reinhart Boerner Van Deuren S.C. For more information or to register for the event, visit biztimes. com/maforum. n

BETTER. EVENTS THAT WORK

Real Estate

REAL ESTATE WEEKLY – The week’s most significant real estate news → biztimes.com/subscribe

The 227-room Drury Plaza Hotel is being developed at 700 N. Water St., in a former downtown office building.

COLLIERS INTERNATIONAL | WISCONSIN

Additional hotel room supply could impact downtown market

7800 N. 113th St.

BUYER: Felton Properties Inc. SELLER: LSOP WI LLC PRICE: $37.7 million SIZE: 392,000 square feet 20 / BizTimes Milwaukee MARCH 18, 2019

A NUMBER OF HOTELS set to open in the coming months could have significant impacts on the downtown Milwaukee market, based on an analysis of market data. The occupancy rate for downtown Milwaukee’s hotels was 66.3 percent in 2018, an improvement

of 2.2 percent over the year prior, according to market data from Hendersonville, Tennessee-based STR Inc. Data provided by STR, reaching back to 2012, shows that the occupancy rate appears to be generally stable for the downtown Milwaukee hotel market over the past seven years. Greg Hanis, a hotel industry analyst and president of New Berlin-based Hospitality Marketers International Inc., noted the rate shows a narrow range of 65.6 percent to 68.3 percent. However, the added rooms that will come from hotels that plan to open over the next year or so will certainly impact the market, Hanis said. At least four new hotels will open their doors downtown soon. This includes the Drury Plaza Hotel at 700 N. Water St., which will add 227 rooms; the Cambria Hotel, at 503-521 N. Plankinton Ave., which will add 132 rooms; and two hotels that will be built next door to each other: A dual-brand Home2 Suites by Hilton and Tru by Hilton at 433 E. Michigan St. and a Holiday Inn Express at 517 N. Jefferson St., which together will add a little more than 300 rooms. The hotels are all expected to

FEATURED DEAL: S I X- B U I L D I N G O F F I C E PORTFOLIO DEAL Felton Properties Inc., a Portland, Oregon-based commercial real estate investment and management firm, made its entrance into the Milwaukee market this winter with the acquisition of six office buildings totaling 392,000 square feet in a $37.7 million portfolio deal. Three of the buildings are in the Crossroads business park in the Town of Brookfield, at 20825, 20935 and 20975 Swenson Drive. The other three buildings are located in the Park Place office park, at 7800 N. 113th St., 11100 W. Liberty Drive and 11301 W. Lake Park Drive. “(The deal) fits with our model of acquiring well-located assets with intrinsic value where we have the ability to significantly increase property value through our hands-on approach to leasing and management,” said Matt Felton, chief executive officer of Felton properties.

is on track to finish by the end of this summer. She said the new hotel is one instance in a push for Drury Hotels to open more locations in downtown markets. “One thing we talked about with our guests (is) where they want to go, and we’ve been hearing ‘Milwaukee’ for years,” Feltner said. A spokesperson for Choice Hotels International, which owns the Cambria Hotels brand, said in an email that Milwaukee is an ideal market for a Cambria hotel because of its “tremendous tourism growth,” as well as the fact that it is a top city for entrepreneurs and startups. Both companies noted nearby attractions, such as the Milwaukee Public Museum, downtown Riverwalk, Wisconsin Center and Harley-Davidson museum, as factors in the decision to bring their brands to downtown Milwaukee. Other data points The STR market data shows that hotel room supply was up about 2.7 percent in downtown Milwaukee in 2018, a result of the opening of the 150-room Hyatt Place at the former Pabst brewery complex, while demand was up about 4.9 percent from the previous year. Revenue was up 5 percent in 2018, to a little more than $182 million. Revenue per available room was a little less than $94, a 2.3 percent increase from the year prior. The average daily room rate for the downtown area was $141 a night, virtually unchanged from what was observed in 2017. n

EPPSTEIN UHEN ARCHITECTS

open between this summer and early next year. Hanis considered those upcoming hotel openings to see how those additional rooms might be absorbed in the coming years. To do that, he looked at how demand for lodging has grown over the past six years. For instance, demand grew by 4.9 percent in 2018 versus the year prior. Averaging the past six years of demand growth shows the average year-over-year change is roughly 5 percent. A conservative estimate for demand growth, about half that sixyear average, would be roughly 2.5 percent. Hanis used the six-year average demand growth, as well as a more conservative estimate, to project the likely changes to occupancy rates in the downtown hotel market in the coming years. Starting in 2020, the first full year these hotel rooms would be on the market, the occupancy rate for the downtown market was found to be between 62.3 percent (conservative estimate of 2.5 percent demand growth) and 65.4 percent (assuming a full 5 percent demand growth). If these new rooms weren’t added, occupancy rates would be between 69.7 percent and 73.1 percent. Continuing into 2021, occupancy rates when factoring in the additional rooms range between 63.8 percent and 68.6 percent, and in 2022, occupancy rates are projected to range from 65.5 to 72.1 percent. Without the new hotel rooms, in 2021 that rate would likely range from 71.4 to 76.8 percent, and in 2022 it would range from 73.5 to 80.6 percent. “The new rooms will have an impact on the market,” Hanis said. “If I were a new hotel developer, I’d say don’t count on downtown Milwaukee occupancy to go up by 2022.” Meanwhile, work continues on the planned downtown hotels. The companies offered various reasons for wanting to locate in the market. Carolyn Feltner, director of marketing with Drury Hotels, said crews are busy converting the 14-story former office building into a 227-room hotel, and the project

PROHEALTH CARE HOSPITAL IN MUKWONAGO Construction kicked off in February on a new hospital in Mukwonago. The construction of new space and renovation of existing space will result in a 24-bed hospital at the ProHealth Mukwonago campus at 240 Maple Ave. The project marks the health system’s fourth hospital and its first hospital in Mukwonago. Once completed, by spring 2020, the hospital will offer 24-hour emergency services, inpatient and outpatient surgery, advanced diagnostic imaging and laboratory services, among other things. The construction manager is Madison-based J.H. Findorff & Son Inc., the architect is Milwaukee-based Eppstein Uhen Architects Inc. and Milwaukee-based GRAEF-USA Inc. is providing structural and civil engineering, as well as landscape architectural services. OWNER: ProHealth Care COST: $55 million STORIES: Three

ALEX ZANK Reporter

P / 414-336-7116 E / alex.zank@biztimes.com T / @AlexZank

biztimes.com / 21

STORY COVER

FOXCONN : SearCHING for a CLear VISION

“I

BY Arthur Thomas, staff writer

N WISCONSIN

tually be built? we’re not building a factory. You can’t use a Take Woo’s words literally and there are many reafactory to view our Wisconsin investment.” sons to be concerned. More than 4 million cubic yards of Foxconn executive Louis Woo’s words dirt have already been moved at the company’s Mount in a late January Reuters report set off alarm bells in Wis- Pleasant site. Millions of dollars have been spent on real consin. Was Foxconn pulling out of its $10 billion LCD estate and infrastructure. Families have uprooted their manufacturing project in the state? Would the company lives without much of a choice to get out of the way of the no longer bring any manufacturing to Mount Pleasant? mega project. If Foxconn were pulling out of the project, all Making LCD panels, not just assembling televisions, that effort would seem to be a waste. was at the center of the $10 billion, 13,000-job project Foxconn originally announced in July 2017. The company ini- AN ECOSYSTEM FOCUS tially planned to make the largest screens in the world but Even if Foxconn stays but does not follow through later said it would change to a different technology aimed with its plans for a TFT-LCD factory in Wisconsin, there at making smaller screens, providing additional flexibility. would still be major implications for the project. The plant State incentives for the Foxconn project could total is a centerpiece in making the deal work for the company $3 billion, with local incentives and infrastructure in- and for the state. vestment worth more than $1 billion. With such a large “Without manufacturing here in Wisconsin, there investment from taxpayers, changes to the project raise will not be sufficient critical mass to create a cluster of major concerns about the company’s ability to live up to firmware, hardware and software engineers, designers, its promises. programmers, digital innovators – folks who could jointly After the Reuters report, Foxconn acknowledged it create, test and commercialize their products, applications was again reconsidering what kind of thin-film-transistor and solutions – all locally,” Woo told BizTimes in response technology it would deploy in Wisconsin, raising the pos- to a written question about the importance of including a sibility that a factory that actually makes LCD panels may fabrication facility. not be in the cards. Understanding the importance requires putting the But the company also laid out a number of construc- emphasis on the second part of Woo’s quote to Reuters, tion projects it is planning in the next 18 months, including the part about not viewing it as a factory. Since the first assembly and packaging facilities, data, rapid prototyping project announcement, Foxconn executives have said the and research and development centers, and a precision Wisconsin campus would be part of an AI 8K+5G ecosysmolding factory. tem and be about more than just a single factory. The next day, Nikkei Asian Review reported FoxThe problem is it has never been abundantly clear conn was suspending work on the Wisconsin project, what an 8K+5G ecosystem actually is. The phrase includes setting off another round of questioning in Wisconsin. references to the next generations of screen resolution The tumultuous week concluded with Foxconn and cellular data connections. It also includes the kind issuing a statement recommitting to building a Gen of business buzzword the average Wisconsinite might 6 LCD fabrication facility in Wisconsin. The state- struggle to define. ment came after talks with the White House and BizTimes requested an interview with Foxconn exa conversation between President Donald Trump ecutives to discuss the company’s vision for the Wisconn and Foxconn chairman Terry Gou. Valley Science and Technology Park, the name given to Throughout the three days of questioning the developing campus in Mount Pleasant. Woo ultimateabout the Foxconn project’s fate, the empha- ly responded to written questions through a company sis was primarily on the first part of Woo’s representative. statement to Reuters: Would a factory ac“The positive impact we envision far surpasses that 22 / BizTimes Milwaukee MARCH 18, 2019

