KOHLS
challenges LOW INVENTORY SLOWS LOCAL HOUSING MARKET 14
BANKS POISED TO HELP FUEL REOPENING OF ECONOMY 20
BROOKFIELD MAYOR ‘VERY FRUSTRATED’ WITH LEGISLATURE 38
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RACINE/KENOSHA COUNTY 2035 THURSDAY, APRIL 22, 2021 (Virtual Event) 12:00-12:30pm – Networking • 12:30-2:30pm - Program
Racine & Kenosha Counties - The Bridge to Wisconsin’s Future Racine & Kenosha Counties are the bridge that connects Southeastern Wisconsin to the Chicago area and will be at the forefront of change and economic development in the region for years to come. Join us on April 22, 2021 as BizTimes Media will host the Racine & Kenosha County 2035, a free virtual event, where we’ll examine the issues and opportunities facing this vital part of our region. Panels of business leaders, educators, real estate and economic development professionals will look to the future and discuss critical challenges and exciting opportunities for growth as we plan for 2035 and beyond. They will talk about what needs to be done to attract talent and support employers to improve the economy, quality of life and overall vibrancy of the region. Panelists: • Ted Matkom, Wisconsin Market President, Gorman & Company (1) • Chad Navis, Director of Industrial Investments, Zilber Property Group (2) • Wes Saber, Executive Vice President & CFO, Haribo of America (3) • John Batten, CEO, Twin Disc, Inc. (4)
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The program continues with concurrent breakout discussions: Education & Workforce Development Panel • Debbie Ford, Chancellor, UW Parkside • Bryan Albrecht, President/CEO, Gateway Technical College • John Swallow, President, Carthage College
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Economic Development Panel • Todd Battle, President, Kenosha Area Business Alliance (KABA) • Tim Casey, Director of City Development, City of Kenosha • Jenny Trick, Executive Director, Racine County Economic Development Corp. (RCEDC) Executive Town Hall Interactive discussion with business leaders on the future of Racine and Kenosha county, considering factors such as recent economic development, real estate and the manufacturing industry. Bring your questions and reactions from the main program for this collaborative exchange.
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BizTimes Milwaukee (ISSN 1095-936X & USPS # 017813) Volume 27, Number 1, April 12, 2021 – April 25, 2021. BizTimes Milwaukee is published bi-weekly, except monthly in January, February, July, August and December by BizTimes Media LLC at 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120, USA. Basic annual subscription rate is $96. Single copy price is $5. Back issues are $8 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 2021 by BizTimes Media LLC. All rights reserved.
Contents
KOHLS
motivated by
challenges
4 Leading Edge 4 NOW BY THE NUMBERS 5 IN FOCUS 6 JUMP START 7 IN THE NEIGHBORHOOD 8 BIZ POLL BIZ TRACKER 9 QUOTE UNQUOTE 10 THE FRANCHISEE
12 Biz News
COMPANY CHARTS GROWTH STRATEGY AMID INDUSTRY DISRUPTION, COMPETITION
12 SHOP TALK 13 T HE INTERVIEW: STEVE KROLL, GRANULAR
14 Real Estate
COVER STORY
Special Reports
27 Notable Credit Union Leaders
16
31 Strategies 31 FAMILY BUSINESS David Borst 32 PREPAREDNESS Liza LeClaire 33 H UMAN RESOURCES Nicole Schmidt 34 TIP SHEET
37 Biz Connections
20 Banking and Finance
22 Business in Racine and Kenosha counties
Coverage includes a report about how, unlike during the Great Recession, banks are playing a vital role in the economic recovery process.
Coverage includes reports on Kenosha businesses trying to recover from damages caused by riots last summer, economic development challenges and opportunities for Racine County and a preview of the Racine/Kenosha County 2035 event.
Partner with Wisconsin’s Bank for Business®
37 NONPROFIT 38 G LANCE AT YESTERYEAR COMMENTARY 39 5 MINUTES WITH… SCOTT POWDER, ADVOCATE AURORA ENTERPRISES
As a bank based here in Wisconsin, we know how important local businesses are to our economy. That’s why our expert team is focused on getting to know our clients, so we can provide customized solutions and personalized guidance to help you achieve your goals. We’re here to be your true banking partner. See how we can support your growth at townbank.us/yourpartner.
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biztimes.com / 3
Leading Edge
BIZTIMES DAILY – The day’s most significant news → biztimes.com/subscribe
NOW
Former Assurant building in downtown Milwaukee.
Milwaukee Tool could bring 2,000 employees to former Assurant building in downtown Milwaukee By Arthur Thomas, staff writer Brookfield-based Milwaukee Tool could bring up to 2,000 employees to downtown Milwaukee as part of a proposed redevelopment of the former Assurant building at 501 W. Michigan St. City of Milwaukee officials are proposing a $12.1 million cash grant if the company brings at
least 1,210 employees to the facility. A second grant of $7.9 million would be available if Milwaukee Tool brought another 790 employees to the facility. The plan, detailed in a public notice, will receive a public hearing at the Redevelopment Authority of the City of Milwaukee
BY THE NUMBERS
More than
1.7 MILLION barrels of beer could be impacted by severe winter storms in Texas and a cybersecurity incident earlier this year, Molson Coors Beverage Company said. 4 / BizTimes Milwaukee APRIL 12, 2021
on April 15. The 370,000-square-foot building was rebranded as HQ501 in late 2019 when Milwaukee-based F Street Group acquired the property for $4 million. At the time, F Street officials said they would create a new form of urban campus and conduct a national search for a corporate tenant, with the goal of finding one within six to 18 months. For its part, Milwaukee Tool says a downtown Milwaukee site is its “first choice” for additional space to expand its corporate operations. “As we continue to grow our presence here in southeastern Wisconsin, we are looking into additional space to expand our corporate operations. A site in downtown Milwaukee is our first choice. At this time, we have no other details to share,” Ty Staviski, chief financial officer of Milwaukee Tool, said in a statement. Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce, said Milwaukee Tool’s interest is a sign that downtown’s pre-pandemic momentum still exists. “Milwaukee Tool is a cornerstone of our regional economy, and their continued rapid growth is a terrific example of the kind of success that’s possible here,” Sheehy said in a statement on behalf of MMAC and Milwaukee 7, the regional economic development entity. “Having Milwaukee Tool considering a significant presence in downtown Milwaukee
shows us that all the momentum we had prior to the pandemic is still there for us to reclaim. This is the kind of opportunity that we can’t afford to pass on.” Milwaukee Mayor Tom Barrett said the company “is part of this city’s history, and it’s certainly part of our future.” “I enthusiastically welcome Milwaukee Tool, and I am delighted Milwaukee is their first choice as they look to expand their corporate operations within the region,” Barrett said. Milwaukee Electric Tool Corp. started in Milwaukee in 1924 and moved to Brookfield in 1965. The designer and maker of power and hand tools and other jobsite products has been among the fastest-growing companies in the region in recent years. It has repeatedly reported year-over-year revenue growth of 20% or more. The company first crossed $2 billion in sales in 2015 and is now on pace to top $6 billion this year. Advancements in battery and cordless power tools drove the initial surge in Milwaukee Tool’s growth, but the company has also placed an emphasis on innovation and expansion into other product categories. The company first made two significant investments to expand its Brookfield headquarters and then in late 2019 and early 2020 announced plans for a second corporate campus in Menomonee Falls. It’s also building a manufacturing facility in West Bend. n
inf cus
LILA ARYAN PHOTOGRAPHY
Full steam ahead AS THE COVID-19 pandemic locked the world down, people took up new hobbies to keep busy at home. Some baked sourdough bread, practiced yoga or attempted DIY projects. Others built model railroads. Milwaukee-based Wm. K. Walthers Inc., a global producer and distributor of model railroad equipment, has seen a double-digit increase in sales since the start of the pandemic. “When you think about, at a high level, what the world is going through, it’s really out of control,” said Stacey Walthers Naffah, president of the fourth-generation family business. “It’s been a challenging time and people were looking for places to feel in control, comfortable, productive – our hobby has always done that for people.” Increased demand has been driven largely by existing customers as they lean further into their favorite pastime and what, for many, is a social activity. But Walthers has also gained many new customers in need of a creative outlet or distraction from life’s chaos. Prior to the pandemic, Walthers had already been working to draw railroading newcomers through its product mix, social media engagement and programs like the popular National Model Railroad Build-Off contest. So, the 85-employee team was ready to appeal to people seeking new leisure activities during the pandemic. But even as a post-pandemic world emerges, the momentum behind model railroading is expected to stay on track. “While some think it might be an old or stogy hobby, I don’t agree,” said Walthers Naffah. “The fundamentals are really sound because it’s based on people, and I think people like to build things. … People need to escape from technology and screens and be in the real world, but they need it to be connected.” n — Maredithe Meyer biztimes.com / 5
Leading Edge
BRANDON ANDEREGG
OCTANE COFFEE
@BIZTIMESMEDIA – Real-time news
LOCATION: Waukesha FOUNDER: Adrian Deasy FOUNDED: 2018 PRODUCT: Automated coffee drive-thru WEBSITE: octanemke.com EMPLOYEES: 3 GOAL: Launch its first automated coffee drive-thru and franchise the business. EXPERIENCE: Deasy is a mechanical engineer and robotic automation design consultant.
Octane Coffee ‘sells time with a great cup of coffee’ By Brandon Anderegg, staff writer
6 / BizTimes Milwaukee APRIL 12, 2021
Octane Coffee founder and CEO Adrian Deasy set out to build the “world’s fastest coffee drive-thru.”
A WAUKESHA-BASED startup aims to disrupt the coffee industry with its automated and contactless coffee drive-thru business model. Octane Coffee’s automated systems can serve coffee, tea, smoothies and juice drinks to customers in under 30 seconds. When customers order and pay through the app, Octane’s “robotic server” GPS tracks a customer so that production coincides with their arrival. In fact, customers can schedule recurring coffee pickups and if the customer is not available, Octane Coffee will know based on geolocation and cancel the order. The startup plans to launch its first location this summer in the city of Pewaukee at W229 N1400 Westwood Drive, northeast of the I-94 and Redford Boulevard intersection. At its core, Octane Coffee “sells time with a great cup of coffee,” said Adrian Deasy, Octane Coffee founder and chief executive officer. The average wait time for a Starbucks coffee is 4 minutes and at times much longer, Deasy added. “It’s meant to be very fast, convenient and also affordable,” Deasy said. “We’re going to be 10% to 20% cheaper than our competitors because we can be.” That’s because Octane Coffee eliminates most labor and overhead costs through auto-
mation and a lean buildout for its drive-thru. The startup projects its business is 375% more profitable per drink sold and requires one-third of the cost to launch, when compared to major coffee chains. Octane Coffee is designed to run unattended for 24 hours at a time, although a person will stop by once a day for 30 minutes to clean and restock supplies. Octane’s coffee will have a familiar taste too. The company partnered with Milwaukee-based Stone Creek Coffee Co. for all its coffee products. Stone Creek co-founder Eric Resch, who invested in Octane, also sits on the startup’s board of directors. The startup’s business model is unique to the Midwest, but the building itself is also an architectural anomaly. Octane Coffee operates out of a repurposed 20-foot shipping container with a metal-paneled facade designed to look like wood. The container, which is the size of a Chevy Suburban, is packed with a robot, refrigeration, coffee makers, cups, lids and ingredients for its products. Deasy’s long-term vision is to franchise Octane Coffee, manufacture more containers in Waukesha and ship them anywhere in the United States, he said. n
IN THE NEIGHBORHOOD
TABAL CHOCOLATE 7515 Harwood Ave., Wauwatosa NEIGHBORHOOD: Tosa Village FOUNDED: 2012 OWNER: Dan Bieser EMPLOYEES: 5 PRODUCT: Chocolate
How did Tabal Chocolate get its start? Bieser: “At the time in 2012 I was a high school principal. I needed to take a break from school, and a friend of mine was going to Toronto to learn how to make chocolate. And I said, ‘I’d be happy to go along with you and see what’s going on with that.’ We went up to Toronto and spent a week with some chocolate makers, and I was inspired to take a new career path.” What makes Tabal different than other chocolate companies?
“We are very proud to be chocolate makers. That’s totally different than a chocolatier or a candymaker. Chocolate makers, there’s maybe 100 in the nation … that actually make their own chocolate from the bean. We’re the only chocolate maker in southeast Wisconsin, and there’s maybe five or six in the entire Midwest that actually make the chocolate themselves.” Where does Tabal get its supply? “We’re working with farmers in Peru to allow them market access that they may not have had before. A
big part of what we’re doing is, there’s a lot of cacao grown in the world, but there’s very limited access for the best cacao growers in the world to get that to craft chocolate makers in the United States and worldwide. So, it’s setting up those networks, supply chains, that takes years of developing relationships.” What’s new at Tabal? “We’re continuing to expand our operation in working with breweries. We work with breweries all over the country to sell our cocoa nibs. They use that to flavor the beer.
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biztimes.com / 7
Leading Edge BIZ POLL
A recent survey of BizTimes.com readers.
The latest area economic data.
Do you support the $1.9 trillion federal COVID-19 relief bill? YES:
NO:
44.3%
55.7%
66.48
The Milwaukee area manufacturing index was
in March. An index above 50 indicates growth in the sector.
Passenger traffic at Milwaukee Mitchell International Airport was down
63.6%
year-over-year, during the first two months of this year.
Share your opinion! Visit biztimes.com/bizpoll to cast your vote in the next Biz Poll.
Advertise in these upcoming special reports to get your message in front of area business executives.
