July 24, 2017

MID-YEAR

ECO N O M IC

F O RECAST

What to expect for the rest of the year in your industry

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BizTimes Milwaukee (ISSN 1095-936X & USPS # 017813) Volume 23, Number 09, July 24 – August 6, 2017. BizTimes Milwaukee is published bi-weekly, except two consecutive weeks in December (the second and third weeks of December) by BizTimes Media LLC at 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120, USA. Basic annual subscription rate is $42. Single copy price is $3.25. Back issues are $5 each. Periodicals postage paid at Milwaukee, WI and additional mailing offices. POSTMASTER: Send all UAA to CFS. NON-POSTAL AND MILITARY FACILITIES: Send address corrections to BizTimes Milwaukee, 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120. Entire contents copyright 2017 by BizTimes Media LLC. All rights reserved.

Contents

4 Leading Edge 4 NOW

BY THE NUMBERS 5 BIZLUNCH 6

7 8

MY FAVORITE TECH COFFEE BREAK BEHIND THE SCENES QUOTE/UNQUOTE

9 BIZ POLL WHO’S ON THE BOARD 10 REV UP

12 BizNews 12 CRAFT BEER BOOM CONTINUES 14 MY TAKE

16 Real Estate 34 Strategies

COVER STORY

18

34 ALETA NORRIS

Help wanted

35 DAN STEININGER

Mid-year economic forecast

36 GEORGE SATULA

38 Biz Connections 38 NONPROFIT

Special Report

39 PERSONNEL FILE

18 Mid-year economic forecast In addition to the cover story, coverage includes a Q&A with economics professor Scott Adams of the University of Wisconsin-Milwaukee, the MMAC forecast for the third quarter, a report on local stock performance, analyses of the hot residential and commercial real estate markets, information on potential tax implications in M&A, an update on manufacturing workforce issues, and a look at employers’ health care cost dilemma.

40 GLANCE AT YESTERYEAR COMMENTARY 41 AROUND TOWN 42 THE LAST WORD

C R E AT E D TO B E

W I SCO N S I N ’S BA N K F O R B U S I N E SS™ As a company built for this area, we see things differently. We don’t worry about what other companies are doing in other places, because we know firsthand what our area and businesses need to succeed. This is because we’re a proud local business too. It makes all the difference when a bank understands your community and supports your business goals. That’s why we’re honored to call ourselves Wisconsin’s Bank.

4 1 4 - 2 7 3 - 3 5 0 7 | w w w. t o w n b a n k . u s

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BIZTIMES MEDIA – Like us

Earl Buford, Employ Milwaukee chief executive officer, discusses his organization's leadership of the new Midwest workforce consortium.

Employ Milwaukee to lead Midwest workforce group

By Arthur Thomas, staff writer

Employ Milwaukee will lead a new group of Midwestern workforce investment boards that aims to address workforce issues in urban areas in 12 different cities through collaboration and sharing best practices.

The Midwest Urban Strategies Consortium includes workforce boards from Chicago; Cincinnati; Cleveland; Columbus, Ohio; De-

troit; Gary, Indiana; Indianapolis; Kansas City, Missouri; Minneapolis; St. Louis; and Wichita.

“Milwaukee is leading this charge,” said Earl Buford, president and chief executive officer of Employ Milwaukee. “Think about it: We’re working with Chicago and Detroit and they’ve asked us to lead this charge; that’s awesome.”

The consortium has already

BY THE NUMBERS Baird Capital recently closed on a

$ 3 10

MILLION

fund to invest in lower middle market firms in the technology, health care and industrial solutions sectors.

4 / BizTimes Milwaukee JULY 24, 2017

been working together over the past several years, using its size to help secure $13 million in funding.

The grants have included training for middle- to high-skill jobs, an American Apprenticeship grant and a TechHire grant.

“We really do face issues where employers are frustrated because they can’t find workers and workers are frustrated because they can’t find jobs,” said Milwaukee Mayor Tom Barrett. “Working with our workforce investment boards, we can really provide that bridge.”

The announcement further formalizes the consortium’s work.