Foxconn says 8K+5G technology could help manufacturers with fault detection and quality improvement.

which can be achieved by building a factory or a manufacturing site alone,” Woo wrote. Todd McLees, founder and managing partner of Milwaukee-based management consulting firm Pendio Group, said experts predict digital ecosystems could create tens of trillions of dollars of new economic value in the coming years. McLees has worked with Foxconn to develop a program to find suppliers in the state. The idea of a business ecosystem is not a new one. A 1993 Harvard Business Review article by James F. Moore is often cited as the place where the term got its definition. Moore suggested in an

Above: Foxconn envisions a number of health applications for its technology. Right: 8K camera and screen technology could be used for more precise medical procedures, according to Foxconn.

ecosystem, companies “work cooperatively and competitively to support new products, satisfy customer needs, and eventually incorporate the next round of innovations.” McLees has his own definition that emphasizes the dynamic nature of today’s ecosystems. The companies involved and their particular role can change depending on the project. The idea is that each partner brings its expertise to the table, cutting into the learning curve for everyone involved, shortening the time and cost of getting to market. “It turns months into days,” he said of what an ecosystem does for innovation Wisconsin has its own experience with similar concepts. Based in Milwaukee, The Water Council has sought to capitalize on the region’s cluster of water technology companies by creating programs to foster startups and spur innovative thinking. Similar efforts are also underway around the energy, power and controls, and food and beverage industries.

Had the term been applied to business more than 100 years ago, the Milwaukee region would have been known for its small engine ecosystem, with the likes of Ole Evinrude helping Harley-Davidson Inc.’s founders get their start. The region developed iconic small engine brands, in part, because people in the area knew how to make things like cylinders, pistons and carbonators and improve on them. Those clusters developed over time and without the scrutiny applied to Foxconn. The company is essentially trying to transform its business and launch an industry in a new country with the world watching. Woo said the company is recruiting for teams in the state that could create breakthroughs in the industrial, automotive and health care internet sectors and working with public sector, academic, social and corporate partners. He pointed to the company’s $100 million Foxconn Institute for Research in Science and Technology partnership with the University of Wisconsin-Madison; planned innovation centers in Eau Claire, Green Bay and Racine; a $1 million Smart Cities competition; and a $100 million venture fund with Advocate Aurora Health, Johnson Controls International plc and Northwestern Mutual Life Insurance Co. as examples of how the ecosystem is developing. The vision includes 8K camera and display technology, which has a resolution with four times the number of pixels as 4K televisions. Greater resolution means more data, but that is where 5G technology enters. The next generation of cellular networks will be capable of handling more data at faster speeds. Things that took minutes to download would take seconds. It is also about more than moving large amounts of data, however. At 1 to 4 milliseconds, 5G comes with less latency than the typical 60 milliseconds of 4G networks, according to a report from private market biztimes.com / 23

STORY COVER intelligence firm CB Insights. Finally, 5G networks are more flexible than 4G or WiFi networks, meaning more types of sensors and devices can be used. The combination of those technologies and artificial intelligence would allow for improvements in applications like remote medical consults in health care, fault detection and quality improvement in manufacturing, personalized video streaming in entertainment, and traffic pattern and object recognition in security. The company has also talked about how 8K technology leads to more precise surgeries and a reduction in blood loss. “Imagine a patient in critical condition and unable to be transported who could undergo surgery performed by a leading medical professional remotely through the combined application of 8K visuals and a lag-free, real-time 5G connection,” Woo said. “These are the types of advancements that we are cultivating and partnering with the developer community to work towards.” He also said having the only TFT-LCD factory outside of Japan, Korea, Taiwan and mainland China is significant on its own, but it will also drive innovation locally. “The proximity factor for an innovation cluster cannot be underestimated,” Woo said. “With Wisconn Valley, they will not have to rely on foundries or (fabrication facilities) many thousands of miles away and a 12 or 13 hour difference in time zone.” But to Willy Shih, a business management professor at Harvard Business School with experience in the display industry, all the talk about an 8K+5G ecosystem is just a smokescreen for what Foxconn is actually planning to do – although, he added, what exactly Foxconn is doing isn’t clear. “I think what’s happening is Foxconn is trying to figure out what they can put there, having made this commitment,” Shih said. “I don’t think Foxconn knows exactly what they want to put there.” He also questioned what role Trump’s rhetoric and actions on trade might have played in Foxconn committing to build in the U.S. Shih doubted there was an explicit quid pro quo, but said it could have helped keep the consumer electronics products Foxconn makes in China off initial tariff lists. “That’s why you want to be on good relations with people who start trade wars,” he said. Shih also described the project in a piece for Forbes as a “state visit project,” an ambitious deal announced during a visit by important politicians or government officials, with the details worked out later. “A lot of these things end up not happening or they morph into something else,” Shih said of similar announcements in China.

CHANGING DETAILS It is common for critics of the Foxconn deal to criticize the lack of detail surrounding the Foxconn project. When Gou and then-Gov. Scott Walker reached an agreement, they sketched it out on the 24 / BizTimes Milwaukee MARCH 18, 2019

governor’s letterhead in very basic terms. Those terms eventually became a memorandum of understanding and finally a contract, but that has not stopped critics from equating the deal to having been struck on the back of a napkin. Records released by the Wisconsin Economic Development Corp. last year, however, show Foxconn had given detailed thought to project specifics before the company announced the selection of Wisconsin. One presentation, based on one of the company’s plants in Japan, included a projected capacity of 6 million 65- or 75-inch LCD panels per year, a breakdown of the number and types of machinery required, expectations for liquid and solid waste, and a timeline for construction. The timeline, however, did not include any construction interruption for winter weather. Foxconn’s stated timelines were aggressive from the start, and while the likelihood of Wisconsin winters delaying construction is real, the bigger problem has been a shift in global LCD markets. Around the time Foxconn was searching for a U.S. location, competitors and the company itself were developing their own Gen 10.5 plants in Asia. “It’s just like any factory where it takes you a while to build it,” Shih said. “When times are good, everybody says ‘I’ve got to go build another factory’ but by the time the factory comes on stream, everybody else’s factory comes on stream and there’s way too much capacity and the prices collapse ... that was completely predictable at the time they announced it.” The price of a 65-inch LCD panel coming out of a factory has fallen from $408 in June 2017 to around $223 currently, according to Bob O’Brien, a partner at Display Supply Chain Consultants, which tracks the display industry. “The supply and demand balance has shifted pretty dramatically since early 2016,” O’Brien said, although he added that a number of other Gen 10.5 projects had already been announced before Foxconn. “This was pretty well predictable in 2016 and 2017.” A changing market prompted Foxconn to change its Mount Pleasant plans for a Gen 10.5 plant to a Gen 6 plant, with the company confirming the switch just before a ceremonial groundbreaking headlined by President Donald Trump. The shift meant, as Woo told BizTimes last year, that having a Corning Inc. glass plant on site would no longer be a necessity. The size of Gen 10.5 glass makes it impossible to ship, but Gen 6 glass sheets could be brought in from a Corning plant in Kentucky. The change solved a problem that emerged after the Foxconn announcement was originally made. Corning chairman and chief executive officer Wendell Weeks said his company would not add capacity without two of every three dollars coming from somewhere else. Suddenly, a potential $1 billion investment required nearly $700 million in subsidies and state officials did not want to provide additional incentives for Foxconn or a project tied to Foxconn.