Health Care
4.5%
Wisconsin’s gross domestic product fell
in 2020.
May 10, 2021 Space Reservation: April 21, 2021
Small Business Week
4.4%
Personal income growth in Wisconsin was only
in 2020, which ranked 46th in the nation.
lncluding How To: Advice for Small Business Thought Leadership Pages
May 10, 2021 Space Reservation: April 21, 2021 Contact Linda Crawford today! Phone: 414.336.7112 Email: advertise@biztimes.com 8 / BizTimes Milwaukee APRIL 12, 2021
Wisconsin’s unemployment rate in February was
3.8% the same as in January.
“ QUOTE
unQUOTE
M I K E D E L PR E T E
”
G L O B A L R E A L E S TAT E T E C H S T R AT E G I S T Mike DelPrete, a global real estate technology strategist and scholar-in-residence at the University of Colorado Boulder, recently spoke at Marquette University Center for Real Estate’s annual residential real estate symposium, discussing the iBuyer industry and what companies like Zillow, OpenDoor and Redfin are planning. n
“If you’re a homeowner and you want to sell your home, the value of getting an instant offer (from iBuyers) is at an all-time low. There’s so much buyer demand, and supply is so constrained, if you want to sell your home, why wouldn’t you just put it on the market?”
“The market is so big, there’s plenty of room for everybody to play. And at the end of the day, I think what’s not going to change over the next 10 years is people will want an expert to guide them through the process.”
“The pandemic has created this narrative, this hype of, ‘everything’s changed, technology is changing everything and real estate has changed, and we’re never going back. And now people are 10 times more likely to use technology.’ A lot of that is self-serving hype generated by companies who are set to benefit from that, if that’s true.”
“Real estate is so expensive, and it’s such a big decision. People are going to spend so much money and loss aversion kicks in. It’s not like buying a toothbrush. It’s such a big deal that consumers are willing to deal with pain, put up work and look at multiple websites.” “Zillow and Redfin have been public companies for about 10 or 15 years now. They’ve never made money. It doesn’t matter, investors don’t really care. The reason they’re supporting them is they believe in this future vision where they will make money, and they will achieve a profit.”
“Working together was incredibly easy.”
“They respect you as a person, not a number.”
“Working with Citizens Bank, we have found trust.”
Find what matters most to your business.
262-363-6500 www.citizenbank.bank Follow | Like | Review Citizens Bank – WI
biztimes.com / 9
Leading Edge
the
FRAN C H I S E E Paley and Lightner
LISA PALEY AND TIM LIGHTNER TWO MEN AND A TRUCK THE FRANCHISE: Lansing, Michigan-based Two Men and a Truck is North America’s largest franchised moving company, with more than 380 locations and 3,000 trucks across the U.S., Canada, Ireland and the U.K. Tim Lightner launched the company’s first Wisconsin franchise in 1993 in Madison. Now, the group covers nearly all of southern Wisconsin and recently expanded into Milwaukee, with the promotion of longtime general manager Lisa Paley to partner.
“The day we closed that deal, I received a call from the owner of the Milwaukee franchise, who was considering a sale as well and wanted to know if we’d be interested,” Lightner said. “I said, ‘Well, we’re super interested, but I don’t have any money now because I just bought this other one.’”
2000: Lisa Paley began working for Two Men and a Truck Madison as a part-time bookkeeper while she earned her undergraduate degree in accounting. Paley planned to become a CPA, but was being pulled in another direction. She stayed with the franchise group and was promoted to finance manager in 2004.
“The more I looked at continuing my education, the more I realized there was really a disconnect in the CPA world between numbers and people,” said Paley. “The path that I was on gave me the ability to impact people and therefore the numbers of the business.”
2011 : Two Men and a Truck Madison acquired an existing franchise in Racine as its second territory. That location has since doubled in size. Paley took on a new role as general manager of both offices. FEBRUARY 2020: The group expanded again, taking over the Waukesha County market.
“Being in the entrepreneur role means that you get to work to develop people and invest in your team,” said Paley. “I’ve been on the receiving end of this opportunity up until this point, and I’m really excited to give others those opportunities.”
10 / BizTimes Milwaukee APRIL 12, 2021
JANUARY 2021: Lightner purchased the Milwaukee franchise and brought Paley on as partner. She will soon become part owner of all four of the group’s markets, which include nearly 70 trucks and 200 employees. During the COVID-19 pandemic, the business has seen increased demand and in June 2020 expanded into the junk removal market. THE FRANCHISE FEE The initial investment for a “mini-market” runs between $100,000 and $192,000, and between $179,000 and $585,000 for a “standard market.”
“With all the economic stimulus, especially interest rates being low as they were, the housing market took off and we’ve been just swamped,” said Lightner. “Our biggest issue is being able to find employees to keep up with demand.”
- Welcomes -
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BizNews
SHOP TALK
How can manufacturers navigate supply chain delays? Sussex IM’s headquarters.
By Brandon Anderegg, staff writer
TOILET PAPER may have returned to grocery store shelves, but the COVID-19 pandemic and weatherrelated supply chain disruptions continue to challenge local manufacturing companies. The February cold snap that devastated Texas, where much of U.S. resin production is located, forced commodity resin makers to close. Sussex IM was one of many manufacturers across the country to experience the ripple effect. The Sussex-based custom injection molder relies heavily on resin to make products for industries including beauty, health care and consumer products. “We were facing downed situations in our plant because we were not getting any of the materials we were already committed,” said Megan Tzanoukakis, vice president of supply chain for Sussex IM. Manufacturers are approaching supply chain delays in a variety of ways with communication playing a central role in their strategy, said Molly Barndt, Waukesha County Technical College supply chain instructor. Companies are now dual sourcing raw materials and components to mitigate supply chain delays, and in some cases connecting with suppliers in two different regions. Especially for critical components, it’s important that companies understand their relationships with suppliers, Barndt said. Are these relationships transactional or is it a strategic partner12 / BizTimes Milwaukee APRIL 12, 2021
ship? The latter means information forecasts and pipeline visibility are available on both sides. A strategic relationship could also mean that a supplier or manufacturer may be willing to house buffer or safety stock at their facility, which can build resilience in a supply chain. Strong relationships with suppliers allowed Sussex IM to weather the Texas winter storm, Tzanoukakis said, adding that because of strategic relationships, suppliers had available inventory for the company. “On the other side, we have a lot of visibility into our key customers’ forecast, and we were able to buy ahead and have buffer stock, continue producing and then hold inventory here,” Tzanoukakis said. A culture of information transparency also helps companies manage customer expectations. The toilet paper hysteria at the onset of the pandemic showcased the bullwhip effect – swings in inventory from panic purchasing and sudden demand have an amplified impact moving up the supply chain. Barndt says customers need to order earlier and update their ERP systems to reflect longer lead times experienced by manufacturers and suppliers so that delays do not affect their supply chains. “The better the communication flow, the better that bullwhip starts to relax a bit,” Barndt said. Manufacturers could also ad-
just their quotations to “expires in 30 days” instead of the typical 60 or more days. Another option may be adding a surcharge for freight, which wouldn’t permanently raise costs and can be removed when supply increases, Barndt added. Port delays have also proven to be a challenge, making it difficult to plan for production and labor without a timeline of when materials will arrive. Translating inbound delays into production plan delays to accurately project eventual shipment dates to customers is key. To mitigate the impact of port delays, manufacturers should consider other transportation modes or rely on logistics visibility solutions or transportation management systems, Barndt said. Building a steady stream of inventory by planning material orders to compensate for additional delays is another strategy that companies are implementing, Barndt added. Supply chains saw disruption prior to the pandemic with trade and tariff disputes between the U.S. and China. Pandemic-induced port delays have also increased lead times for raw materials, creating a shortage of finished goods and resulting in missed deliveries and price increases. A record 22 weather or climate disasters causing at least $1 billion in damages affected the United States in 2020 alone, according to the National Oceanic and Atmospheric Administration.
SOLUTIONS FOR NAVIGATING SUPPLY CHAIN DELAYS • Evaluate safety stock at distributors and intermediaries to ensure your inventory is securely held. • Identify strategic versus transactional relationships and ensure critical parts are sourced from suppliers where a strategic partnership is present. • Invest in logistics visibility solutions such as transportation management systems. • Ask customers to provide forecasts and information about their demand cycles so manufacturers can plan accordingly. • Plan material orders to compensate for the additional delays to ensure a steady stream of inventory. These variables don’t even account for the unexpected mishap of a California-bound cargo ship hitting rough weather in late January and causing 750 containers to be lost at sea. The global supply chain is no stranger to disruption, but these interferences – whether they be pandemic or climate-related – appear to be on the rise as the world becomes more volatile. n
the
Interview
GRANULAR, a digital marketing agency based in Milwaukee’s Historic Third Ward,
recently promoted Steve Kroll from vice president to president of the firm. Kroll began working for Granular in December of 2015 as a consultant and joined the business full time a few months later. The seven-year-old agency, which counts several Fortune 500 companies among its clients, was already growing before COVID-19, but shifts in the market have accelerated that trend over the past year as Granular’s expanding team continues to work from home amid the pandemic. What changes about your job with your promotion? “Up to this point, my role has been formally overseeing sales and marketing and informally has been kind of running day-to-day operations for the agency. This promotion formalizes something that has been happening over the course of the last year, which allows our founder (Jordon Meyer) to step back from kind of the day-to-day operations of running the agency to focusing more on helping grow our business and steer the ship of where it goes. This allows me to really consolidate all functions of our agency – sales, marketing, client services – under my umbrella.”
What kind of growth have you seen this past year? “Since March of last year, every month has been a record-breaking month in revenue, that’s month on month. We grew by 50% last year, which we had not grown that much in a previous year. … We’ve onboarded now five new employees, and it will be seven (new) full-time employees by the end of April, fully remote, not seeing them in person, which is completely different for us.”
How have clients’ needs changed? “What happened with the pandemic is there have been all these companies we’ve been talking to, who said, ‘Someday we’re going to really figure out Google Ads, or someday we’re going to figure out Facebook, or LinkedIn or Snapchat or TikTok or whatever.’ And they now are forced to do it because they couldn’t do trade show marketing, or in-person office presentations – they legally weren’t allowed to do that. So, when someone is looking for the best digital marketing agency who is local to them … we’re the number one option in Wisconsin, and that’s not defined by us, that’s defined by Google.”
What distinguishes Granular from other marketing firms? “Our business is really straightforward. We don’t have to be all things to all people. We’re going to build an expert team that understands digital advertising and the analytics around it, and that expert team is going to provide exceptional customer service. So, we hire really intelligent practitioners who have great client service skills and not have account managers, not have photographers, designers. That’s not really our thing. We’ve always been lean from the start.”
What’s your approach to building company culture? “The most important part of culture in my experience is people have a clear understanding of what is expected of them, how is success defined in the job, what does their boss and their boss’s boss care about, and do they have the tools and resources they need to be successful? And do they have deep feedback from a manager so that way they’re not just thrown the keys and told to figure it out? Most people want that engagement, they want resources, they want feedback. Based on the structure of how we set up our team, it’s really facilitated that and that’s important for our culture.” n
Steve Kroll President Granular 316 N. Milwaukee St. #100 Employees: 21 granularmarketing.com biztimes.com / 13
Real Estate
REAL ESTATE WEEKLY – The week’s most significant real estate news → biztimes.com/subscribe
New ranch-style condos being built in the OverStone development in Lannon.
Inventory shortage could mean difficult months ahead for Milwaukee-area housing market
ANGELA WALTERS has a list of pre-approved buyers who can’t seem to find a home. This is a result of the outsized demand for homes versus the shallow inventory of listings. Walters, a real estate broker with EXP Realty, recalls one recent incident. One of her buyers was interested in a Milwaukee-area home listed for $199,000. The first day of showings revealed how many others also had the same idea. “There were cars lined up when I pulled in,” she said. “They just handed the keys from one agent to the next. The door just stayed open the whole time.” She said her client offered $50,000 over the listing price. They were preapproved for $250,000, so they threw everything they had at the seller. Their offer still wasn’t selected. “The (listing) agent told me they received 36 offers, and that there were 10 offers that were higher than ours,” Walters said. This story is one of many being told by residential real estate agents in the metropolitan Milwaukee market right now. Inventories of homes listed
FEATURED DEAL: F O R M E R M I LWAU K E E B A L L E T B U I L D I N G I N WA L K E R ’ S P O I N T
ADDRESS: 504 W. National Ave., Milwaukee BUYER: H&D Investments SELLER: Milwaukee Ballet PRICE: $740,000 14 / BizTimes Milwaukee APRIL 12, 2021
Milwaukee Ballet recently sold its old headquarters building in Walker’s Point to a Port Washington-based investors group. The building, also known as the Schlitz Tivoli Palm Garden, was built in 1901 by the Uihlein family, according to a news release. Milwaukee Ballet renovated and began occupying the building in 1981, two years after a fire left it gutted. Milwaukee Ballet opened its new home in the Historic Third Ward in 2019. The new owners of the Walker’s Point building have entered a lease agreement with Sheboygan-based Warped Studio, are finalizing an agreement with Milwaukee-based Daync Studio and are in discussions with a third dance studio to occupy the space. “There is local affection for this building, and it is our intent to honor those memories and what it has meant to so many in the community,” said Daniel Herlache, who along with Jordan Dimmer leads the investors group.