Buford said the initial goals for the coming year would be to: create regional, sector-based advisory panels with business leaders from through the region; continue to take advantage of the scope and size of the organization to share information and secure funding; leverage the expertise of workforce leaders in the region; and extend the group’s capacity by engaging national and regional community groups like the Boys & Girls Clubs or the United Way. Buford said the group is still working to define exactly what success will look like for the consortium.

“We’re going to look at how we measure ourselves in effectiveness,” he said. “Is it solving unemployment? Not sure. Is it increasing apprenticeship in this

country? That’s a goal. So right now we’re not actually quite sure yet, but that’s why it’s so important that we collectively came together as an effort to start defining what that looks like.”

Employ Milwaukee will be leading the administration of the consortium, an effort supported by a $100,000 grant from JPMorgan Chase & Co. announced this month. Bader Philanthropies Inc. is also supporting the build-up of Employ Milwaukee’s capacity to administer and fundraise for the consortium.

Even with the additional support, it might be reasonable to be concerned that collaborating across the region could lead Employ Milwaukee to take its focus off work in the city and county. Buford said that won’t be an issue and the area will have access to resources it may not have otherwise received, along with the opportunity to bring back ideas from other communities.

“The workforce needs throughout the Midwest are not confined to certain geographic areas,” Barrett said. “I think all of us share the vision of bringing back more family-supporting jobs to Midwestern cities and this is an opportunity for us to do that together.”

The mayor added that Employ Milwaukee’s leadership of the consortium shows “not only is this workforce investment board good—it is great.” n

1

Lunch

Biz

STELLA VAN BUREN

A D D R E S S: 550 N. Van Buren St., Milwaukee WEBSITE: stellavanburen.com CUISINE: Modern Italian steakhouse C H E F: Justin Winkler M O O D: Upscale casual PRICING: Lunch entrees, $11-27; Dinner entrees, $14-49; Cocktails, $10-12 The cuisine at new downtown restaurant Stella Van Buren, developed in part by executive chef Justin Winkler, is centered around classic Italian dishes like chicken parmesan and fresh pasta, as well as steakhouse favorites like bone-in filets with a la carte sides.

“The thing both those items and both those concepts have in common is they’re both comfortable,” said Denise Ploof, general manager. “Simple food prepared extremely well is the mantra.”

The dining room seats 180, and a private dining room can be reserved for meetings of 10 to 30. A complimentary valet is on hand for diners.

The restaurant is located in the newly built Westin Hotel and connects to the U.S. Bank Center via skybridge. It attracts much of its lunchtime and cocktail hour crowd from downtown businesses, Ploof said. 

1 2 3

2 3 The Prime Burger is a popular lunch item, made with prime grade Midwestern beef, fontina cheese, tomato jam, balsamic onion and garlic aioli, served on a toasted brioche bun with a side of parmesan fingerling potatoes. The burger is seasoned with just salt and pepper. “We let the meat talk for itself,” Winkler said.

One of the most ordered menu items is the Burrata Cheese Bruschetta, one of six “fork and knife” bruschettas Stella serves. It is made with fresh heirloom tomatoes, white balsamic, basil, tomato jam and a generous helping of burrata cheese on toasted ciabatta. “It’s such a great summer flavor,” Ploof said.

With sleek modern décor in creams and dark browns, large wine racks with clear viewing panes, and a separate low key dining area by the well-stocked bar, Stella Van Buren aims for an approachable, upscale casual atmosphere. Floor-to-ceiling picture windows display a bird’s eye view of downtown from the third floor of the Westin on—you guessed it—North Van Buren Street. biztimes.com / 5

Leading Edge

@BIZTIMESMEDIA – Real-time news

COFFEE BREAK

Julie Schuller

President and chief executive officer Sixteenth Street Community Health Centers 1032 S. Cesar E. Chavez Drive, Milwaukee | sschc.org INDUSTRY: Health care | EMPLOYEES: 380

LESLIE DIXON

Chief human resources officer, Robert W. Baird & Co. Inc.

Dixon oversees human resources, facilities, the travel/corporate events department, marketing and communications, and assists with the administration of the Baird Foundation. With a packed schedule, she has discovered a few tools and apps to help her keep track of her busy life.

Here are a few of her favorites.