With no Corning plant on the horizon, the state lost a potential avenue to recoup the costs of providing incentives. Foxconn itself will receive tax refunds, while taxes paid by employees, suppliers and employees of suppliers would help the state make its money back. The Corning decision took a major investment and 400 employees out of the equation. Shih pointed out that when China first started to ramp up its work in electronics manufacturing, the country did not have the supply chain in place. Instead, logistics companies in Hong Kong would put together kits with components and ship them to the mainland for assembly. Eventually, the government put local content requirements on electronics sold in the country, and towns and provinces gave incentives to lure supply chains and the thousands of jobs that came with them, Shih said. “That’s sort of the same vision of what could happen in Wisconsin, but the driver (in China) was there was economic incentives for a company who was manufacturing there to bring in the suppliers,” Shih said. “The question (in Wisconsin) is who is going to give them the economic incentives to move in.” Wisconsin officials were reluctant to offer any additional Foxconn incentives when Walker was governor. Current Gov. Tony Evers, a critic of the project who has discussed revisiting permits awarded under Walker, would seem even less likely to provide additional support. At the local level, the tax increment financing district used to support the project extends beyond the main Foxconn campus. The infrastructure being put in place for Foxconn is also intended to support suppliers and related businesses. It remains to be seen if ready-to-develop land is enough to attract those businesses. Racine County executive Jonathan Delagrave said the most important reason for the Foxconn campus to have major manufacturing is it would bring jobs to the region, but the second reason is that it attracts suppliers. More suppliers would help fund the infrastructure work already being done, although local officials say taxpayers are protected with Foxconn’s guarantees alone.

rOrSCHACH TESTS At least in the first year, Foxconn has fallen short of its aggressive job projections. The company announced in mid-January that it had created 178 jobs in 2018 and would “not seek” any incentives for the year. Never mind there were no incentives to seek because the company had fallen short of the 260 jobs required to receive any tax credits. The announcement represented a Rorschach inkblot test of sorts. To critics of the Foxconn project and the $3 billion in state incentives awarded to the company, the announcement represented an “I told you so” moment. Of course the company that had fallen short of projections in Pennsylvania, Brazil, Indonesia and India was doing the same in Wisconsin. To supporters, the announcement, and the hun-

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dreds of millions Foxconn has invested around the state, was proof that taxpayers are protected and the Foxconn project is having a ripple effect, the “Foxconn Bonus” Walker touted whenever possible. The reality is somewhere in between. The project is not yet an unmitigated disaster, but it also has a long way to go to live up to the promises made by Foxconn and its supporters. On last year’s pace – around 68 percent of the job minimum in the state contract – the company would reach 3,560 jobs by 2022, the first year the company needs to hit 13,000 jobs to earn all of its payroll tax credits. Even at that pace, Foxconn

So far, a single 120,000-square-foot building is the only building completed on Foxconn’s roughly 800-acre campus in Mount Pleasant. biztimes.com / 25

STORY COVER could earn $528 million in tax credits for capital spending, if it invested $3.5 billion in its Mount Pleasant campus. The company has repeatedly said it remains committed to creating 13,000 jobs in Wisconsin. The possibility of paying out millions in incentives even if Foxconn falls short of its hiring goals only reinforces the importance of other developments following the Foxconn project. At the same time, Foxconn executives have discussed an increased research and development focus for the project, fueling speculation that manufacturing would not play a major role. The same manufacturing needed to attract other developments. Wenjie Sun, an associate professor in geospatial science, computer science and Asian studies at Carthage College, said the research focus fits with global trends in the electronics industry, as lower-end production is increasingly shifting either to India or southeast Asia, while innovation and research and development work is shifting to developed countries in search of skilled labor. “This is not surprising from an economic geography standpoint because that’s what countries like the United States are providing,” Sun said. She added an increased focus on R&D could make it more likely Foxconn would attract people with advanced degrees from northern Illinois or outside the region entirely. Lake County, Illinois, just across the border, happens to have more people who got their first degree in computers, mathematics, statistics or engineering than Milwaukee, Racine and Kenosha counties combined, according to U.S. Census data. Delagrave said he has been in communication with Foxconn on a weekly basis and the company’s commitment to manufacturing has not wavered. He also said research and development work was a major part of the project from the start. “Yes, that manufacturing is critical for a variety of reasons, but we knew this was going to be a package deal and that’s why we’re excited about this opportunity that we’re going to be able to get,” he said.

FLYING, BUILDING AND rEDESIGNING When Foxconn announced its 2018 hiring, the company also said it had made a strategic decision to broaden its investment throughout Wisconsin. The company has already spent around $48 million on real estate for its innovation centers around the state, including almost $7.5 million on two buildings in the city of Racine. The Racine buildings are intended to focus on smart city projects, a portion of the 8K+5G ecosystem Foxconn is envisioning. Delagrave said the facilities would also address autonomous vehicles, with a test area near the lake to start and the possibility of a route to the Mount Pleasant campus in the future. Racine mayor Cory Mason, a Democrat and former state lawmaker who voted for the Foxconn incentive package, said the city will be able to take advantage of its existing assets to improve the lives of residents. Those assets include the water utility, transit system and public safety infrastructure, but also things like 27 miles of fiber optic cables connected to around 4,000 light poles. Those features provide connectivity and a place to mount sensors and antennas. Mason said he wants Racine to be an early adopter of technologies like 5G, regardless of Foxconn’s presence. He said technology can help address the challenges people face on a day-to-day basis. “What we don’t want to do is automate inequality or expand the digital divide that exists right now,” Mason said. “We know that if we’re going to have these assets come to the community, they have to be broadly shared and available to everyone if you want to reap the benefits that smart cities promise.” Mason said the region is well poised to take advantage of Foxconn and counteract the effects of the deindustrialization that has taken place in the area during the last few decades. “The idea is really to change the technology ecosystems for the entire region so that this kind of innovation comes to the area,” he said.

With or without Foxconn, McLees said there is reason for Wisconsin’s manufacturers to start working more collaboratively. The vendor readiness program he helped develop for Foxconn to use in the state is designed for any OEM to use. The program identifies top-performing suppliers based on their core capabilities, customer feedback and ability to adapt to changing technology. It then uses the data to identify shortcoming in operations, talent or technology. Service providers and technology companies are then invited to work with the manufacturers to improve the overall supply chain. Individual companies could identify their own shortcomings, find a service provider to work with and try to do it on their own, but McLees says the program benefits from the data and experience of a wider group of companies. “It’s extraordinarily inefficient right now and we’re looking to streamline all of that through what is truly, buzzword or not, an ecosystem approach,” he said. Bill Mitchell, a Foxconn executive who has worked with McLees and joined him for presentations on the program, told attendees at the Manufacturing Matters conference in Milwaukee recently that the pace of change requires companies to be flexible and collaborative. Mitchell is CEO of Aguila, a Foxconn subsidiary that handles logistics and distribution. He was also part of site selection efforts when the company initially decided to locate a $10 billion manufacturing campus in Wisconsin in the summer of 2017. “In just that amount of time, over the last couple years, so much has changed about the way things are done and what gets done,” he said. Foxconn executives have also been instructed to localize their suppliers where possible, hire the best and transform the company into a solutions provider. Doing all of that, and doing it quickly, means the company operates like a multi-billion dollar startup that doesn’t always have all the answers, Mitchell suggested. “What we’re doing here,” he said, “it’s kind of like we’re building the airplane while we’re flying it and we’re redesigning it.” n

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Building Foxconn infrastructure is a complex, multimilliondollar effort By Arthur Thomas, staff writer IF THERE’S ONE PROJECT related to the planned Foxconn Technology Group campus in Mount Pleasant that most area residents have been exposed to, it is likely the expansion of I-94 in Racine County. But beyond the orange barrels lining the interstate, which was part of the Wisconsin Department of Transportation’s long-term expansion plans for the freeway, with or without Foxconn, millions of dollars are being spent on infrastructure projects in and around the Foxconn site. Among roadwork, gas, electric, water, sewer and fiber optic, there is plenty going on in the southwestern corner of Mount Pleasant. Claude Lois, project director for Mount Pleasant, said stakeholders have been holding weekly coordination meetings to make sure everyone is on the same page.