for sale have been tight for years, but the supply issue became a lot more visible earlier this year. According to the Greater Milwaukee Association of Realtors, metro home sales were down 0.7% year-over-year in February. This was a departure from a gangbuster 2020, which set new records in home sales despite a short-lived slump in the spring due to the COVID-19 pandemic. GMAR noted the slight dip in sales was due to the lack of inventory, not a decline in buyer interest. Seasonally adjusted inventory, which estimates how long it would take all existing homes on the market to be sold given current demand, has not reached above 1.5 months for the past year. This measurement also subtracts the listings that are active with offers, since the vast majority of them turn into a sale. That’s well below the 6-month supply level that is considered a balanced market (anything less is considered a seller’s market and anything more a buyer’s market). February’s inventory level stood even lower, at 0.6 months, a new low for the 12-month period. “There aren’t really words to describe the pickle we’re in,” said Mike Ruzicka, president of GMAR. “It’s going to take a while to get out of this.” Industry experts don’t expect the market to turn around anytime soon – especially not as temperatures warm and the market heads into what is normally its busiest time of year in the late spring and summer. David Clark, an economics professor at Marquette University, recently predicted the inventory issue will cause statewide sales declines for the peak months of the home-buying season. This period runs roughly from May to August. “Our problem is not a demand problem,” Clark said at a recent Marquette real estate event. “Our problem is not a macroeconomic problem. Our problem is a supply problem.” This pickle has been fermenting for a long time. Ruzicka said the market hasn’t seen enough
listings since 2015. He said new construction hasn’t been keeping up with demand, and developers are also building too many apartments relative to condominium units. And as supply has lagged, household formation has been increasing, said Ruzicka. New households mean more demand for homes. The pandemic has only exacerbated the issue in two distinct ways, he said. First, it pushed the market forward about three months because of that short lull at the onset of the pandemic, caused by statewide shutdowns and a general pause in economic activity. Second, it caused people to continue seeking homes well into the winter months, which are traditionally slow periods for the market. “(The pandemic) really pulled any ability to try and mask the problem away. It’s really visible right now,” Ruzicka said. “It all comes down to creation of new (housing) units. We just need more units.” Walters said buyers and their agents are getting creative to help their offers stand out. On the other end, she is also challenged with convincing people to put their homes on the market. “The biggest challenge is, ‘Where am I going to go?’” Walters recalled a recent would-be seller telling her. Her response to him and others in that camp are that the market may not be this way forever. “You want to buy low and sell high. This is definitely a high point,” she said. n
WHO REALLY OWNS IT? H O T H O U S E TAV E R N , D O W N T O W N M E N O M O N E E FA L L S It was once a fire station. Now it serves up spicy fried chicken and other tavern fare. The historic building, located along Appleton Avenue just south of Main Street, was used for a variety of government functions including a village hall, library and correctional facility, according to Wisconsin Historical Society records. The fire department vacated the building in 2015 upon completion of a new station. Christopher Leffler, owner of Leff’s Lucky Town in Wauwatosa, bought the building from the village in 2018 and turned it into a bar and eatery. Hot House Tavern opened in fall 2019. ADDRESS: N88 W16631 Appleton Ave., Menomonee Falls OWNER: Appleton 175 LLC (registered to Leffler) ASSESSED: $1.5 million
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STORY COVER
KOHLS
motivated by
challenges COMPANY CHARTS GROWTH STRATEGY AMID INDUSTRY DISRUPTION, COMPETITION
BY MAREDITHE MEYER, staff writer YOUR PHONE BEEPS. It’s an email from Kohl’s. Those Nike joggers you added to your cart last night went on sale. You’re redirected to the Kohl’s app and a recommendation pops up for a matching hoodie, also on sale. The store in your town has both in stock, just your size. You make your purchase and earn $10 in Kohl’s Cash, plus rewards. An hour later, you walk into the store to pick up your new outfit. While you’re there, you return the headphones you ordered on Amazon last week. Then a pair of Cole Haan’s catches your eye, and they’re on sale. You head to the register and redeem the reward balance in your virtual wallet. You exit the store, both purchases in hand. Your phone beeps. It’s an email from Kohl’s. A glimpse into the lifecycle of the modern-day Kohl’s customer shows just how much retail has changed over the past decade. The rise of e-commerce and Amazon has allowed consumers to buy virtually anything at the touch of a finger. Brickand-mortar companies have been forced to adapt, and fast. Some have stayed relevant; many have not. The COVID-19 pandemic has only accelerated 16 / BizTimes Milwaukee APRIL 12, 2021
the industry’s digital shift and shoppers’ need for convenience. Last year’s public health and economic crisis was a breaking point for department stores J.C. Penney, Neiman Marcus and Lord & Taylor – all of which filed for bankruptcy – and Macy’s, which is in the process of closing a fifth of its stores. Kohl’s Corp., a $16 billion retailer based in Menomonee Falls, stands at a critical juncture. Its physical footprint spans 1,162 stores in 49 states. In 2019, Kohl’s had the second highest sales per store in the mass apparel sector, behind Nordstrom Rack, according to the National Retail Federation. Meanwhile, its online business has picked up steam, swelling to 40% of total sales in 2020, up from 4% in 2010 and from 24% in 2019. However, total sales have largely flattened since 2014, which analysts chalk up to the gradual loss of in-store business. Still, Kohl’s says its physical footprint remains profitable and, under the leadership of chief executive officer Michelle Gass, has continued to test new ways of bringing its now 65 million-customer base through the door. Now, in the wake of a devastating year, resulting in a 20% drop in sales, and in the face of mount-
ing competitive pressure, Kohl’s is being forced to innovate again. The company is several months into its new long-term growth strategy and claims it’s making progress, but activist investors who together own a 9.5% stake aren’t satisfied. In February, the group launched a highly publicized campaign to replace five of Kohl’s 12 board members, blaming leadership for a “chronically underperforming” stock price and pre-pandemic financial struggles. The group, which includes Macellum Advisors GP LLC, Ancora Holdings Inc., Legion Partners Asset Management LLC and 4010 Capital LLC, says the retailer’s new growth initiatives are no different from its 2014 Greatness Agenda, which failed to meet goals. It questions Kohl’s ability to achieve current growth aspirations without major changes to the board. But Kohl’s has stood its ground, defending its leadership and its new plan, which includes growing sales and operating margin by capitalizing on apparel trends and improving its women’s business. “We are leaning into categories where we have demonstrated momentum and will drive more growth opportunities into the future,” Gass said,
announcing the new initiative in October. “The recent environment has accelerated our path forward and presented a unique opportunity to capture market share from retail industry disruption.”
BIG PLANS At the heart of the company’s plan is a new consumer-facing vision: “To be the most trusted retailer of choice for the active and casual lifestyle.” Athleisure and casual fashion has exploded over the past five years, and the pandemic fanned the flame as people traded jeans for sweatpants while stuck at home. Kohl’s active category has more than doubled since 2013; today it generates 20% of total sales. The retailer is working to grow the segment to at least 30% by expanding top brands Nike, Under Armour and Adidas, and adding new brands such as Calvin Klein, Eddie Bauer and Lands’ End. Not to mention its own private label athleisure brand, dubbed FLX, which recently launched in more than 300 stores and online. For Dodgeville-based casual clothing retailer Lands’ End, selling through Kohl’s means gaining access to a sizable new audience. “What we’ve seen with Kohl’s is they’re our type of customer, but they’re new to Lands’ End,” said Jerome Griffith, chief executive officer of Lands’ End, at DA Davidson’s annual consumer growth conference. “Half or more of the customers that shop with us in these new channels had never shopped at a Lands’ End before, which is one of the reasons why our name is getting out there more.” Another key focus for Kohl’s is beauty. The historically underperforming category for Kohl’s is about to get a makeover thanks to a huge partnership deal with San Francisco-based beauty retail giant Sephora. Beginning this fall, Sephora will open locations inside 200 Kohl’s stores, expanding to 850 stores by 2023. The 100-plus brand assortment will launch Aug. 1 on Kohls.com.
Kohl’s, with a 70% female customer base, considers this partnership a game changer. “We fully expect that we will see a halo effect across the store.” said Gass during Bank of America’s Consumer & Retail Technology Conference in March. “… Make no mistake, this is one of the biggest, newest different moves that we’ve ever had to accelerate our top line.” The 2,500-square-foot front-of-store shops are poised to grab the attention of new, younger customers by offering an experience that shoppers couldn’t get online. “We’ve seen that (younger) shoppers like this idea of inspiration, discovery and storytelling,” Jen Johnson, senior vice president of corporate communications for Kohl’s, said in an interview with BizTimes Milwaukee. “They come in and look for ideas … as opposed to real purpose-driven customers.” Kohl’s rolled out its Outfit Bar concept last year to the same effect. Both in stores and online, it displays various combinations of products and brands for a “solutions-based” experience. Together, the Sephora partnership and active casual expansion contribute to the company’s ongoing efforts to revive its women’s apparel category, having restructured leadership and exited 10 down-trending brands since late 2019. The activist investors say the company’s brand churn is a symptom of “shiny object syndrome” – brand launches are exciting but ultimately distract management from more pressing issues without impacting top-line growth. Kohl’s works to evolve and attract new customers while balancing a long-held reputation – one that’s built on Kohl’s Cash, coupon mailers, and discount programs. And company leaders say there’s room for growth there, too. “We’re continuing to bring in some really great aspirational brands, but we need our customer to
GASS
know that we’re still a very strong value player, and she’ll feel that through the rewards program that we have, through the pricing that she gets, through the offers that she has,” said Johnson. Kohl’s loyalty program has grown to 30 million members since its 2014 launch. Those shoppers spend two times more than non-loyalty members. Its private credit card, which has 29 million holders, generated 56% of sales in 2019. Kohl’s Cash, loyalty rewards and charge card were recently integrated under one “Kohl’s Rewards” program, making it easier for members to use and understand. The move also allows Kohl’s to leverage its large customer database to deliver targeted offers and personalized content for a lower cost, Gass said during the BofA conference. “One of the side benefits that we’ve had with loyalty and focusing on it has been email acquisition,” she said. “Our email file is the biggest it’s ever been, and that allows us to reach customers a lot more efficiently as part of the marketing transformation we’re making.” biztimes.com / 17
STORY COVER
Kohl’s says it connects with its customers more than 10 times per week. General expenses were down 12% in 2020 thanks in part to new digital marketing efforts. Still, the activist investor group criticizes Kohl’s historically printbased, and pricey, advertising strategy for years of rising costs amid stagnant sales. With how much Kohl’s has spent annually on marketing, about $1 billion, and on omnichannel fulfillment, its inability to gain market share is “highly disappointing,” the group wrote in a letter to shareholders. Company leaders don’t disagree it’s time for an upgrade, but not until new strategies are thoroughly tested.
INDUSTRY HEADWINDS
KOHL’S RECENTLY LAUNCHED ITS PRIVATE LABEL ATHLEISURE BRAND, FLX, IN 300 STORES AND ONLINE.
18 / BizTimes Milwaukee APRIL 12, 2021
Given the state of the apparel retail sector today, it’s unclear that either plan – Kohl’s management or the activist investors’ – is strong enough. Sephora’s deal with Kohl’s replaces its longtime 600-shop-in-shop partnership with struggling J.C. Penney. “Sephora is one of the few reasons why people have gone to J.C. Penney in recent years,” said David Swartz, equity analyst at Morningstar Research Services LLC. “But that didn’t keep J.C. Penney from going bankrupt.” What’s more, a similar partnership between Ulta Beauty and Target is set to launch at more than 100 Target stores around the same time Sephora will roll out at Kohl’s, which Swartz said could “blunt” the effort. “People take far more trips to Target than they do to Kohl’s. … So, if they’re going to have opportunities to buy cosmetics that were not previously available at Target, that will perhaps keep some people from going to Kohl’s,” he said. Target may not be a traditional department store competitor of Kohl’s, but both retailers – and many of their rivals – primarily serve one market: the shrinking middle class. “The whole apparel retail industry is kind of a blood sport,” said Swartz. “(Department stores and discount chains) are all fighting over a market that hasn’t grown very much.” Plus, consumer spending on apparel has decreased since the 1980s, preventing retailers from raising prices, even while costs continue to rise. Years of challenging market dynamics have wiped out several of Kohl’s competitors in the department store space, but that doesn’t mean apparel retail has gotten any less competitive. “Competitors like Amazon are getting bigger and bigger,” said Swartz. “They’ve got infinite resources, which Kohl’s does not. Kohl’s is a viable business, but I don’t know that it’s going to get back to those glory days.” Under these conditions, Swartz said, it’s unlikely Kohl’s can achieve 7-8% operating margin by 2023. Those numbers, both for Kohl’s and other department stores, peaked around the time Amazon started gaining market share in apparel. Swartz said it’s no coincidence. In 2019, Amazon surpassed Walmart as the largest apparel retailer in the U.S., according to Coresight Research. Meanwhile, activist investors point fingers at Kohl’s board for allowing operating income and mar-
gin to decline in the first place. From 2011 to 2019, operating margin fell from 11.5% to 6.1%. “The investor group is perplexed as to why a 6.1% operating margin was tolerated in 2019,” they said. “ …Where was the urgency back then, and why has it taken the board so long to oversee the construction of a plan to achieve improved margins?” Kohl’s 2021 outlook, which includes 4.5% to 5% operating margin, barely measures up to 2019, which was an underperforming year in its own right with earnings down 13.7%. There’s hope for Kohl’s earnings power, the group says, but under the leadership of a board with “more relevant retail expertise.” The group’s slate of five nominees would replace what it says are the “least qualified” incumbent directors, including two Milwaukee-based execs: John Schlifske, chairman, president and CEO of Northwestern Mutual, and Jonas Prising, chairman and CEO of ManpowerGroup. Kohl’s argues its current director slate “outmatches” the activist investors’ nominees in relevant experience, with backgrounds in retail, consumer-facing industries, technology, and investment and capital allocation. Four directors are current or former retail CEOs.