“There are a lot of people working in sometimes a very similar area,” he said. The original tax increment financing district Mount Pleasant approved for the Foxconn project called for $764 million worth of investments to make the development possible. According to the latest estimates from municipal advisory firm Ehlers Inc., the village’s financial advisor, the investment will now be about $912 million. Local officials emphasize that the TIF district is set up so the value of Foxconn’s development alone will pay for it. The company has guaranteed its main campus area, referred to as area I, will have an assessed value of $1.4 billion by 2022 to generate enough property tax revenue to cover the TIF costs. “Everything we’re doing out there is being totally funded through this development,” Lois said. “It’s not being funded by the locals; it’s not going to be put on your sewer bill or anything like that. There should be no (tax) increase to any of the residents.” The higher total includes an almost $38 million increase in spending on land acquisition and relocation costs, now projected to reach $206 million. Another $12.7 million increase comes from water infrastructure and a $12.3 million increase in spending on sewer infrastructure.

Mount Pleasant has been paying property owners 140 percent of fair market value, plus $50,000 per acre for excess land, to acquire land in the project area. The increased sewer and water costs come from expanding the investment to allow the Village of Caledonia to connect to the systems. Caledonia will make roughly $30 million in payments to Mount Pleasant to help cover the increased costs. The increased land acquisition, sewer and water costs led to higher interest costs over the long term. Interest on debt is now projected to be around $248.6 million, an $82 million increase over the original plan. The increased debt service payments prompted local officials to project the TIF district will remain open for a full 30 years, five years longer than originally anticipated. The longer period adds operating costs to the district, but it also opens up the possibility of funding investments in fire and police protection through the district. The costs are covered by Caledonia’s payment, a $128 million increase in special assessments to be paid by Foxconn and an estimated $650 million in tax increment-related payments from Foxconn’s development. One element of the local investment that re-

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mains the same is the projected $11.5 million in spending on roads. The state took over jurisdiction of local roads for $134 million in projects while also overseeing the expansion of I-94. The I-94 North-South project was originally scheduled to be complete by 2016 but was delayed in favor of other projects, particularly the Zoo Interchange reconstruction. When the possibility of Foxconn arrived, the I-94 North-South project rocketed back up the priority list. The legislation authorizing Foxconnâ&#x20AC;&#x2122;s incentive package also authorized more than $250 million in bonding to help fund the freeway expansion project, provided Wisconsin also got

Work to expand I-94 in Racine County is expected to be fully complete by 2021.

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federal money for the project. The state requested more than $246 million from a federal Department of Transportation grant program. Work on the project started before the state heard about the result of the grant application. The program received 234 applications for the 2018 funding round and the I-94 expansion was one of 26 to receive funding. However, the state received $160 million, not its full request. Still, then-Gov. Scott Walker said all lanes of I-94 would be open by Memorial Day 2020 and the project would be fully complete by 2021. His DOT said excess bonding revenue would allow the state to make up the shortfall from the grant project without delaying other projects. The three main bid packages for the project have already been awarded. Chicago-based Walsh Construction was named the prime contractor for the northern segment with a $161.6 million bid. Brownsville-based Michels Corp. was named the prime contractor for the central and southern segments with $80 million and $168.9 million bids. Across the three segments, 60 companies have been named as subcontractors, including 50 from Wisconsin. A number of other projects along I-94 have also been awarded, including the frontage roads from

Highway KR to Highway 20 and interchanges at Highway K and at Ryan Road. The major project left on the state DOT’s master contract schedule is the Highway 20 interchange, with bids scheduled to open in early 2020. The 16.5 miles of work the department is doing on local roads also has a long way to go, including the construction of Wisconn Valley Way, a new road that will run along the western end of the planned Foxconn campus from Highway KR to Highway 11. There are also major projects planned on Braun Road, Highway 11, International Drive, Highway H and Highway KR. Perhaps less visible than all of the ongoing roadwork are the sewer and water systems being extended to the Foxconn project area. Lois emphasized that the project will serve more than the Foxconn campus. “It’s feeding the whole area, not just Foxconn,” he said. “The system has been designed to accommodate all of the holes that Racine water has in some of their areas of coverage, as well as, obviously, sewer.” Lois said the first two phases of sewer work, along Highway H and along Highway KR, would be wrapping up in March. A third phase running from Highway H east toward the Pike River will likely be

released for bidding this spring and start later this year. A fourth phase would likely also go out for bids at some point this year. The initial sewer projects have been particularly deep – around 50 feet – so Lois said the field of potential bidders has been somewhat limited. The future projects do not require going to those depths, so he expects bidding interest to pick up. Water projects have seen more interest, with six or seven bidders on each contract, Lois said. The projects extend water service to the Foxconn campus and surrounding area. The campus itself straddles the divide between the Lake Michigan and Mississippi River basins, and the Wisconsin Department of Natural Resources approved a 7 million gallon-per-day diversion of Lake Michigan water under the 2008 Great Lakes Compact. But how much water Foxconn will actually need is unclear. For starters, the company said it plans to invest $30 million in a zero liquid discharge system that would dramatically reduce its water needs. Foxconn has also changed the kind of LCD manufacturing facility it will build from one focused on larger panels to a smaller one that will not require a glass plant on site. “We’re still working with them to verify the total amount of water that they might need,” Lois said. n

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BUILDING & CONSTRUCTION - FOXCONN

What do the next 18 months hold for Foxconn construction? BY ARTHUR THOMAS, staff writer FOXCONN TECHNOLOGY GROUP’S PLANS for a $10 billion LCD manufacturing campus in Mount Pleasant were remarkable in 2017 and 2018 for a number of reasons. The sheer size and scale of the project was unlike anything else contemplated in the state’s history. The incentive packages offered up by state and local leaders matched that size and drew their own controversy. Given the size, perhaps one of the most remarkable elements of the project was its speed. Local elected leaders in Racine County made a big deal of the fact that construction equipment arrived on site a year after the first meeting between Foxconn and then-Gov. Scott Walker. It was less than a year from the project announcement at the White House to a groundbreaking that included President Donald Trump. The first building, a 120,000-square-foot

Construction equipment arrived on site at Foxconn’s Mount Pleasant Project one year after the initial meeting between the company and state.

multi-purpose facility, was completed late last year. Company leaders often remark to local officials about how they have learned to operate at the speed of Foxconn. In 2019, however, the speed of the Foxconn project, or perhaps the lack thereof, might be more consequential. A slowdown in the Chinese econo-

my, global trade concerns and a shifting market for display screens have all conspired to change the economics of the project. In January, Foxconn first acknowledged it was shifting its hiring plans and then said it was reconsidering whether it would make LCD screens before ultimately recommitting to its plans. The company

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also laid out plans for specific building projects it plans to complete in the next 18 months. Those projects include a liquid crystal module backend packaging plant, a high-precision molding factory, a system integration assembly facility, a rapid prototyping center to work with startups, a research and development center, a data center located in or near the Mount Pleasant campus, and a town center to support those working in the park. Racine County executive Jonathan Delagrave said if local leaders had struck a rigid deal that did not allow for change, local residents would – rightly, in his view – criticize the project. “We want them to be fluid and we want them to create products that are going to be relevant,” he said. While the ambitious plans Foxconn originally laid out had a long-term goal of the campus being operational several years in the future, the list of projects for the next 18 months gives the overall endeavor a more defined set of objectives for the short-term. As of early March, no announcements had been made about which of the seven projects would be constructed first. There are plenty of other projects beyond what is being built on the main Foxconn campus. American Transmission Co., for example, is building a substation just east of the campus. A 538-unit

multi-family housing project was recently proposed a little farther east, along 90th Street and Braun Road. Several health care developments are in the works for the area. Out-of-state and local developers alike have taken a renewed interest in downtown Racine and a number of industrial projects have popped up closer to the Foxconn campus. “We’ve certainly seen more development interest in the City of Racine in the last year than we’ve seen in the previous 30 years,” Racine mayor Cory Mason said. He noted it is important to make sure the increased development interest translates into opportunity for everyone in the city. Racine and its partners have already trained about 100 people in the building trades, with a particular focus on water-related infrastructure. Foxconn, too, has dedicated space at its Mount Pleasant construction site to training. More than 850 people have worked on the project already, but the original plans called for more than 10,000 construction jobs. Delagrave said it is important to have communication with county residents to bring everyone along as development continues. He added the first priority should be making sure existing businesses are not hurt by Foxconn’s arrival.