UP TO THE CHALLENGE? Ironically, Amazon has helped play a role in Kohl’s fight to stay relevant and draw customers. In July 2019, Kohl’s launched its Amazon returns program, a service that allows customers to bring in their unwanted Amazon items, and Kohl’s will package and ship them, free of charge. The company hasn’t offered many details about the program’s impact thus far, but Gass said it drove at least 2 million new customers in 2020, a third of which were millennials. The activist investor group is skeptical. The program has increased general expenses, with little to no revenue return. It could be years before seeing a benefit to the bottom line, even though the program has been advertised as “accretive today,” the group said. The Amazon partnership was a pivotal step in Kohl’s ongoing shift from brick and mortar to omnichannel, a model that combines the traditional in-store shopping experience with modern-day e-commerce. Since 2010, Kohl’s has invested hundreds of millions of dollars into an entirely new side of its business, including Kohls.com, its mobile app and fulfillment network of five new e-commerce fulfillment centers, in California, Maryland, Texas, Indiana and Ohio. Stores have evolved into fulfillment “hubs,” where shoppers can pick up online purchases and shipments, and return Amazon items, at no additional cost. When Kohl’s was forced to close its entire store footprint for weeks amid the pandemic, it added free curbside pickup to its stores’ omnichannel capabilities. Last year, stores fulfilled more than 40% of digital sales. Not only are these programs convenient for customers, but they also drive store traffic, cut shipping costs and help manage inventory. “What this means, going from brick and mortar to omnichannel, is that we actually see it being more beneficial than being just a digital business,” said Johnson. Omni-channel customers are six times “more
A RENDERING OF A FRONT-OF-STORE SEPHORA SHOP PLANNED FOR HUNDREDS OF KOHL’S LOCATIONS.
productive,” or generating higher revenue per purchaser, than a digital-only customer and four times more productive than a store-only customer. “When we get that customer who understands how to shop with us both in stores and online, they’re extremely loyal, they are extremely productive and it’s better for our business both ways,” said Johnson. But the shift to digital has been one of Kohl’s greatest challenges, said Johnson. “The current version of Kohl’s is motivated by challenges,” she said. “We like a good problem.” The retailer expects to maintain 40% digital sales penetration over the next two years and anticipates that number may even dip later in 2021 as COVID-19 vaccination increases and shoppers who have been stuck at home for a year eagerly return to stores. Kohl’s is looking to capitalize on that pent-up demand. “With so much time spent in their homes, working from home, etc., there will be a lot of opportunity for customers not only to be shopping in stores, but buying the kinds of things we sell, notably apparel, footwear, soon to be beauty, as they return to normal life, going to have to work, traveling, and the like,” said Gass during the company’s fourth quarter earnings call.
LOCATION STRATEGY The relationship between Kohl’s digital and physical business is symbiotic. Digital sales are 10% higher in markets with stores. When the company closed 18 stores in 2016, web traffic in those markets took a hit. Real estate strategy has a lot to do with Kohl’s ability to keep its stores productive, even amid pandemic-related disruption, said Ross Koepsel, principal at Milwaukee-based Founders 3 Real Estate Services. Embarking on a nationwide expansion in the 1990s, Kohl’s sharpened its competitive edge by opening stand-alone stores strategically in suburban neighborhoods. Today, 95% of Kohl’s stores are located off-mall, which sets it apart from department stores like Macy’s and J.C. Penney – both have about 10 times as many mall-based locations as Kohl’s, according to Morningstar. “When you don’t limit yourself to just mall
locations, you have a much greater reach, put yourself closer to where your customers are and give them greater opportunities to shop your store,” said Koepsel. Kohl’s says 80% of Americans live within 15 miles of one of its stores. And many locations are positioned around off-mall retailers with higher foot traffic, such as Target or Walmart. In southeastern Wisconsin, Kohl’s has 20 stores and 5,000 employees, with a total of 42 stores and nearly 7,000 employees across the state. “Online, off-price (TJ Maxx, Ross Dress for Less, Burlington), and off-mall is what is winning in retail today,” said Mark Altschwager, senior research analyst at Baird. “As more millennials start families and move to the suburbs, Kohl’s value and convenience can become increasingly relevant to a new generation of shoppers.” Another advantage for Kohl’s is ownership of 409 store locations, according to its 2020 10-K annual report. “Owning their own real estate increases the viability of Kohl’s as a company and their value to shareholders,” said Koepsel. “It insulates them from some of the ups and downs that come with retailing and allows them to have more control over what they’re doing.” That includes reducing store square footage to make way for complementary users, such as Planet Fitness and Aldi – other experimental partnerships masterminded by Gass – and ground leasing underutilized portions of its property to other retail business. From a local perspective, Kohl’s has offered consistency during an era of big-box vacancies and retail turnover. In Glendale, the store-owned property saw the decline of Bayshore as a regional mall and, more recently, its rise as a modernized town center. “During the entire Bayshore redesign, we incorporated the fact that Kohl’s would remain, so everything was designed and built around it,” said Mayor Bryan Kennedy of Glendale. “Kohl’s is very much an integral part of Bayshore. It’s part of what drives traffic to the area.”
Soon, Bayshore will gain a second anchor in Target, which is opening in the former Boston Store space adjacent to Kohl’s. Another complaint of activist investors is Kohl’s board has “failed to capitalize” on its real estate assets and proposed a large-scale sale-leaseback transaction in order to create shareholder value. The company has repeatedly shot down the suggestion, citing inefficiency as well as bond indenture restrictions. Koepsel said the argument is short-term versus long-term. While selling and leasing back its properties would immediately generate an influx of capital, Kohl’s is taking a long-term approach, eying the benefits of real estate ownership 10 or 20 years down the road, he said.
AT ODDS Throughout the proxy fight, Kohl’s management has touted its long-term approach as what’s best for shareholders and the future of the company, while painting the activists’ campaign as invasive, risky and short term. In March, the activist investor group reduced its director nominations from nine to five, claiming the purpose of its campaign is to assemble the “strongest possible” board of experienced leaders and shareholder advocates. The cohort is known for its role in the turnaround of Bed, Bath & Beyond in 2019. The fate of Kohl’s current board rests now in the hands the company’s shareholders, who will vote at the annual meeting on May 12. If all five activist nominees were elected, they would represent a minority of the entire board, which means that the group’s proposed plans may not be implemented. Nevertheless, it would be an “important step in the right direction,” the group said. Kohl’s stock price has shot up roughly 200% since November, which Swartz said, will likely deter shareholders from siding with the activists. “It kind of undermines the whole idea that some big change is necessary,” he said. n biztimes.com / 19
Special Report BANKING & FINANCE
Banks poised to help fuel reopening of economy BY ARTHUR THOMAS, staff writer BANKERS SPENT MUCH of the past year on the economic frontline as financial EMTs, a far cry from the more villainous image the sector emerged with coming out of the last economic crisis, the Great Recession. Last year, banks quickly became a major conduit for federal support for the economy, especially through the Paycheck Protection Program, which made more than 156,000 loans for $13.55 billion in Wisconsin. “That preserved a lot of jobs; 318 businesses borrowed from us to keep jobs that they probably wouldn’t have been able to keep,” said Dan Westrope, chairman and chief executive officer of Ixonia Bank. The scramble to approve PPP loans, remote work and more digital transactions also stand to benefit the industry and its workforce. Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association, said bank employees stepped up to take on tasks outside their normal responsibilities in an effort to help the PPP process. She said it was an opportunity for both personal and professional development for employees and a chance for bank executives to identify potential future leaders. “A lot of people have worked really, really hard over the last year, a lot of weekends, a lot of nights really taking care of our customers, so I have a lot of pride as I look back on how we got through it,” said Jay McKenna, president of North Shore Bank. Dave Werner, executive vice president and market president for southeast Wisconsin at First Midwest Bank, said many business customers had already embraced digital transactions, but the pandemic accelerated its adoption across customer demographics. “I don’t believe this change will completely eliminate the need for physical branches for certain, more complex, transactions. However, the 20 / BizTimes Milwaukee APRIL 12, 2021
WESTROPE
reliance on the branch for all banking needs has changed,” Werner said, noting branch design would continue to evolve to meet the new reality. The number of bank branches and offices in Wisconsin was already declining pre-pandemic. It was down 3.4% year-over-year at 1,855 as of June 30, higher than the average yearly decline in the prior five years. The last time there was a year-over-year increase in total offices was 2008. Banks also find themselves in a much different environment than the aftermath of the Great Recession. At the end of 2010, nearly 4.3% of loans and leases by FDIC-insured institutions in Wisconsin were not current compared to 0.7% at the end of 2020. Loss allowances totaled 3% of loans at the end of 2010 compared to 1.4% at the end of 2020. One reason the loans banks have are in a better position now is many actively sought to work with borrowers as the pandemic took hold. Westrope said some customers could make their whole payments while others could only afford interest or perhaps could not pay anything. He said Ixonia worked individually with people and while it took a lot of resources, the bank also learned a lot about how best to structure those forbearance and deferral agreements. “When it was widespread, it was just not the fault of the person that owed the money,” he said. In addition to having fewer loans in troubling condition, banks have also seen a sharp increase in their deposits from around $93 billion at the end of 2019 to nearly $107 billion at
OSWALD POELS
MCKENNA
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the end of 2020. Most of the increase came in the second quarter when the first $1,200 stimulus checks went out and the pandemic pushed people to save. Another round of stimulus hit consumer bank accounts since the end of the year, potentially pushing deposits higher. “Most banks, like our own, have strong capital bases and substantial liquidity, which we are eager to put to work,” Werner said, noting loan demand was generally weak outside of the PPP and some segments of commercial and residential real estate. “As the reopening of the economy accelerates, we expect to see, and welcome, an increase in demand for business loans to fund expansion and growth,” he said. Michael Hetzel, director of lending at the Wisconsin Women’s Business Initiative Corp., said demand for the smaller loans his organization makes is certainly there. “The biggest challenge I see right now is people are coming out of the woodwork,” he said, noting that because of uncertainty of the pandemic and the very small nature of many
of WWBIC’s clients, the organization is approaching most loans as if they were to a startup. Hetzel said he is cautiously optimistic going forward that WWBIC’s $24 million portfolio of around 1,000 loans has performed well through the pandemic, but that might change as government support fades. “That’s going to be the litmus test for our portfolio,” he said. McKenna said he is bullish about the opportunity and feels the economy is poised for strong growth. “Banking institutions, generally speaking, right now are flush with liquidity and have very strong capital levels and are very eager to lend,” he said. Banks will need to take a close look to understand if a business was permanently altered by the pandemic, McKenna said, adding there is also the possibility PPP forgiveness could temporarily distort a company’s financials. “At the end of the day, if a business has a strong case, they should have no problems finding money from banks to grow,” McKenna said. n
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Special Report BUSINESS IN RACINE & KENOSHA
B & L Office Furniture manager Scott Carpenter looks at photos of the former store’s interior. The bronze urn sitting on the table was one of the few items that survived the fire.
Kenosha business owners still in flux following 2020 riots BY BRANDON ANDEREGG, staff writer KENOSHA BUSINESS OWNERS displaced by the violent protests following the police shooting of Jacob Blake that left portions of the city burned to the ground last summer are still reeling from the aftermath more than seven months later. For some business owners, the lasting impact has been emotional, while for others the complete loss of their business has left an indelible mark on their finances. B & L Office Furniture is one of 70 businesses that were damaged during the riots, which Kenosha officials say caused more than $20 million in damages. The office furniture store was located on 60th Street when someone broke through display windows and set an office chair on fire. Linda and Bill Carpenter started the family business more than 40 years ago and, before August 2020, had planned to scale back and maybe even retire. But B & L was destroyed along with its entire inventory, which had a combined estimated value of $1.5 million. 22 / BizTimes Milwaukee APRIL 12, 2021
“Nothing was salvageable,” said Scott Carpenter, manager of B & L. “Dad tried to save some post legs, like what you would use to make a table. He cleaned them, wiped them off, used Goof Off and oven cleaner, those things still stink.” B & L reopened in the Kenosha Trade Park on Highway 50 in October with the help of Kenosha Area Business Alliance loans and grants from local organizations. The new location is much smaller, and the business is still behind financially, but Carpenter feels good about the future. “Looking at the numbers, there’s growth from what we did last year to this year,” Carpenter said. “And even in a pandemic society, business is still doing well for us.” B & L was insured, felt supported by the community, reopened and is now on the mend. Yet Carpenter is still grappling with the why of it all, especially for business owners still in limbo. “They were wiped out, probably wiped out some of their savings too.
For what? What purpose did it serve? It’s too bad and really sad for those people,” Carpenter said. The Kenosha Police Department is still investigating and said individuals have been charged with various crimes from the riots, including looting and arson. However, the department declined to provide any further details. “I am certain that at some point, we will share that information with the public so that the citizens of Kenosha can know that those who are responsible for the damage caused during the unrest are and will be held accountable for their actions,” Kenosha police lieutenant Joseph Nosalik said in a statement. To date, KABA has awarded Disaster Recovery Microloans to 46 different businesses totaling $2.35 million, said Heather Wessling Grosz, KABA vice president. The city enlisted KABA to disperse the $4 million DRM program, which is funded by the Wisconsin Economic Development Corp. The program provided physically
damaged businesses with 0% interest loans of up to $50,000 and a 4-year minimum repayment period. KABA has also partnered with Wisconsin Women’s Business Initiative Corp. and the Small Business Development Center to provide impacted businesses with entrepreneurial and financial workshops. The commercial district in Kenosha’s Uptown neighborhood on 22nd Avenue between 60th and 63rd streets was hit hardest by the riots, especially the western side of the block. At least three businesses on the block have relocated in the neighborhood including the Good Taste Ice Cream Shoppe, Uptown Beauty and the Mattress Store. The Furniture Warehouse moved its inventory to its Racine location. Computer Adventure, a computer repair shop on the less-damaged east side of 22nd Avenue, has since reopened. The store was looted heavily during the riots and several of its clients’ personal computers were stolen. Gorman & Co. has proposed redeveloping a retail building on 22nd Avenue, which burned in August and has sat boarded up and vacant ever since. The developer’s plans call for a mixeduse development with commercial space on the first floor and affordable apartments on the second floor. For the proposed project, Gorman has applied for new market tax credits and housing tax credits. Once tax credits are approved, Gorman will begin the approval process with the city, said Ted Matkom, Wisconsin market president at Gorman & Co. The project would take up to 18 months, but it may be possible to get displaced businesses back on the first floor sooner, Matkom said, adding that Gorman would like to be in the ground by fall. If the new development is completed as planned, Matkom says it would attract other developers and revitalize the 63rd Street corridor, including portions of Highway 50. “When you have a new campus of development, you really spur new ideas and opportunity to come in once they see the traffic it creates,” Matkom said. “I really think this will be a catalyst for people to look at that whole area differently and invest in it.”
Matkom will be a panelist for the free, virtual Racine/Kenosha County 2035 event, presented by BizTimes Media, on April 22. Although Gorman’s project may be a long-term solution, some displaced business owners with deep roots in the Uptown neighborhood – where their business model found success – feel defeated. La Estrella Supermarket owner Abel Alejo and Uptown Restaurant owner Yolanda Hernandez had operated their businesses in the neighborhood for six years before protestors burned their buildings. Both Hernandez and Alejo have been hard pressed to find a suitable location due to limited commercial real estate stock in the neighborhood. The business owners did find a possible location but have run into another hurdle with a contractor who has not performed the work that he was paid for, Hernandez said. “We have been without income
since August,” Hernandez said. “That’s why it’s very tough and why I feel so frustrated with this contractor who came and took my money.” Alejo and Hernandez have each received approximately $70,000 in grants and donations, but both businesses were underinsured. Alejo said the funds have been helpful, but they will need much more to recoup their losses. “Just looking at some of the equipment needs, especially on the refrigeration side, it’s going to be very expensive,” Alejo said. Alejo and Hernandez want to return to Uptown, but with their shortterm plan in flux and the long-term nature of Gorman’s proposed project, both feel discouraged. In the meantime, the Uptown neighborhood is without several services, including a source of fresh fruits and vegetables, which La Estrella previously offered to the community. The now derelict 22nd Avenue
Mattress Shop is one of multiple businesses on 22nd Avenue that has reopened since the violent protests last summer.
has encouraged more crime, Hernandez said. In January, a man walking along 61st Street, just east of 22nd Avenue, was fatally shot. Both Alejo and Hernandez said the neighborhood was improving ever since their businesses opened in Uptown. Teens, especially in the spring and summer months, used to pick up trash in the neighborhood in an organized effort, Hernandez said.
But with rising crime, she said she doesn’t think parents will be sending their kids to the neighborhood any time soon. “This is a big call to the mayor,” Hernandez said. “It’s not just a store or a restaurant, it improves the neighborhood to bring the peace again there.” Kenosha Mayor John Antaramian did not respond to a request for an interview. n
Major in you. 262-595-2355 | ADMISSIONS@UWP.EDU 900 WOOD RD, KENOSHA, WI 53144 UWP.EDU/ADMISSIONS
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Special Report BUSINESS IN RACINE & KENOSHA
GrandView Business Park is one of many business parks in Racine County that have seen continued investment over the years.
Racine County wrestles with challenges and opportunities to attract economic development BY BRANDON ANDEREGG, staff writer ANYONE FOLLOWING Racine County development news over the past three years has likely discovered ties back to Foxconn’s plans to construct a display panel plant in Mount Pleasant. While the development may not have lived up to expectations, and the future of the project is still uncertain, several involved in Racine County’s economic development say the county only stands to gain from the Taiwanese manufacturer’s presence moving forward. It’s no secret that Foxconn and Wisconsin’s relationship has been
24 / BizTimes Milwaukee APRIL 12, 2021
rocky. Foxconn drastically reduced the scope of its project and is now in talks with the state to renegotiate its nearly $3 billion incentive contract. The state has refused to provide any tax credits to the company under the existing deal, saying it has not met hiring or capital investment requirements to receive them. Foxconn has disputed the state’s denial of tax credits. The company also announced plans to produce high-tech coffee kiosks, and then later proposed to manufacture ventilators for the coronavirus pandemic at the Mount Pleasant complex. But both initiatives ended
soon after they were announced. How the Foxconn deal shakes out does have broader implications for Wisconsin, but the southeastern part of the state, including Racine County, is already benefiting from the infrastructure improvements that have been done for the project, said Jim Paetsch, vice president of corporate relocation for Milwaukee 7. Foxconn’s development fast tracked several road projects, including improvements to I-94, interchanges and roads surrounding the site. A considerable amount of fiber optics for high-speed internet has also been
laid, making developable land in the area all the more attractive, he said. Surrounding communities can now tap into sewer and water serving the Foxconn site, which provides Racine County a much larger chunk of development-ready land, Paetsch added. “All that infrastructure is going to be money well spent,” Paetsch said. “I am confident that Foxconn is going to turn into something significant, but the infrastructure is also going to unlock development opportunities in the areas that surround the site.” Racine County Executive Jonathan Delagrave called Racine County’s portion of the I-94 corridor “a canvas that has yet to be painted,” adding that becoming “a premier economic corridor in the United States” is his vision.
“You’re going to attract not just Foxconn partners; you’re going to attract other companies (because) they want to be in that vibrant corridor,” Delagrave said. The Racine County Economic Development Corp. and M7 have tracked a compendium of Racine County development projects spurred by Foxconn’s initial announcement. These projects, spanning from 2017 to June 2020, have either been announced, are in progress, proposed or completed. The two organizations estimate that if all projects come to fruition, at least 2,583 jobs and 2,912 housings units will have been created while all projects together equate to capital investments of more than $1.2 billion. Development has boomed in Kenosha County largely because of its proximity to Chicago. On Racine County’s northern end, the DeBack Farms Business Park continues to attract companies while the county’s other business parks, including GrandView, draw continued investment. Because Racine County is the confluence of Chicago’s northern expansion and Milwaukee’s southern expansion, Paetsch envisions the entire I-94 North-South corridor filling in over the next 10 years. Infrastructure improvements related to Foxconn’s project have drawn new business, but they are also attracting a diverse mix of housing – one of Racine County’s greatest needs, Delagrave said. The county has spent the past several years working with municipal leaders and developers to address the lack of diverse housing options. Although housing remains a challenge for the county, city of Racine mayor Cory Mason says municipalities are now recognizing the value that diverse housing provides. One such project is Bear Development’s Canopy Hill in Union Grove, a 160-acre housing development that includes a mix of single and multi-family homes, condos and senior living. Foxconn and proximity to employment is one of several factors that attracted Bear Development to Union Grove, said S.R. Mills, Bear De-
velopment chief executive officer. “Foxconn has certainly been the talk for some time,” Mills said. “We believe whatever they end up doing within those facilities, we’re just going to see continued employment. And again, there’s just such a demand for any type of housing at this point that we think it makes a lot of sense.” There is a broader trend of families in Racine County moving to its western communities, including Burlington, Waterford and Union Grove, Mills said. For some families, it’s the allure of a rural atmosphere; for others, it’s the higher performing school districts that draw them west. “There’s certainly things happening in Racine proper, but I think it’s fair to say that proportionately, there’s more (residential) development west of the interstate in Racine County,” Mills said. But some housing developments are cropping up in the city of Racine too, including 141 affordable and market-rate apartments at the former Ajax industrial site, and Gold Medal Lofts, a 77-unit mixed-income apartment complex on Racine’s south side. Because the city is landlocked, many of its housing projects call for an adaptive reuse design, which historically is a more challenging type of housing development. However, Mason believes developers and families may take a second look at the city’s neighborhoods following Racine Unified School District’s recent $1 billion referendum, which calls for closing nine schools and building five new ones. “Some of those schools are over 150 years old,” Mason said. “To have them replaced with new modern facilities that are able to provide great education opportunities to kids, I think that’s a real economic advantage we will have moving forward.” Economic disparities continue to be a major area of concern in Racine County, Mason said. The county is split by I-94, where the world views and values of eastern and western county residents have historically diverged. In many ways, Racine
Paetsch
Delagrave
County is almost as if Milwaukee and Waukesha were placed within the same county, which introduces challenges when developing a shared vision for the future, Mason said. Western Racine County residents are concerned with preserving the rural atmosphere of their communities while those in the east are faced with unemployment and workforce development needs. One solution to bridge the divide is to ensure that Racine County residents understand how both the hurdles and successes in each community impact the entire county, Delagrave said.
Mason
Mills
“It’s not competing; it’s how can we grow together and be successful while adhering to that diversity that we think is a huge strength of ours,” Delagrave said. “Essentially it’s saying, ‘we’re all in this together.’” Greater access to transportation, whether that’s roads, rail or bus systems, would also bring county residents closer together, Mason added. “It would help culturally with our sense of a shared future, but it would also help economically as well,” Mason said. “I think people have to understand that we’re all connected and how one part of the county does is going to affect the broader county.” n
Proud to be part of the Racine/Kenosha growth
biztimes.com / 25
Special Report BUSINESS IN RACINE & KENOSHA
Racine/Kenosha County 2035 event to focus on area’s assets, critical challenges for future
BY ANDREW WEILAND, staff writer
FOR YEARS, several businesses from Illinois have chosen to move or expand north of the state line into Kenosha County. One of those companies is Haribo of America, Inc., the Rosemont, Illinois-based division of the German maker of gummy candy. The company considered 112 different sites in numerous states for its first North American manufacturing facility and chose a site along I-94 In Pleasant Prairie. There, the company is building a 500,000-square-foot complex that is expected to employ 385 people when it is completed in 2022. Future expansion phases could bring employment to more than 1,000 at the Haribo complex. “One of the attractions (to Kenosha County) for us was the collaboration between the different organizations in Wisconsin to attract and on-board new businesses,” said Wes Saber, executive vice president and chief financial officer for Haribo of America. “All the way from the state level, Wisconsin Economic Development (Corp.), KABA (Kenosha Area Business Alliance), which is a very unique organization, the village, as well as the educational institutions.” Saber will be one of four business leaders on the main panel for BizTimes Media’s upcoming Racine/ Kenosha County 2035 event (biztimes.com/2035). The free, virtual event, to be held from noon to 2:30 p.m. on Thursday, April 22, will focus on the opportunities and challenges that face this critical area of southeastern Wisconsin. In addition to Saber, the speakers on the main panel for the event will include John Batten, chief executive officer of Racine-based Twin Disc, Inc.; Ted Matkom, Wisconsin market president for Gorman & Company; and Chad Navis, director of industrial investments for Zilber Property Group. Unlike Haribo, Twin Disc is well established in the area, having been based in Racine for 103 years. The area’s strong manufacturing workforce and supply chain have helped keep 26 / BizTimes Milwaukee APRIL 12, 2021
Matkom
Navis
the company in the area all of those years, Batten said. However, Racine County has not done as good of a job as Kenosha County in attracting new businesses, he said. Kenosha County has an advantage due to its location just north of Illinois. But another issue is that Racine County’s communities have not worked together as well as those in Kenosha County, Batten said. “I think eastern Kenosha County works much better together – the city, Pleasant Prairie and Somers – I see their working relationship much better than eastern Racine County, east of I-94,” he said. Asked if Racine County has fully taken advantage of its location between Milwaukee and Chicago to attract businesses, Batten said, “I would say that’s a hard, ‘no.’ We haven’t. Attracting companies is a bit like going to the gym if you haven’t done it in a while. It’s tough at first, but it’s good for you in the long run. We desperately need to be even half as successful as Kenosha County in attracting new businesses.” Kenosha County’s biggest asset is the work done by KABA, said Matkom. Gorman has done development projects in Kenosha and Racine, and KABA is the biggest difference between doing business in the two communities, he said. “The cog in the wheel in Kenosha is KABA,” Matkom said. “There is nothing like that in Racine.” One challenge both Racine County and Kenosha County are facing is attracting the talent that businesses need. According to U.S. Census Bureau estimates, Racine County’s population has grown only 0.5%
Saber
Batten
since 2010 and Kenosha County’s has grown only 1.9% during that time. “That’s a challenge for the state of Wisconsin and southeast Wisconsin, attracting talent and developing talent,” Saber said. “It’s only going to get more difficult (to find quality employees) until we start bringing in, recruiting talent into the area,” Batten said. “Labor is difficult just about everywhere,” Navis said. “It is a condition that impacts this region, but I also think it’s quite common.” Following the main panel discussion, the Racine/Kenosha County 2035 event will have a pair of concurrent breakout discussions, an education and workforce panel and an economic development panel, to take a deeper dive into the talent and economic development issues mentioned by the main panelists. The education and workforce development panel will include: » Debbie Ford, chancellor of UWParkside » Bryan Albrecht, president and CEO of Gateway Technical College » John Swallow, president of Carthage College The economic development panel will include: » Todd Battle, president of the Kenosha Area Business Alliance » Tim Casey, director of city development for the City of Kenosha » Jenny Trick, executive director of the Racine County Economic Development Corp. To register for the free, virtual Racine/Kenosha County 2035 event, go to biztimes.com/2035. n
A special message from BizTimes Media’s RACINE / KENOSHA COUNTY 2035 event sponsor:
Opportunity and responsibility go hand-in-hand. Racine and Kenosha Counties are experiencing economic development of epic proportions. Respecting the heritage of these communities while also ensuring that the new and veteran businesses and residents have the critical infrastructure to thrive is a challenge to be embraced. Davis|Kuelthau is proud to be a partner to many in the trajectory of their businesses and this region. We help clients from the boardroom to the courtroom and beyond. Since our firm’s origin, our attorneys have helped hundreds of local and national entities grow and thrive. Our team of corporate, employment and litigation attorneys is uniquely positioned to help owners and other executives navigate their legal challenges every day. From navigating zoning restrictions to incorporating tax and wealth preservation strategies, executing strategic purchase or business sales, advising on the myriad of workforce challenges, and protecting business interests in litigation, we offer far more than just present-day legal advice. We bring real-world experience, understanding, and a results-oriented mindset to help clients achieve their objectives. Together, we can better ensure that businesses continue to thrive, additional development can be pursued and workers are connected to the opportunities stemming from this success. To learn more about our services, please visit www.dkattorneys. com. In the interim, we hope you enjoy the summit.