“What we don’t want and what’s not going to happen is we’re not going to have a new normal of construction and that’s just the way it is. We’re efficiently going to get that done,” he said. The prospect of billions of dollars in development would seem to threaten the county’s quality of life, but Delagrave said: “If done properly … we’re going to have a better way of life.” The controversy over the project, however, has not been limited to the state incentive package or its ties to President Donald Trump. The Gimlet Media podcast “Reply All” in December put a national spotlight on Mount Pleasant’s local politics. Homeowners in the path of the mega project have been featured in a number of magazines and some have even gone to court to try to block the sale of their properties. Delagrave said he understands the criticism of the project, but said the lack of challengers in upcoming elections suggests people approve of the project overall. “I was fortunate enough that I don’t live in that area, so I think its fair criticism and I think that any time that change happens there’s going to be varying factions, rightfully so, that are concerned and have criticism. But I do think, overall, the people of Racine County believe in the project,” Delagrave said. n

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Strategies COACHING

Mentoring in the Cyber Age Some need help learning how to deal with others in person OUR CURRENT CYBER AGE, fueled with an incredible bounty of computer-driven information and facilitated by a seemingly endless number of ways to connect and communicate, is a tribute to human progress. Why then, in the face of such richness, do studies show that we are more isolated, lonely, depressed and disconnected than ever before? Part of the answer may lie in the fact that managing a relentless stream of data through email, texts, IMs, alerts, news feeds and the like requires enormous attention, and often in split second increments. Constant use of such tools is exhausting and can lead to feelings of futility when things that needed attention on any given day were ignored, forgotten or purposely avoided. It seems the tools fall short of a more basic need. Thank goodness for mentoring! Mentoring has long been embraced as a way for more experienced professionals to assist rising stars in expanding their professional networks, learning the ropes inside an organization, structuring and delivering impactful presentations, and more. Here’s where the Cyber Age complicates things. Technology has fundamentally changed the game. Electronic networks span the globe. Information and expertise is widely available. Research studies and expert opinion are everywhere. Who needs a mentor? The short answer is that all can benefit.

Mentoring can bridge a gap between haves and have-nots, and I’m not talking about wealth or opportunity. One of today’s biggest and most dangerous gaps is that between maturity and its lack. Immaturity is the hallmark of the undeveloped. It is not negative in itself; it is simply a state of being. Immaturity becomes negative – even dangerous – when the immature individual believes he or she is more developed, knowledgeable or experienced than he or she really is. When the immature person seeks to establish a position of power, exercise authority or demand fealty, others react unfavorably. Mentors can help the maturing process in significant ways. Engaging in personal dialogue is a great starting point. Sitting with another human can be enormously uncomfortable, especially if you are used to communicating electronically. In some cases, personal interaction can feel like unnecessary exposure – a violation of your space physically, intellectually and emotionally. Learning to master this discomfort gives you a powerful advantage over those who cannot or will not do this work. Using a mentor to sort your thoughts, acknowledge your emotions and choose a next step can lead to an exploration of the implications, repercussions and potential unintended consequences of something you might say or do in haste. You can, for example, decide how to not take things personally, dealing with disagreeable people without becoming a jerk yourself. Choosing silence may be a wiser strategy than blasting out a snarky remark. Stepping back from an immediate moment to put a challenge into greater perspective may reveal tangential relationships, additional resources and even a surprise angle that may resolve something that felt impossible to overcome. Recognizing that every human you encounter has had a different experience of life than yours can open many doors. Yes, they can learn from you. But they can teach you, too. These are the kinds of explorations a mentor can offer. Additionally, a mentor can help you shape your professional reputation, which is the product of your speech, actions and mannerisms.

The words you choose, the way you carry yourself (posture, gestures), and how you engage with others (either listlessly or with energy) create messages that shape others’ impressions of you. Wouldn’t it make sense to create habits that communicate power, intentionality and purpose? Your mentor holds a mirror. Now, for all those who might be called upon to mentor another, please give careful thought to the responsibility you accept when you agree to shepherd someone. Serving as a mentor is not the time to prove your smarts, highlight your remarkable network or crow about your stellar accomplishments. It’s time for you to learn, too! Your gifts of active listening, asking relevant questions to encourage deeper thought, and respectfully appreciating your protégé’s knowledge and experience create the kind of relationship so many long for. In today’s noisy and distracting Cyber Age, the greatest gift of mentoring is providing a satisfying human experience. n

SUSAN MARSHALL Susan Marshall is an author, speaker and the founder of Backbone Institute LLC. For more information, visit backboneinstitute.com. biztimes.com / 33

Strategies MARKETING

The value of internal marketing Keep great employees by selling your company culture from within IT’S HARDER THAN EVER to find good, qualified people. That’s why “internal marketing” – that is, promoting your company to your employees – is so important. Despite what we may think, the reason people quit one job to take another often has little to do with pay. Research has shown that job satisfaction is a function of just three things: 1. Respect from peers and superiors 2. Cooperation from coworkers 3. Compensation AND OTHER REWARDS Internal marketing is a way to promote your company to your company. Ultimately, the goal is to have your employees feel good about where they work. Research shows that happy employees are more productive. Here are five internal marketing tools you can use to improve communication, build a sense of spirit in the workplace, and make your employees feel better about their jobs, and their employer. 1. THE COMPANY NEWSLETTER Some companies produce a newsletter designed to foster good relations with customers 34 / BizTimes Milwaukee MARCH 18, 2019

and prospects. And that’s good. Newsletters are an ideal way to keep in touch with the market, to keep your company’s name top-of-mind. But an internal newsletter just for employees is a good idea, too. It lets everyone in the company know what’s going on. It includes employees’ birthdays, anniversaries, favorite recipes and even postcards from their vacations. A newsletter promotes goodwill, too. It leads to better communication among departments. And people love it. 2. BUY LUNCH Once a week, hire a caterer to bring in lunches. Offer good, wholesome food free of charge to all employees. It’s not as expensive as you might think, and this simple idea has a number of benefits. It shortens lunch hours by reducing travel time, it shows respect for your employees, and it encourages mingling and sharing of information, ideas, problems and solutions. 3. SPONSOR A SPORTS TEAM How about a company bowling, softball or basketball team? It’s a great idea that helps foster a sense of fellowship among coworkers. It has an added benefit, too. It puts your company name out into the community (emblazoned on the team uniforms) and builds awareness for your firm among an important group of people: potential future employees. 4. HOLD A PHOTO CONTEST Everybody has a camera these days. And every company uses photos in its brochures, website and advertisements. Rather than pay for stock photos, why not use your employees’ snapshots? At Abbott Laboratories, Karen Grishaber, former manager of brand communications, once put out a call to its 65,000 employees worldwide. “We expected maybe 50 or so photos we could use,” Grishaber said. “We received nearly 4,000 photographs. It was a chore to categorize them – people, places, objects and the like – but now we have them indexed and can look them up quickly to pick the ones we want

to use in our brochures and online communications...I’ve heard from Abbott people all over the world. They loved the contest.” 5. SCHOLARSHIP One way to assure lasting loyalty is to offer a college scholarship to the children of employees. To qualify, students submit their grades and write an essay. The parent of the winner is notified and the student is given the award as he or she sets off for college in the fall. The parent is grateful to the employer, and is unlikely to consider leaving for another job while the student is receiving a scholarship. An added benefit: the student becomes an advocate for your company, and may even become a loyal employee in the future. It’s a competitive market, and employers must be willing to pay competitive salaries. But companies that build a sense of pride in the workplace through internal marketing efforts will fare better when it comes to retaining their talent. Those that don’t will continue to lose employees to offers of marginally higher pay and the hot new benefit of the day. n

ROBERT GREDE Robert Grede is the author of “Naked Marketing – The Bare Essentials” and “The 5 Kick-Ass Strategies (Every Business Needs).” He operates The Grede Co., a Milwaukeearea consulting firm specializing in marketing and strategic planning. He can be reached at rg@thegredecompany.com.

A BRIEF CASE

How do I develop our “why” we exist as a company?

Mark Mohr President and chief executive officer First Bank Financial Centre “The idea of discovering ‘why’ a company exists has become popular, thanks to author and speaker Simon Sinek. Sinek argues that people don’t buy what you do, but rather why you do it. For First Bank Financial Centre, discovering our ‘why’ began with an examination of our mission statement. A well-crafted mission statement brings customers, employees and company leaders together under a succinct statement that defines what a business stands for. In short, it’s why you exist. “In 2019, we’re celebrating our 160th anniversary, and for generations we’ve offered quality financial products and services. We also donate money to area nonprofits and our employees spend over 15,000 hours a year volunteering. But that’s not why we’re in business; rather, that’s simply what we do. “The real, and harder, question to answer is why we offer those products and services, and support local organizations. We help people save for future goals, buy homes, and start and grow businesses. We support organizations that have a true impact on the lives of those in the communities we serve. “Our ‘why,’ and our mission statement, is ‘Make Lives Better.’ These three words declare to our customers and communities why we’re in business, and provide a mandate to our employees to positively impact those around them.”