LINDA HOOVER PRESIDENT AND CEO EDUCATORS CREDIT UNION
BizTimes Milwaukee is proud to
present
the
inaugural
showcase of Notable Credit Union
Leaders,
spotlighting
accomplished professionals in the region. The leaders profiled on the following pages were nominated by their peers and showcase the diversity of talent in our market. The leadership shown by the individuals profiled here is setting an example to shape a better future for our region.
METHODOLOGY: The honorees did not pay to be included. Their profiles were drawn from nomination materials. This list features only individuals for whom nominations were submitted and accepted after a review by our editorial team. To qualify for the list, nominees must be based in Wisconsin. Criteria considered for inclusion includes holding a senior leadership position in their firm, holding a leadership position in their industry outside of their own organization or acting as a role model or mentor.
Linda Hoover, president and chiefexecutiveofficerofEducators Credit Union, has led her team inkeepingall26EducatorsCreditUnion branches in southeastern Wisconsin open to their more than 207,000 members during the COVID-19 pandemic. Hoover also took care of the credit union’s 525 staff members. Educators did not furlough or lay off a single employee. EducatorsisthefirstandonlycreditunioninsoutheasternWisconsin to offer video banking during the COVID-19 pandemic, accordingtoLisaEhlke,vicepresident ofpublic relationsat ZizzoGroup.Andinaboutamonth,EducatorslaunchedEducators WeCU video banking, which has gone from 20 sessions its first day to more than 3,000 sessions per month. Hoover has led Educators, which was recognized as one of the bestcreditunionsinWisconsinbyForbesmagazinein2019and 2020, to donate $100,000 to Advocate Aurora Health to help with COVID needs, provide 4,000 Milwaukee Public Schools homelessstudentswithabackpackofschoolsupplies,provide funding to the Racine Unified School District for Zoom and donate more than 5,000 masks to local schools. She is also a member of the board of directors of several local community organizations.
biztimes.com / 27
KIM SPONEM
GARY SZPARA
PRESIDENT AND CEO
VICE PRESIDENTBUSINESS SERVICES
SUMMIT CREDIT UNION Kim Sponem has been presidentandCEOofSummitCredit Union for nearly 20 years. In that time, she has grown the organization to be one of the largest credit unions in Wisconsin, with $4.5 billion in assets and more than210,000members.SummitisbasedinCottageGrove,and has been growing into the Milwaukee area for the past decade. Under her leadership, Summit has been named the #1 Small Business Association (SBA) Lender in Wisconsin, among credit unions, by number of SBA loans approved. Through the COVID-19 pandemic, Summit has provided SBA PaycheckProtectionProgram(PPP)loans.Summitfunded1,400 PPP loans in 2020 for $59 million to help small businesses, more than any other credit union in the state. Whenthepandemichit,Sponemhadthebusinesslendingteam proactivelyapproachSummit’sbusinessmembersmostlikely to be hit hard by the impacts of the pandemic with help and solutions, according to Mike Jones, Summit’s managing vice president of business services. Sponem recognizes that diversity is a strength and that businesses have a role in creating greater equity and inclusion for all, Jones said. More than a decade ago, she led Summit’s shift to focus on women, including women who own businesses.
CHRISTINE MOCZYNSKI PRESIDENT AND CEO
SUMMIT CREDIT UNION In the past year and a half, Gary Szpara has put his 40 years of business-lending experience in southeastern Wisconsin to use in a challenging time for businesses. As vice president-business services at Summit Credit Union, which provided the most Paycheck Protection Program (PPP) loans among credit unions in Wisconsin and the third most among all financials in 2020, Szpara offered guidance and supporttobusinessmembersandthegreaterbusinesscommunity. In his current role as chairman of the board of the New Berlin Chamber of Commerce, Szpara has leveraged his knowledge of the program to provide the chamber’s membership (about 250 smallbusinesses)withinformationonnavigatingPPPapplications, regulationsandwhatotherbusinessesweredoingtosurviveand thrive.Ittriggeredlotsofgratitudefromthebusinesscommunity. “He’ll say, ‘No matter what you want, come to me first, and I can helpwithSummit,’”saidKimSponem,CEO/presidentofSummit Credit Union. Szpara also contributes to his home community as the market manager for the New Berlin Farmers’s Market for the past three years,andheisactiveintheMetropolitanMilwaukeeAssociation ofCommerce(MMAC)andtheWaukeshaCountyBusinessAlliance.
PRIME FINANCIAL CREDIT UNION Diversity and inclusion are at theforefrontofPrimeFinancial CreditUnion’sstrategicinitiatives. ForChristineMoczynski,presidentand CEO of Cudahy-based Prime Financial, the key question is: “Does our membership reflect the community in which we serve?” Shebelieveswiththeracialwealthgap,thefinancialservicesindustrycantakeanactiveroletofightracialinequality,accordingtoAmy Miller,PrimeFinancial’sdirectoroforganizationaldevelopment. In2015,thecreditunion’soutreachtotheHispaniccommunity began. The effort included policy, process, and people changes,suchasITINlending,Spanish-speakingteammembers,and community involvement. The outreach has resulted in 7.6% membership growth to date. In 2021, Prime Financial intends to expand this model to the Hmong community. Seventy percent of its members live in low-income designated areas. “Chris is the perfect mentor to motivate the team,” Miller said. “Herdemeanoriscalm,relatable,andauthentic.Sheremindsus that we’re here to serve our members. We work hard to understandourcommunity’sneedsandtomeetthemwithpassion.”
GIRLS ON TH E R UN PHONE: (414) 367-8171 WEB: girlsontherunsoutheasternwi.org NOTABLE
MINORITY EXECUTI
VES
RACHAAD HOWAR
D
OWNER LOUNGE CREAM CITY PRINT
in a little ago, making shirts he more than 10 years Three years later started his business out of a backpack. Rachaad Howard and selling the shirts to grow ever since. two-bedroom apartment shirts and has continued and bike cart to sell his kept working hard had built his first were failing, Howard many small businesses diversity and inclusion. In 2020, a year when to carry his line promoting a trend.” a deal with Kohl’s not “Black culture is it paid off, including is 12 designs including The West Allis business The Kohl’s line included just over a year ago. hang out, City Print Lounge guests a space to Howard opened Cream lounge that allows printing party. apparel and private t-shirt making an interactive retail or host their own it be even have a drink for a cause. Whether print t-shirts and art or it is a walking billboard youth on business, not just a business, mentoring or “His business is the helping the homeless, founder of Against social injustice, inclusion, is here to help,” said Brianna Roeck, , Rachaad marketing new businesses. entrepreneurship with branding and and blog that helps Grain LLC, a life brand
ECUTIVES INORITY EX N O TA B L E M
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Congratulations
TO SUMMIT’S NOTABLE CREDIT UNION LEADERS Together we’ll continue to help people create the financial lives they want so they can reach the goals they’ve set for themselves in business and in life.
“I’m honored to be recognized and incredibly proud of the impact Summit has had during the past year.” Kim Sponem CEO & President
“It’s been a privilege to help so many businesses in the Milwaukee area and throughout Wisconsin navigate a challenging year.” Gary Szpara VP Business Services
Insured by NCUA
PAUL KUNDERT
PATRICK MARTIN
MIKE BRANDT
PRESIDENT AND CEO
ASSISTANT VICE PRESIDENT OF BUSINESS LENDING
PRESIDENT AND CEO
UW CREDIT UNION Paul Kundert, president and CEO of UW Credit Union, takes a kind, empathetic approachtoleadership,according to University of Wisconsin-Milwaukee vice provost Phyllis King. Duringahistoricyearthatincludedbothapandemicandaturning point for racial justice, those qualities were the foundation to driving change, King said. UWCU funded more than $2.8 million in emergency personal loans to more than 1,500 members. To make loan extensions easierandmoreaccessible,UWCUdeployedanonlineloanpaymentextensionapplicationinlessthantwodays.Todate,UWCU has processed more than 13,000 loan payment extensions to more than 9,100 members, charging n o fees for this service. Inatimewhenracialissuesareconsideredlightningrodsubjects, KundertsawopportunitywithinUWCUtoleadbyexampleandprioritize diversity, equity and inclusion (DEI), King said. Kundert’s commitment to DEI has taken the shape of several largedonationstosupportcommunitiesofcolordisproportionally impacted by the COVID-19 pandemic. Last month, UWCU announced the UW Credit Union Fund for Racial Equity, a $1.5 million grant program tailored to organizations that focus on racial justice, $500,000 of which is earmarked exclusively for Milwaukee-area organizations.
LANDMARK CREDIT UNION PatrickMartinhasworkedinthe banking industry since 2002 and is currently an assistant vice president of business lending for Landmark Credit Union. He leads Landmark’s new Focus Real Estate program designedforpurchasingorrefinancingcommercialowner-occupied buildings or smaller apartment buildings, primarily in Waukesha and Milwaukee counties. He also has experience in consumer lending and commercial lending. Martin has served as an FDIC Money Smart for Small Businesstrainer,workingwithchambersofcommerceandcitywide organizations to provide small business trainings to new andestablishedbusinessesinvariousMilwaukeecommunities. Martin also currently serves as president of the board of directors and chair of the Loan Review Committee for the Hmong WisconsinChamberofCommerce(HWCC)andtreasurerofthe board for the City of Waukesha Chamber of Commerce. He has served on the Financial Stability Initiative Committee with La Casa de Esperanza and as vice president of the New BerlinChamberofCommerceandVisitorsBureau.Hehasalsobeen amemberoftheAmbassadorCommitteefortheDelafieldArea Chamber of Commerce/Tourism.
EMPOWER CREDIT UNION Under the leadership of president and CEO Mike Brandt, EmpowerCreditUnioncreated Change for Charities, a program designedtomakeapositiveimpactin the community – a few coins at a time. Theprogramallowsmembersto rounduptheir debit cardpurchases and donate the difference to select nonprofits. In2020,Empowermatchedmorethan100%ofmembercontributions,raisingmorethan$11,000sharedbyHungerTaskForce and Humane Animal Welfare Society (HAWS). Empower also lends their space to HAWS for mobile adoption events, where members can take home a new pet right on the spot. In less than three years as president and CEO of Empower, Brandt’s work ethic has allowed Empower to emerge as a local leaderinsoutheasternWisconsin.Hehasinvestedinthegrowth of his employees and the evolution of the credit union, all the while giving back to the community, according to Beth Gleesing, vice president of client services at z2 Marketing, which partners with Empower in Change for Charities. His colleagues at Empower Credit Union, his corporate partners — everyone from his board of directors to the community organizations he supports, all agree, Gleesing says. Brandt is a person of action.
Congratulations!
Congratulations Paul! It’s A Little Ad, But The News Is Huge. For his well-earned recognition by BizTimes as one of 7 Notable Credit Union Leaders for 2021, we’re tipping our caps to UW Credit Union CEO Paul Kundert. All of the members of UW Credit Union and the communities we serve are proud to have Paul receive this honor. Here For Every You. uwcu.org
30 / BizTimes Milwaukee APRIL 12, 2021
Patrick Martin Notable Credit Union Leader
Assistant Vice President, Business Lending (262) 796-4500, ext. 5045 | patrickmartin@landmarkcu.com landmarkcu.com
Strategies FAMILY BUSINESS
The most capable heir Great interest in family dramas
Even those of us who call ourselves pro-business are intrigued when a family that has made it to the pinnacle of corporate success meets their demise.
HOLLYWOOD has recently become enamored with the family business both in fiction and reality television. Admittedly, I did not watch the Royal Rumble live, when Harry and Meghan hung their dirty familial laundry out to dry. However, there was certainly enough social commentary for me to catch the gist of the statements made and assertions proffered. Regardless of the voracity of their statements, the Royal Juniors made a mistake one could call a cardinal sin. Never air your grievances in public. I have left many a meeting between parents and children, and owners and board, where disagreement led to a united face in public. This could not
be further from the truth with “The Firm,” as Meghan liked to call the Royal family during the now omnipresent Oprah interview. Less common in your television viewing may be two shows any family business participant may be interested in catching. “Succession” on HBO is in the second season of an aging mega-maniacal owner of a media conglomerate searching for the successor to his business. Brian Cox is the father who creates the chaos by telling each of his children that they are the heir apparent, setting up a competitive free-for-all. Complicated by a health scare and a behind-the-scenes third wife who controls power that is unforeseen, the show pivots around three children all desiring the mantle from their father through a twisted love-and-hate melee. All that is missing is an Oprah interview to stir the pot a bit more. The show “MotherFatherSon” on BBC Two walks the viewer through another media family going through transition. Apparently, no other industry has challenges in succession ... unless you are a Royal family. Richard Gere is the aging father this time, having turned over the face of the business to his demon-addled son whose demeanor and personality do not align with his father’s Machiavellian ways. In another consistent theme, the divorced mother is exiled to volunteering in a homeless kitchen until she steps forward to help her son after a stroke and her ex-husband after removing his son from power due to weakness. So, why the sudden interest in family businesses and their transition? Well, the truth is the interest has always been there. Harken back to the Kennedy family and our morbid fascination with that train wreck, from multiple assassinations to rape and murder allegations all taking place in America’s Royal family known as Camelot. Sadly, the common theme in all of these stories is our prurient fascination with wealth imploding. Even those of us who call ourselves pro-business are intrigued when a family that has made it to the pinnacle of corporate success meets their demise. Even the great Medici met their end after 791 years of rule when the last Medici ruler met his untimely early death without producing a male heir. But this presents a second interesting theme
that runs through these three stories: the rise of the woman. In the case of the Royals, the males are overshadowed by their wives: Camilla, Kate and now Meghan. Even the most beloved heroine in the family was the tragic figure Diana, not the Queen, her sons or grandsons. In the dramas Succession and MotherFatherSon, the strength and silent power of the females come to the fore and presumably will be highlighted as pandemic-interrupted seasons return from hiatus. So, what does this tell us of the state of affairs in the family business? For too long the presumptive head of the family, the male heir, has taken their place when perhaps the most capable heir is the gender most overlooked to the peril of many a family business. n
DAVID BORST Dr. David Borst is executive director and chief operating officer of Family Business Leadership Partners, a regional resource hub for family business. He can be reached at david.borst@cuw.edu. biztimes.com / 31
Strategies PREPAREDNESS
Run, hide, fight What to do if there is an active shooter at work YOU WANT TO BE READY for all kinds of emergencies, like tornadoes and fires, that can disrupt your workplace. Unfortunately, you should add “active shooter” to your emergency preparedness plans. This year alone, more than 120 people have been killed and 380 injured in mass shootings, including the shooting in March at a Boulder, Colorado grocery store. A few years ago, I collaborated with the Milwaukee Police Department to implement an active shooter policy with a local nonprofit organization using the “Run. Hide. Fight.” protocol. The request came following mass shootings across the United States. The employees wanted to be prepared. In a crisis, you too want to have a plan. John Mathews, author of “Mass Shootings: Six Steps to Survival,” says: “You have to be prepared. You have to practice. If you don’t, you’ll never be able to implement the plan effectively.” Here are my experiences developing an active shooter “Run. Hide. Fight.” procedure from two perspectives: preparing the general staff and preparing the leadership team.
PREPARING YOUR GENERAL STAFF Employees were surprised to learn these tips during their active shooter training: Run. Always evacuate the premises if possible. » When leaving, raise your hands above your head for law enforcement to see. » Understand your exit plan and how you should notify your employer when safely out of the building. » Answer police questions. Only designated leaders with media training should com32 / BizTimes Milwaukee APRIL 12, 2021
ment to the media. Hide. When running is not an option, hide silently in a safe place. » Know where designated places are located. » Turn cell phones off, including the vibration mode. » Understand the risks of prematurely opening the door to your hiding place. Fight. Fight the attacker as the last resort when you cannot run nor hide. » This requires full commitment to do everything possible “to cause severe or lethal injury to the attacker.” » Consider offering a self-defense program, such as martial arts, for your staff. Or, Delta Defense in West Bend offers self-defense firearms training and conceal carry insurance.
PREPARING YOUR LEADERSHIP TEAM As a lead person, I collaborated with local police and insurance company agents to create the formal procedure. The logistics included identifying escape routes, safe rooms, off-site shelter locations for medical assistance and police check-ins. My local police department then evaluated our “Run. Hide. Fight.” procedure for my specific business setting. The health insurance agent helped incorporate mental health assistance plans for staff and affected family members. Internally, we updated the crisis plan around handling communications for staff members and their families, police and the media. “You don’t want your company’s worst moment to be your first moment in front of the media,” says Katrina Cravy, an Emmy award-winning Milwaukee journalist and co-founder of CharismaQ, a coaching and training company. Cravy shares these five crisis planning rules: Rule #1 - Know your audience. During an active shooter situation, one of your first audiences is your employees and their families. No family member should ever hear about the loss of a loved one through the media. Your HR department should have an emergency contact list with cell
phones and emails to push out an immediate message. Rule #2 - Own the story. Have a plan in place before you need it. Assign your executive team to different audiences. Create some simple press release templates to prepare for any crisis. You’ll save a lot of time when seconds count. Rule #3 - First impressions matter. When the media arrives, know which leader has the proper training to go on camera and deliver the company’s message with the right look, tone and confidence when emotions are high. Rule #4 - Be human. No one wants to hear “our hearts and prayers go out.” Say something that truly matters and doesn’t sound like corporate-speak. Rule #5 - Stay focused. Only answer the question you were asked. Don’t speculate or release more information than you intended. There is no perfect plan for every situation. Training your staff and leadership in active shooter procedures prepares them for possible workplace scenarios but can also save lives in general public settings such as malls or restaurants. n
LIZA L e CLAIRE Liza LeClaire has operated a regional retail business since 1990 and has taught MBA classes since 2017. She leads an executive board for Vistage Worldwide, Inc., a professional development group for CEOs, presidents and business owners. She can be reached at LizaLeClaireConsulting@gmail.com.
HUMAN RESOURCES
Fair compensation Ensuring pay equity in your organization BEFORE WE PROCEED, let’s address these two questions: » Are you prepared to answer difficult questions from employees on your team related to their pay? » Do you honestly feel all employees who work at your organization are being paid competitively? If your answer is “no” to either of these questions, proactive steps need to be taken to ensure that you are not caught off guard in a legal challenge or discrimination claim. Employees want to feel they are being paid fairly for their work compared to market rates. Also, your organization needs to audit internal pay equity so there is no suspicion of preferential treatment. We may think that employees don’t talk about their pay with co-workers; however, it happens. When one of your employees comes to you and asks: “Why is John paid a higher salary than me?” you need to be prepared with a response. A human resources compensation professional can provide the information needed to answer those difficult questions. There could be a variety of reasons why John is being paid higher. Possibly, he has worked in the industry for many, many years. This can explain some differential in pay. However, this reason may not be sufficient to justify a huge disparity if the work being performed is the same and the person bringing up the disparity is a stellar performer. Each situation of discrepancy in pay needs to
be assessed individually. Without conducting a formal audit using the services of an experienced professional you may not get the answers and responses you need to be conclusive in your response to your team. If there are areas where disparate pay exists, a plan of action needs to be prepared in order to document you are making a good faith resolution to existing problems. If no disparity is present in your organization, you then have the audit documentation to support that finding. The method to determine differentials in pay can be determined in a variety of ways. Most organizations look at specific jobs where the employees are doing exactly the same thing in order to compare base pay to external market and internal rates. Definitely, a review of pay for male versus female and people of color versus white employees who are doing the exact same job needs to be conducted. This should be a consistent process across your organization. Identification of outliers to the median rate of pay is necessary. Unless you can identify specific reasons for disparate pay, recommendation for adjustments are necessary. An objective analysis will review the employees and pay without consideration for personality or company legacy factors. Communication to employees of an equity audit can add a significant engagement. Most employees want to know that they are being paid fairly. Also, most employees may feel that their manager has not gone through the exercise to compare their salary to market rates of pay, nor to the other members on the team. The more your employees know about how their own pay is determined, the more they are engaged and motivated to perform at a higher level. It’s a fact.
nity Commission), all employer information related to employees in this particular job or group of jobs becomes part of governmental review. Typical documents requested will include job descriptions, performance reviews, history of merit increases for the named employee and related peers, for starters. Additional documentation will be requested as the investigation continues. Damages that an employer may incur as part of this process are: 1. Retro back-pay to the impacted individual for up to 3 years. 2. Fines and interest related to the back-pay amount. 3. Distrust from other employees on how they are being paid, the risk of additional discrimination claims to follow. 4. Public embarrassment if the information is exposed to the media. Bottom line, it is imperative for you and your company to be proactive in the salary review process. n
WHY IS IT IMPORTANT TO PROACTIVELY DO AN AUDIT? Any of your employees have the ability to file a discrimination claim if they feel they are being paid unfairly compared to their peers within your company. You, as the manager or senior leader in the organization, are responsible to be prepared and address improper situations before they become an issue. If a discrimination claim is filed with the EEOC (U.S. Equal Employment Opportu-
NICOLE SCHMIDT Nicole Schmidt is a human resources consultant and the owner of Reward Strategies LLC (hrrewardstrategies.net). Previously, she was a global compensation manager for A.O. Smith. She can be reached at rewardstrategies@yahoo.net. biztimes.com / 33
Strategies
Tip Sheet Offsetting loss with new revenue streams
A
fter a year marked by loss and challenge, many small businesses are looking at a long road to full recovery. One solution to offset losses is tapping into new revenue
streams. A recent article by SCORE gathers insight from financial experts and small business owners on boosting the bottom line. Here are some tips: 1. Launch new products and services Necessity is the mother of invention: Look for gaps in the market that your business could fill and do it with a product or service you’ve never offered before. It’s time to innovate. 2. Take stock Asses your current abilities and processes before creating a new revenue stream so that it aligns with your main product or service. In order to be profitable, the new revenue stream can’t drain your limited resources. Consider how various forms of waste can be repurposed into profit. 3. Expand into new markets If financially viable, entering new markets will not only create new sources of revenue but also new ways of doing business,
especially if you expand internationally. 4. Form partnerships Connection is key. Join forces with brands that have complementary services as a source of referrals. Successful partnerships deliver value to both parties. In the words of one business owner, “Think about how you can create value for a partner first and then make a pitch.” 5. Market your expertise Offer online classes or seminars on topics within your expertise. Sharing your knowledge on entrepreneurship or growing a business (for a price) will, in turn, help other leaders and companies recover from a devastating year. 6. Sublet office space Paying rent for an empty office? Offer a sublease to another business that could put it to better use while your employees work remotely. n
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BizConnections BIZ PEOPLE
Advertising Section: New Hires, Promotions, Accolades and Board Appointments
FINANCIAL SERVICES
SVA Certified Public Accountants Welcomes Richard Kollauf as Principal
SVA Certified Public Accountants is proud to announce the hiring of Richard Kollauf, JD, CPA, CFP®, AEP®. Rick has been hired on as a Principal to lead the firm’s Trust & Estate Compliance service line. He has more than 35 years of experience working in financial, accounting, and legal operations. His expertise in the multi-faceted financial environment includes business succession planning, tax, investments, finance, mergers and acquisitions, estate planning, and trust administration. He also has experience in estate planning and distribution for complex operational and investment multi-state businesses.
PROFESSIONAL SERVICES Nancy LaViolette, VP, Recruiting Process Insourcing, has joined Lauber to lead the new Human Resources service, Recruitment Process Insourcing (RPI). Nancy comes with over 24 years of experience in the Recruiting and Staffing Industry.
HEALTHCARE
Saint John’s Communities, Inc. welcomes Matthew Loyd as COO to its Executive Team. In this newly created role, Loyd will oversee Saint John’s reinvented Health Center, Marketing, Dining and LifeStreams wellness programming. Loyd brings more than two decades experience in not-forprofit senior living community leadership. Most recently, Loyd was Vice President of Health Services at Oklahoma Methodist Manor in Tulsa. An advocate of longterm care culture change, he has previously led three organizations through the transition into personcentered care environments.
PROFESSIONAL SERVICES
Kim Lyden Joins Lauber Business Partners’ Recruiting Process Insourcing
Kim Lyden, Recruiting Manager, has joined Lauber as part of the new Human Resources service, Recruitment Process Insourcing (RPI). Kim comes with 15 years of experience in the professional staffing and recruiting industry.
HEALTHCARE
Saint John’s Communities, Inc. is delighted to announce that Cristina O’Brien, PT, DPT, MPH, ATRIC, has joined our team as Director of Physical Wellness. In this new role, O’Brien will be responsible for all fitness and therapy services. O’Brien earned a Master of Public Health (MPH) at the Medical College of Wisconsin; a Doctor of Physical Therapy (DPT) at Marquette University where she also completed her under-graduate studies Bachelor of Arts (BA) – Spanish Language and Literature, & Psychology.
FINANCIAL SERVICES
Catholic Financial Life announces Sara Walker as VP of Investments. Walker will oversee the organization’s $1.7 billion investment portfolio. Walker is a graduate of UW-Parkside and has an MBA from UW-Milwaukee. She is a Chartered Financial Analyst.
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BANKING
Ixonia Bank proudly announces that it has appointed Ryan O’Connor as its new Senior Vice President & Chief Operations Officer. Ryan will serve as a member of the executive leadership team and will be directly responsible for the management of deposit and loan operations, customer solutions and information technology. He also will be a participant in the development and execution of the bank’s operational and strategic initiatives.