Ross Bjella Kirk Gramoll Owner TeamLogic IT “As the owner of a new technology firm, developing the ‘why’ our company exists started with crafting a mission statement. While there isn’t necessarily a formal reason for a mission statement, it’s an important exercise that helps employees and key stakeholders to grapple with the ‘big questions’ and crystalize ideas on what really matters. It’s a chance to explore both on-the-ground reasons behind our company’s existence and the higher purpose we hope to imbue. Our mission statement has also become a critical reference point to measure reality against our goals. “At TeamLogic IT, our mission is to ‘make technology an asset for small and medium-sized businesses by providing solutions for companies to be more efficient, secure and successful.’ By sharing a common purpose between employer, employees and our clients, our work extends beyond punching the clock. Our mission is tied to the success of clients: their wins are our wins; same for their losses. “Additionally, our core values (concepts like respect, empowerment and a commitment to excellence) were developed during a team meeting that required real, transparent conversations. By creating a dialogue about the ‘why’ behind work, our team can hold the business accountable and, ultimately, work more effectively. A common vision touches on all aspects of business – from recruitment to client relationships to how we define success.”

Founder and chief executive officer Alithias Inc. “Alithias provides patient advocacy services to help employees navigate our complex health care system. We found that the better we understood our customer, the more passionate we became about our ‘why.’ “Early-stage companies often create solutions that address a specific market opportunity. The solution is often more about improving how something is done, such as by developing a new technology or more efficiently providing a service. At Alithias, we initially thought our ‘why’ was simply ‘to create better software.’ But as we observed how customers used the software and asked many, many questions to understand their true needs, our ‘why’ changed dramatically. “Alithias’ driving mission is to provide our clients an excellent health care benefits experience, from certifying the procedure to ensuring all the accompanying paperwork is processed correctly. Creative software is just one way we do this. Understanding what our customers really wanted allowed us to create additional high-value services, including some that had nothing to do with software. “Understanding the ‘why’ required a commitment to understand our customers’ deepest needs. The result was a solution much bigger than our initial idea.” n

biztimes.com / 35

Marketplace

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GET THE WORD OUT! News? Press Releases? Awards? Show them off in BizTimes’ new BizUpdates section. Submit your company news at at biztimes.com/bizconnect

36 / BizTimes Milwaukee MARCH 18, 2019

BizConnections NONPROFIT MILWAUKEE FILM EXCEEDS CAMPAIGN GOAL FOR ORIENTAL THEATRE RESTORATION Milwaukee Film has surpassed its $10 million capital campaign goal to restore the Oriental Theatre and provide the nonprofit with its first-ever operating reserve. The campaign has been underway since 2017, when Milwaukee Film entered into a 31-year lease to operate the 92-year-old Oriental Theatre at 2230 N. Farwell Ave. The organization assumed operations of the theater in July 2018. The campaign drew gifts from 900 contributors and brought in a total of $10.03 million. Lead donors to the campaign included Milwaukee County Executive Chris Abele, Donald and Donna Baumgartner,

the Herzfeld Foundation, the Sheldon and Marianne Lubar Charitable Fund, Allen H. (Bud) and Suzanne L. Selig, and The Yabuki Family Foundation. Abele made a personal contribution of $2 million to kick off the campaign, the largest gift in Milwaukee Film history. The Seligs offered a $1.5 million matching grant on opening night of the 2018 Milwaukee Film Festival. And a “significant pledge” from The Yabuki Family Foundation allowed the campaign to exceed its goal, the organization said. The campaign will support the restoration of the Oriental Theatre and provide financial stability for the organization. — Lauren Anderson

c alendar Variety the Children’s Charity will host its Mommy & Me Sweetheart Dance on March 23 from 11 a.m. to 1 p.m. at the Ingleside Hotel, 2810 Golf Road in Pewaukee. The event will include a live DJ and dancing, lunch, cookie decorating, crafts, face painting and a photo booth. All proceeds will benefit children with special needs and their families. More information is available at varieytwi.org. The 2019 Milwaukee Awards for Neighborhood Development Innovation (MANDI) Awards Gala will be held on April 11 at 5:30 p.m. at Potawatomi Hotel and Casino. The annual Local Initiatives Support Corporation Milwaukee program recognizes businesses, nonprofit organizations and individuals involved in improving conditions in Milwaukee’s neighborhoods. More information is available at lisc.org.

D O N AT I O N R O U N D U P National Endowment for the Arts gave a $25,000 grant to Historic Milwaukee Inc. for Doors Open Milwaukee. | USO Wisconsin raised $25,000 in gift cards and cash donations to support about 350 U.S. Coast Guard families during the partial federal government shutdown. The donations were given to Coast Guard Petty Officers Association of Western Lake Michigan. | The Milwaukee Turners gave an $8,000 donation to America’s Black Holocaust Museum. | Herb Kohl Philanthropies funded 924 projects across the state totaling $507,000 through crowdfunding site DonorsChoose. | Marquette University’s College of Health Sciences professors John Mantsch, Joseph Byonanebye, Nilanjan Lodh and Joshua Knox have received Marquette’s 2019 Way Klingler Teaching Enhancement Award of up to $20,000.

nonprofit

SPOTLIGHT

WISCONSIN PHIL ANTHROPY NET WORK 15850 W. Bluemound Road, Suite 204, Brookfield (262) 317-6000 | wiphilanthropy.org Facebook: facebook.com/wisconsinphilanthropynetwork

Year founded: 1978 Mission statement:

WPN’s mission is to strengthen, support and promote giving in the state of Wisconsin. Our vision is to foster a statewide culture of philanthropy with an emphasis on equitable and inclusive practices, while advancing the work of our members through highquality philanthropy education, strategic partnerships, leadership development and events. WPN’s goal is to help make Wisconsin a great place to live and work for current and future generations.

and facilitating “next action” discussions and collective impact. Employees at this location: Four Executive leadership:

Tony Shields, president and chief executive officer Board members:

Steve Goldberg, Kathryn Leverenz, Erin Frederick, Ken Robertson, Julie Bauer, Melissa Baxter, Patricia Contreras, Curt Detjen, Lisa Hiller, Amy Kerwin, Jason Kohout, Jay Scott and Bob Sorge.

Primary focus:

Is your organization actively seeking board members for the upcoming term?

As the only Philanthropy-Serving Organization in the state, WPN leverages its expertise in the field of charitable giving to provide our members with the right information, data and analysis to become effective philanthropists, maximizing the collective impact throughout Wisconsin.

WPN continuously strives to broaden its board of directors in terms of knowledge, skills and diversity. However, board members or the organizations they are associated with must also be members of WPN. Ways the business community can help your nonprofit:

Other focuses:

Become a member. The WPN team is always excited to meet new companies, foundations and families who are committed to philanthropy. Whether you give $5 or $5 million, we believe in supporting the everyday philanthropist and striving to improve the lives of others.

Creating strategic programming designed to achieve excellence in “grant-craftsmanship” and funding effectiveness; advancing philanthropic initiatives through thought leadership, education and events; creating opportunities for philanthropic partnerships;

biztimes.com / 37

BizConnections PERSONNEL FILE ARCHITECTURAL MILLWORK

CONSTRUCTION

CONVENTIONS

MEDICAL BILLING

Glenn Rieder, West Allis

CG Schmidt, Milwaukee

The Wisconsin Center District, Milwaukee

Health Payment Systems, Milwaukee

Shamrock Metals LLC recently named Dan Carey president. Carey has worked with Glenn Rieder for 10 years and will have overall management responsibility for the newly formed division.

BANKING

Bell Bank Mortgage, Brookfield Lee Turner was recently hired as vice president/ market manager at Bell Bank Mortgage. He will be focusing on recruiting, hiring and training residential mortgage lenders.

BANKING

First Business Bank, Brookfield First Business Bank recently promoted Alicia Buttchen to the position of assistant vice president-treasury management. She joined the company in 2014 and has more than 17 years of experience.

Neureuther

Zahn

CG Schmidt recently hired Ben Neureuther as a project manager. In his new role, Neureuther will plan, organize and control all resources for the successful execution of construction projects. He will also serve as the primary point of contact for owners and lead project teams during construction to ensure project quality, schedule, cost control, safety and customer satisfaction objectives are met. Allison Zahn was also hired as a marketing coordinator. In her new role, Zahn will contribute to the preparation of proposals and interviews, as well as trade show and conference coordination, and marketing communications.

CONSTRUCTION

MSI General, Oconomowoc

The Wisconsin Center District has promoted Sarah Maio to vice president of marketing and communications. Maio has worked with the WCD for the past three years as director of marketing. Her experience includes a variety of product lines and business models, including arts, nonprofit, franchise and global brands.

INSURANCE

R&R Insurance, Waukesha

Ripp

Veith

David Ripp and Sam Veith were recently hired as commercial account executives for R&R Insurance.

MSI General Corporation recently promoted Dave Luterbach from project estimator to manager of the estimating department. Luterbach will continue to estimate, bid and award project subcontracts, and will be responsible for developing and maintaining subcontractor relationships.

Health Payment Systems recently named Mark Xistris chief strategy officer. In his new role, Xistris will lead the continued evolution of HPSâ&#x20AC;&#x2122; Wisconsin business strategy focused on expanding its statewide provider network to bring new cost-effective solutions to the Wisconsin marketplace.

SOFTWARE

Vrakas/Blum Computer Consulting Inc., Brookfield Vrakas/Blum Computer Consulting Inc. recently hired Stacy Schultz as director of sales and alliances. Schultz specializes in sales consultation, implementation, support of business software solutions and alliance partner relationships. Schultz works with clients in a wide range of industries and has a special expertise in manufacturing and distribution.

New Hire? Share the news with the business community! Announce new hires, promotions, accolades, and board appointments with BizPeople. Visit biztimes.com/bizconnect to submit your news!

SBA LOANS: DECEMBER & JANUARY The U.S. Small Business Administration approved the following loan guarantees in December and January.

$100,000, Wisconsin Women’s Business Initiative Corp.;

JEFFERSON COUNTY

Doodle Hog LLC, 2364 N. 117th St., Wauwatosa, $80,000, JPMorgan Chase Bank;

MicroNet Electronics LLC, 111 N. 4th St., Watertown, $27,000, Partnership Bank; KENOSHA COUNTY

Public Craft Brewing Co. LLC, 716 58th St., Kenosha, $125,000, Wisconsin Women’s Business Initiative Corp.; MILWAUKEE COUNTY

AM Painting & Drywalling, 9401 S. 13th St., Oak Creek, $50,000, Landmark Credit Union; Belleview Enterprise LLC, 8024 N. 94th St., Milwaukee, $75,000, Summit Credit Union; Carter’s Quality Care LLC, 4058 N. 89th St., Milwaukee,

CMG4 LLC, 9418 W. Schlinger Ave., West Allis, $50,000, The Huntington National Bank;

Hangout MKE Café & Lounge Co., 1819 N. Farwell Ave., Milwaukee, $25,000, The Huntington National Bank; JTSpaeth Inc., 330 E. Kilbourn Ave., #950, Milwaukee, $565,000, Byline Bank; Star Trucking LLC, 11141 W. Forest Home Ave.; Franklin, $150,000, Waukesha State Bank; State Disposal Services LLC, 9530 N. 107th St., Milwaukee, $125,000, Byline Bank; This is It Inc., 418 E. Wells St., Milwaukee, $75,000, Park Bank;

Wilcraft Can LLC, 2480 W. Grays Lane, Oak Creek, $30,000, Community State Bank; Wire Wright LLC, 7908 W. Wright St., Milwaukee, $68,000, U.S. Bank; OZAUKEE COUNTY

EMBerg Ventures LLC, 469 Beechwood Drive, Cedarburg, $150,000, United Midwest Savings Bank; Mequon FADS LLC, 10934 N. Port Washington Road, Mequon, $350,000, The Huntington National Bank; Mequon FADS LLC, 10934 N. Port Washington Road, Mequon, $50,000, The Huntington National Bank; RACINE COUNTY

BJ’s LaFayette Fuel Plaza Inc., 815 River Ridge Circle, Waterford, $270,000, First

Bank Financial Centre; Cash Facility Services LLC, 301 Haynes Court, Burlington, $150,000, United Midwest Savings Bank; Eagle Disposal Inc., 21107 Omega Circle, Franksville, $350,000, First Bank Financial Centre; MARCK Enterprises LLC., 1201 Milwaukee Ave., Suite A, Burlington, $100,000, The Huntington National Bank; WASHINGTON COUNTY

Michael W. Wulff JR, W189 N11100 Kleinman Drive, Germantown, $15,000, Associated Bank; WAUKESHA COUNTY

Bluegreen LLC, 2110 Pewaukee Road, Waukesha, $271,500, Waukesha State Bank;

CC Retail Holdings LLC, 18000 W. Bluemound Road, Brookfield, $228,500, U.S. Bank;

Lake Country Custom Cabinets LLC, N92 W17524 Appleton Ave., Menomonee Falls, $50,000, Citizens Bank;

C. Hoffmann Service Inc., 1 N64 W23876 Main St., Sussex, $268,000, Summit Credit Union;

LNK98 LLC, 2405 N. 124th St., Brookfield, $90,000, Wisconsin Women’s Business Initiative Corp.;

DMDZ Inc., 206 Enterprise Road, Delafield, $100,000, U.S. Bank;

NCOL Investments LLC, 2310 Hillsdale Drive, Brookfield, $440,000, Waukesha State Bank;

J & J Heating and Air Conditioning Inc., 3260 126th St., Brookfield, $250,000, Wisconsin Bank & Trust; Fox TLC Inc., 1288 Summit Ave., Oconomowoc, $199,800, Ixonia Bank; J & J Heating and Air Conditioning Inc., 3260 126th St., Brookfield, $1.9 million, Wisconsin Bank & Trust; Lake Country Custom Cabinets LLC, N92 W17524 Appleton Ave., Menomonee Falls, $261,000, Citizens Bank;

Settimi Chiropractic & Wellness, 17280 W. North Ave., Suite G10, Brookfield, $330,000; Spring City Aviation Inc., 2451 Aviation Road, Waukesha, $1 million, Waukesha State Bank; Vesta Memory Care LLC, 3965 Bradee Road, Brookfield, $70,000, Wisconsin Women’s Business Initiative Corp.

Commercial banking with Wisconsin vision.

Local expertise to help Wisconsin businesses prosper. The BMO Harris Commercial Banking team in Wisconsin has deep, statewide roots and expertise in a range of industries. Combined with our decades working locally, and supported by strong cross-border capabilities, we’re uniquely positioned to help companies uncover more possibilities here at home and all the places you do business. bmoharris.com/commercial Banking products and services subject to bank and credit approval. BMO Harris Commercial Bank is a trade name used by BMO Harris Bank N.A. Member FDIC

BizConnections VOLUME 24, NUMBER 23 | MAR 18, 2019

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 | advertising@biztimes.com EDITORIAL: 414-336-7120 | andrew.weiland@biztimes.com REPRINTS: 414-336-7100 | 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 Maredithe Meyer maredithe.meyer@biztimes.com REPORTER Arthur Thomas arthur.thomas@biztimes.com

— This photo is from the Milwaukee Public Museum’s Photo Archives collection.

COMMENTARY

Trump needs big trade win SO FAR, President Donald Trump’s trade wars aren’t going very well. Last fall, he reached an agreement with Mexico and Canada to replace the North American Free Trade Agreement with a new agreement. But the deal has not been ratified by Congress and with Democrats now controlling the House of Representatives, it could be awhile before it’s approved. Trump still doesn’t have a trade deal with Europe. Last summer, he and European Commission president Jean-Claude Juncker said they had reached an agreement, but there still is no actual new trade deal between them. U.S. and European trade negotiators are still at odds, according to a recent New York Times report. The Trump administration wants agricultural trade barriers removed by Europe, which is reluctant to do so. Trump’s tariffs on steel and aluminum from 40 / BizTimes Milwaukee MARCH 18, 2019

the European Union remain and Europe responded with retaliatory tariffs, including tariffs on motorcycles that caused Milwaukee-based Harley-Davidson Inc. to shift more production overseas to get around them. Trump has threatened to impose tariffs on European cars and auto parts, but has held off, for now. Meanwhile, trade negotiations between the U.S. and China are continuing and reports indicate Trump is eager to get a deal done. Last year, Trump implemented tariffs on numerous Chinese goods and China instituted retaliatory tariffs. America’s biggest trade imbalance, by far, is with China, which has also long been criticized by the U.S. for intellectual property theft. Wisconsin’s economy needs these trade wars to come to a beneficial ending as soon as possible. The tariffs have hurt dairy farmers in the state who were already struggling to stay afloat with rock bottom milk prices, and soybean farmers have suffered huge sales declines as a result of Chinese tariffs. The continued escalation of trade tensions with China and other countries could cost the United States more than 2.2 million jobs, including a projected net loss of 37,344 jobs in Wisconsin, according to data from advocacy group Tariffs Hurt the Heartland.