ANNOUNCEMENTS To place your listing, or for more information, please visit biztimes.com/bizconnect
NONPROFIT SUSSEX IM, HARTFORD-BASED NONPROFIT BUY FORMER GIRL SCOUTS CAMP PROPERTY Sussex IM and Hartford-based nonprofit organization Laudato Si’ Project have purchased portions of a 225acre former Girl Scouts camp property in Dodge County. The Sussex-based custom injection molding business has acquired 110 acres of the former Camp Winding River – located in Neosho, about 15 minutes north of Oconomowoc – with plans to make it available for company events and employee recreation. The new “Camp SIM” will be used for meetings, team building events, company picnics, and will be available for employees at their leisure. Laudato Si’ Project purchased an adjacent 59 acres of the camp property to establish
its new home and an ecology center. The property will give the organization a central location where it can offer its programs, including ecology education, hikes, retreats, prairie and butterfly garden plantings, and restoration service projects. Clare Gardens, an organic gardening and education program of Milwaukee Catholic Home, also plans to open its community garden on the campgrounds. Girl Scouts of Wisconsin Southeast disclosed in October 2020 its plans to sell Camp Winding River and Camp Pottawatomie Hills in East Troy as part of a long-range property plan. — Lauren Anderson, staff writer
c alendar The 10th annual Milwaukee’s Finest program, hosted by the Cystic Fibrosis Foundation, will hold its celebration event on Thursday, April 22, at 12 p.m. The program honors young professionals who show leadership, are active in their communities and have excelled in their profession. The event will be streamed at facebook.com/ CFFWisconsin. More information about the program is available at finest.cff.org/Milwaukee. The United Community Center will host its 51st anniversary virtual celebration on Thursday, April 29, at 6 p.m. The “Making 2021 One of a Kind” event will be held via AnywhereSeat, with tickets available on a “name your own price” basis. More information is available at unitedcommunitycenter.anywhereseat.com/channel.php.
D O N AT I O N R O U N D U P American Family Insurance contributed $44,000 to support Hank Aaron’s Chasing the Dream Foundation scholarship funds at UW-Milwaukee, Alverno College and Milwaukee Area Technical College, and at the Greater Milwaukee Foundation, which support low-income youth in Milwaukee, ages 9-12. | Kohl’s recently donated $250,000 to support the extension of Kohl’s Thank You Thursdays, which provides free access to the Milwaukee Public Museum. | Spectrum recently donated $30,000 to Hispanic Federation, which will support SER Jobs for Progress programs in Milwaukee. | The Gardetto Family Community Dental Clinic, received a $7,500 grant from the Catholic Community Foundation. | Phoenix Investors donated $50,000 to Pathfinders Milwaukee, Inc. | AT&T and nonprofit Connected Nation are providing 500 free hotspots and free internet connectivity for the Hmong American Peace Academy in Milwaukee. | Rockwell Automation donated $20,000 to support the American Red Cross for relief efforts helping communities in southern states still recovering from the severe winter storm.
nonprofit
SPOTLIGHT
M I LWA U K E E A R T I S T R E S O U R C E NET WORK (MARN) 191 N. Broadway, Suite 2, Milwaukee (414) 485-0033 | marnarts.org Facebook: facebook.com/MilwaukeeArtists Instagram: @MilwaukeeArtistResourceNetwork | Twitter: @mkearts
Year founded: 2002 Mission statement: The Milwaukee
Artist Resource Network strengthens the capacities of our members including artists, other arts workers and arts participants engaging communities and markets within and beyond the Milwaukee region. Primary focus of your nonprofit organization: We’re dedicated to
providing artists from all social and economic backgrounds with the resources needed to cultivate a local, sustainable, art practice with the capacity to engage national and international markets. Number of employees at this location: Seven Key donors: Bader Philanthropies,
Greater Milwaukee Foundation - Mary Nohl, Herb Kohl Philanthropies, We Energies Foundation, Milwaukee Arts Board/Wisconsin Arts Board, Milwaukee Cares for Arts and Culture Relief Grant Recipient, Ken Krei, Nirmal Raja Executive leadership: Mal Montoya,
president and CEO
Board of directors: Mal Montoya;
Pamela Anderson, board chair; Robert Zondog, vice chair; Ron Bote, treasurer; Margaret Wittig, secretary; Lynne Dixon-Speller; Nine Ghanbarzadeh, and Michael Havice. What roles are you looking to fill? MARN highly encourages our
community members who identify as BIPOC, LGBTQ+, women, individuals with disabilities, working class, immigrants, and/or veterans, to join us in leadership and advisory roles. Ways the business community can help your nonprofit: One-time
donations, recurring sponsorships, and Legacy Giving are all customizable options to support our programs and initiatives. MARN is happy to offer a few different membership levels including Friends of MARN, Creatives and Creative Business. Key fundraising events: With the
completion of the new MARN ART + CULTURE HUB, located in the Historic Third Ward, MARN will look to host a series of COVID compliant events to draw attention to our growing capacity. biztimes.com / 37
BizConnections VOLUME 27, NUMBER 1 | APR 12, 2021
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 COMMUNITY ENGAGEMENT / OWNER Kate Meyer kate.meyer@biztimes.com
EDITORIAL EDITOR Andrew Weiland andrew.weiland@biztimes.com ASSOCIATE EDITOR Lauren Anderson lauren.anderson@biztimes.com ASSOCIATE EDITOR Arthur Thomas arthur.thomas@biztimes.com REPORTER Brandon Anderegg brandon.anderegg@biztimes.com
Construction of Uptown Theater This March 1927 Brown and Rehbaum photograph shows the Uptown Theater at 2323 N. 49th St. in Milwaukee during construction. The steel framing of the roof is almost finished and the brick exterior is partially constructed. The theater was closed in 1980, and the building was eventually demolished in 2001 to make way for a new Milwaukee Police Department district headquarters building. — Photo courtesy of Milwaukee Public Library/Historic Photo Collection
COMMENTARY
Brookfield mayor ‘very frustrated’ with Legislature PREVIOUSLY, I wrote about how the Republican-controlled state Legislature has reduced local control in Wisconsin, giving local government officials less power to make decisions and set policies for their communities. My commentary focused on how this was affecting Milwaukee. Republicans won’t allow local officials to hold a referendum to increase their sales tax to raise revenue, Act 10 has provided tremendous savings for local governments but it doesn’t apply to police and fire unions (which could provide more savings for local government), Republicans don’t want local officials to cut their police budgets and residency rules have been banned. All of those issues affect Milwaukee’s fiscal condition and are decisions that should be made locally, not by state government. However, it’s not just liberals in Milwaukee 38 / BizTimes Milwaukee APRIL 12, 2021
County concerned about this. I received an email from Brookfield Mayor Steve Ponto. “I just read your commentary on restoring local control and want to say that I agree with every point you raised,” he said. “I am a Republican but am very frustrated with the state Legislature.” Republicans controlling state government have reduced shared revenue with local communities, which they justified by providing cost saving tools via Act 10, while at the same time local communities in Wisconsin are limited in what they can do to increase revenue. They have to rely on property taxes and fees, and there’s a limit to how much they are allowed to increase property taxes. One of the few ways local communities can increase revenue is if development occurs, which grows their tax base. Without new development, it’s tough. “There should be a floor to allow levy limit increases when municipalities experience little net new construction,” Ponto said. “There was such a floor when (property tax) levy limits were first introduced in 2006. That floor ranged from 2% to 3.86%, but the floor was eliminated in 2011. …Wisconsin municipalities should have more potential sources of revenue so they don’t have to rely so heavily on the property
REPORTER Maredithe Meyer maredithe.meyer@biztimes.com
DIRECTOR OF SALES Linda Crawford linda.crawford@biztimes.com CONTENT SOLUTIONS MANAGER Maggie Pinnt maggie.pinnt@biztimes.com ACCOUNT EXECUTIVE Paddy Kieckhefer paddy.kieckhefer@biztimes.com ACCOUNT EXECUTIVE Christie Ubl christie.ubl@biztimes.com ACCOUNT EXECUTIVE Dylan Dobson dylan.dobson@biztimes.com SALES ADMIN Gracie Schneble gracie.schneble@biztimes.com
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PRODUCTION & DESIGN
REPORTER Alex Zank alex.zank@biztimes.com
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Independent & Locally Owned — Founded 1995 —
tax and state aids.” Two years ago, a coalition that included the Metropolitan Milwaukee Association of Commerce and the Greater Milwaukee Committee backed an increase in the Milwaukee County sales tax to reduce property taxes and fund local government. Leaders from each of the county’s municipalities backed the initiative. Gov. Tony Evers’ wants to allow local communities to increase their sales tax, if approved by voters, but the idea was quickly rejected by Republicans in the Legislature. “The governor’s proposal to allow larger municipalities to have a local option sales tax if it is approved by a referendum is a good step,” Ponto said. “The local option sales tax could be used, in part, to reduce property taxes.” Clearly, Republicans in the Legislature aren’t going to listen to Milwaukee officials, but maybe they’ll listen to the mayor of Brookfield. n
ANDREW WEILAND EDITOR
P / 414-336-7120 E / andrew.weiland@biztimes.com T / @AndrewWeiland
CONTRIBUTED
5 MINUTES WITH…
SCOTT POWDER President, Advocate Aurora Enterprises
ADVOCATE AURORA HEALTH recently announced the launch of its new investment arm, Advocate Aurora Enterprises, which is focused on backing businesses related to aging independently, parenthood and personal performance. The Milwaukee- and Downers Grove, Illinois-based health system’s new subsidiary made its first investment in late March in Foodsmart, leading a $25 million Series C funding round for the San Francisco-based telenutrition company. Foodsmart connects app users with dieticians via telemedicine technology, offers a platform for online grocery shopping, and provides “foodscripts” to help manage chronic health conditions. Earlier this month, Advocate Aurora Enterprises announced it would acquire Maryland-based in-home care and wellness provider Senior Helpers. Scott Powder, president of Advocate Aurora Enterprises, discussed its strategy in a recent interview with BizTimes Milwaukee associate editor Lauren Anderson. NATIONAL STRATEGY “We don’t have a geographic focus; we have a national ambition and strategy. The reality is ... a lot of the kinds of companies that we’re looking at that are really pioneering – and Foodsmart being an example of this – consumer health and wellness are digitally native or digitally-based, which immediately makes them accessible via technology really across the country. That doesn’t mean we won’t specifically look
for companies that have what I’d call synergistic opportunities in our Wisconsin/Illinois footprint, but we’re not necessarily targeting that as our only focus. It’s very much, what are companies that can impact consumer health and wellness nationally?” IDEAL PARTNERS “While we are open to just about everything, the reality is that I don’t see us having a huge focus on really, really early seed and pre-revenue startups. That’s what we love about Foodsmart. It’s actually sort of the perfect microcosm of what we’re looking for. … It’s an 8-year-old company, it’s cash-flow positive, yet still has a lot of upward growth potential, which our investment will help propel. It’s kind of that perfect stage. It’s third, fourth or fifth round of financing, we can help propel it. It’s not a complete shot in the dark, they have customers, but still tons of growth potential.” HOW WILL FOODSMART HELP ADVOCATE AURORA PATIENTS? “One of the reasons we really liked what Foodsmart is doing is we have a huge commitment to diversity, equity and inclusion and serving underserved communities. Our community health team and our population health team, they loved what Foodsmart is able to do for people who are grappling with food insecurity in the communities we serve today. The fact that they can integrate food stamps into the application for offsetting the cost of food, the fact that they actually do price shopping (and compare costs), and then of course that you can arrange for food delivery. And often people in communities have a food desert, where they have to travel to outside communities to get access to fresh and nutritious food, now we can bring (groceries) to them through delivery services.” n biztimes.com / 39
NOTABLES 2021 Keep up with BizTimes’ 2021 roundup of the leaders making a difference throughout southeast Wisconsin. At companies across southeast Wisconsin, notable executives are running businesses, navigating company restructurings, serving on boards, running HR and marketing departments, and investing in growth throughout the region. These notable individuals also mentor, teach and volunteer in their communities. The leaders profiled in these categories are nominated by their peers at work and in the community.
NOTABLE WOMEN
ON CORPORATE BOARDS This list recognizes the accomplished women serving on corporate boards or as nonemployee senior advisors to public or private companies with a connection to southeastern Wisconsin. Nomination deadline: May 7, 2021 | Issue date: June 21, 2021
Nominations open in 2021: Notable Women in Education The women profiled here are dedicated to creating and expanding learning opportunities for Wisconsinites of all ages, at all levels and in a host of fields. Their leadership, devotion and example are helping to shape a better future for our region and its people. Nomination deadline: June 4, 2021 | Issue date: July 19, 2021 Notable Marketing Executives Profiling accomplished women steering the marketing functions of their companies and nonprofits, while serving as leaders and role models in their workplaces and community. Nomination deadline: July 2, 2021 | Issue date: August 16, 2021 Notable Women in Insurance The executives on this list are shaping their own organizations as well as the path forward for other women in the industry. Nomination deadline: September 10, 2021 | Issue date: October 25, 2021 Notable Commercial Real Estate Leaders The brokers, directors, investors, developers and finance professionals on this list are among those shaping highprofile commercial real estate in Chicago. Many have brokered deals for and developed the city’s most recognizable properties. Others are helping to steer industry groups that are fostering the next generation of leadership in commercial real estate. Nomination deadline: September 24, 2021 | Issue date: November 8, 2021 Notable Food & Beverage Executives The executives on this list are shaping their own organizations as well as the path forward for others in the food and beverage manufacturing industry, while mentoring the next wave of professionals and finding ways to give back to their communities. Nomination deadline: October 29, 2021 | Issue date: December 13, 2021
To view this year’s winners and nominate, visit biztimes.com/notable