ACCOUNT EXECUTIVE Molly Lawrence molly.lawrence@biztimes.com ACCOUNT EXECUTIVE Maggie Pinnt maggie.pinnt@biztimes.com ACCOUNT EXECUTIVE Christie Ubl christie.ubl@biztimes.com SALES INTERN Tess Romans tess.romans@biztimes.com

ADMINISTRATIVE COORDINATOR Sue Herzog sue.herzog@biztimes.com

PRODUCTION & DESIGN

INTERN REPORTER Madison Goldbeck madison.goldbeck@biztimes.com

This photo, taken circa 1935, shows an antebellum home on Milwaukee’s East Side often called “The Lion House” that was built in 1855 for Edward Diederichs and later owned by John Johnston, a successful Milwaukee banker who died in 1904. Johnston’s wife lived in the home, located at 1241 N. Franklin Place, until 1936. It now houses The Lynde and Harry Bradley Foundation Inc. and is on the National Register of Historic Places.

ACCOUNT EXECUTIVE Paddy Kieckhefer paddy.kieckhefer@biztimes.com

ADMINISTRATION

REPORTER Alex Zank alex.zank@biztimes.com

The Lion House

DIRECTOR OF SALES Linda Crawford linda.crawford@biztimes.com

GRAPHIC DESIGNER Alex Schneider alex.schneider@biztimes.com ART DIRECTOR Shelly Tabor shelly.tabor@biztimes.com

Independent & Locally Owned — Founded 1995 —

The U.S. trade deficit hit a 10-year high of $621 billion in 2018, and the U.S. trade gap in goods rose to an all-time high of $891.3 billion last year. Reducing the U.S. trade deficit was a major pledge of Trump’s when he ran for office. He has said his use of tariffs will result in short-term pain, but long-term benefits from better trade deals. U.S. economic growth appears to be slowing. The nation’s gross domestic product surged by 4.2 percent in the second quarter of 2018, then rose by 3.4 percent in the third quarter and 2.6 percent in the fourth quarter. It’s projected to rise by only 0.2 percent in the first quarter of this year, according to the Atlanta Federal Reserve. Even with all of the controversy surrounding the president, the economy and trade deals could be his biggest concern for re-election in 2020. n

ANDREW WEILAND EDITOR

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

AROUND TOWN Wisconsin Residential Real Estate Summit The seventh annual Wisconsin Residential Real Estate Summit was held Monday, Feb. 25 at The Wisconsin Club City Club.

BRANDON CULPEPPER of Industry Solutions Corp. and JOHN MCCARTY of WaterStone Bank.

TOM MARSHALL and NATE GEBERT, both of Mandel Group.

JUSTIN BOHLER of Property ReVision and JOHN KASTNER of Vierbicher.

JEAN DAUL of Knight Barry Title Group and Waukesha County Executive PAUL FARROW.

DAVID BELMAN of Belman Homes and TOM KERR of Guaranteed Rate.

RON BONGIOVANNI of Homestead Realty Inc. and ERIC LENZ of North Shore Homes Inc.

MIKE RUZICKA of the Greater Milwaukee Association of Realtors and SCOTT SIMON of Travaux Development.

TERRELL NASH of Marquette University, TRAVIS SPELL of T. Spell Development Group and ANTHONY KAZEE of Mr. Real Estate Now LLC. Photos by Alex Zank

When Women Lead MKE Local First Milwaukee and Woman’s Club of Wisconsin recently hosted “When Women Lead MKE” at Woman’s Club of Wisconsin, in Milwaukee. 9.

STEPHANIE BARTZ of Stephanie Bartz Photography and MARY BETH FRECKMANN of Keller Williams Lake Country.

10. SAMANTHA EVERETT of Pretty Lethal Designs and AMANDA NOWAK of The Simple Home and 11. DELORES CLAYTON of Milwaukee Economic Development Corp. and BETH GRAF of My Family Roots Catering & Event Planning LLC. 12. KRYSTA MERCHANT of the Boelter Cos. and MARY HANKERD of Associated Bank. 13. ANN RAKOWIECKI of MKE MKTG CO. and MARIA PANNO of Infinite Warrior Inc.

14. SUSAN KORTENDICK of Milwaukee Cylinder and LISA MALSCH of Apple Leisure Group. 15. RITA LARSEN of Eat Right with Rita and ANDI SCIACCA of Reason @ Work. 16. CHRISTINE EBINGER of Brainchild Studios and BONNIE ATKINSON of BloodCenter of Wisconsin. 17. JEAN WELLS of Jean’s Clay Studio and CAROLINE TYSON of Best Buddies International.

18. ERIKA BRONIKOWSKI of Milwaukee County and JERRICA ZARIC of Jerrica Zaric Interior Design. Photos by Madison Goldbeck biztimes.com / 41

JAKE HILL PHOTOGRAPHY

BizConnections

5 MINUTES WITH…

DR. JOHN RAYMOND

President and chief executive officer, Medical College of Wisconsin THE MEDICAL COLLEGE OF WISCONSIN recently partnered with the Greater Milwaukee Foundation in its effort to establish a presence in Milwaukee’s central city and address persistent health disparities, with plans to co-locate in a new center. Meanwhile, at its Wauwatosa campus, MCW continues to evaluate new program options, including a master’s in genetic counseling and a physician assistant program, as well as possible future campuses in the state. In a recent interview with BizTimes reporter Lauren Anderson, MCW president and CEO John Raymond discussed the plans. PARTNERING WITH GMF IN THE CENTRAL CIT Y “The Greater Milwaukee Foundation is going to bring expertise that MCW simply can’t bring in terms of place-based investment and racial equity, which are very important for the things we want to accomplish in terms of dealing with the social determinants of health. So it’s almost a dream partnership for MCW.” “There is an enormous talent base in Milwaukee that wants to be part of the solution for health disparities and racial inequity and economic inequity, but largely we haven’t worked well together. Both Greater Milwaukee Foundation and MCW recognize that we bring some talent and some resources but the problem is a staggering problem and it’s going to require many different partners. We’re already engaged in fairly significant conversations with local municipalities about transportation, housing – some of the problems that will need to be dealt with if we’re truly going to empower under-resourced neighborhoods. We’re also talking to other 42 / BizTimes Milwaukee MARCH 18, 2019

not-for-profit organizations, as well as for-profit companies that are interested in trying to reinvest in Milwaukee.” BUILDING OUT PROGRAMS “There are very few freestanding medical schools in the country. Most medical schools are either a component of a comprehensive university or what we would call a ‘health sciences university,’ which has other health-related disciplines, like social work, dentistry, pharmacy, nursing, public health. So we’re simply expanding our programs so we can be like other successful health sciences universities.” “The second part is we recognize that the physician workforce is only one small component of overall health care delivery and that MCW has an obligation to meet the workforce needs of our partners here in the region – the main partners of the VA, Children’s (Hospital of Wisconsin) and Froedtert – but also our partners across the state. And that will involve new programs.” POSSIBLE NEW CAMPUSES “We have a very unique exportable model of delivering education with community immersion, using community talent and resources in our curriculum. It’s a break-even model in terms of tuition revenue being able to support the education. That’s unusual. Most all MD-granting institutions have to subsidize the education of their students. Because we’re using digital technology and telecommunication, we’re able to export this model easily, plus or minus one time zone, anywhere where they speak English.” n

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JOIN THIS YEARS EXHIBITORS: Accelerated Analytical Laboratories ActionCOACH of Elm Grove Acuity Insurance AFLAC All Pro Resources [basic-code]™ BizTimes Media Carefree Boat Club of Wisconsin Citizens Bank Computer Technologies Engineered Security Solution, Inc. Entrepreneurs’ Organization (EO) of Wisconsin Epic Color EWH University for Small Business Exacta Corporation FitTech Hosting Fred Astaire Dance Studios of Wisconsin

Greater Brookfield Chamber of Commerce Greenfire Management Services, LLC Hatch Staffing Services Innovative Signs Insperity J.H. Findorff & Son Inc. Lakes Business Group Lakeside Painting, Inc. Lands’ End Majic Productions, Inc. Metropolitan Milwaukee Association of Commerce (MMAC) Milwaukee County War Memorial News Talk 1130 WISN Office Furniture Options Olive Promotions Optima Associates LLC Promotion Pros

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Saz’s Hospitality Group Spring Bank Stamm Technologies Summit Credit Union SVA Certified Public Accountants Town Bank | A Wintrust Community Bank U.S. Cellular University of Wisconsin-Whitewater Viking Communications Inc. Vistage Vivial Waukesha County Business Alliance, Inc. Waukesha State Bank WBON Wegner CPA Wisconsin Institute of CPAs (WICPA)

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Products offered by these Johnson Financial Group companies: Johnson Bank, Johnson Insurance Services LLC and Johnson Wealth Inc.