APPLE WATCH “I bought this about six months ago and I was personally interested because of how busy I am and how important it is that I’m on time. It syncs with your phone and doubles as a (fitness tracker). I can also set reminders so it will vibrate if I need to be somewhere in 5 minutes so rather than looking down at my iPhone, which can be rude, I can just tilt my watch, or feel a vibration and it is a little bit less conspicuous.”

ADT PULSE APP Dixon’s house was recently broken into, so she and her husband had an ADT security system installed and put cameras around their home. She also has an app on her phone, allowing her to turn the system on and off and monitor her home. “I can look right at the cameras, anytime. I don’t know if it will help with future break-ins, but it has helped with my peace of mind.”

NEWS APPS “I don’t have a paper delivered anymore, but I like to keep up with what is going on with all of the Milwaukee news, so I have all of those apps, plus CNN and Fox News. I would say I started using news apps exclusively about two years ago.”

FLIXSTER “I love movies, so I use Flixster a lot. It lets you set a distance from where you are and tells you how many theaters are nearby, the movies that are showing and you can even buy tickets.” n 6 / BizTimes Milwaukee JULY 24, 2017

age 12, she had decided to become a doctor.

• While in medical school at Northwestern University, she completed several internships in Chicago related to urban health, including a summer working in the Cabrini–Green housing development. “It really deepened my desire to give back and, particularly as a doctor in health care, to go to places that may not otherwise get health care.”

• Born and raised in the Milwaukee area, Schuller attended Saint Jude the Apostle School and Pius XI High School. She went on

to marry her high school sweetheart.

• Schuller is passionate about serving a diverse patient population.

• She sees nonprofit leadership as both a science and an art. “Science is methodical and predictable. Passion and mission aren’t, so it’s harder because it’s not necessarily predictable.”

• She’s a big fan of the My-

ers-Briggs Type Indicator. “It’s helped me tremendously to understand people and to allow staff to build on their strengths.”

• Amid uncertainty in the health care sector, Schuller said it’s important to stay calm. “There’s

never been a time of this much uncertainty in health care. It’s

very challenging to stay calm about it, but you have to. And now, more than ever, you have to stay focused on your mission and yet stay really nimble.” n

LILA ARYAN PHOTOGRAPHY

MY FAVORITE TECH

• Early on as a child, Schuller knew she wanted to help people. By

1

KAT SCHLEICHER PHOTOGRAPHY

BEHIND THE SCENES Doing laundry for The Marcus Corp.

By Corrinne Hess, staff writer

T

he Marcus Corp. is synonymous with iconic hotels and movie theaters. But the Milwaukee-based company has another arm of its business the public never sees, but often feels.

Since 1995, Wisconsin Hospitality Linen Service has laundered linens for the hotel group and other hotel and restaurant operators, processing more than 10 million pounds of linen annually, including sheets, towels and restaurant linens.

In December 2016, WHLS completed a $2.3 million expansion, enabling it to double its current capacity over the next five years.

Wisconsin Hospitality Linen Service has operated out of a 32,000-square-foot facility at 130 W. Edgerton Ave. in Milwaukee since 2001. n

1

Karina Perez folds a small towel in the custom folding area.

2

A “pancake� of sheets leaves the washer on its way to the drier.

2 3

4 3

Clean linens wait to be loaded onto a truck and delivered back to customers. Turnaround time is a strict 24 hours.

4

Jamie Morales, Brenda Lopez and Martha Acosta load sheets into a finishing line, which irons and folds them.

5 5

Incoming laundry travels on the overhead rail system to the washer at Wisconsin Hospitality Linen Service. WHLS serves more than 17 properties across the Midwest. biztimes.com / 7

Leading Edge

BIZTIMES MEDIA – Connect

“ QUOTE

unQUOTE

J U S T I N M O RTA R A

”

PR E S I D EN T, M O R TA R A I N S T R U M EN T I N C .

Milwaukee-based Mortara Instrument Inc., a manufacturer of medical devices for diagnostic cardiology and patient monitoring, was acquired earlier this year by Chicago-based Hill-Rom Holdings Inc. for $330 million.

Former chief executive officer Justin Mortara is now president of the company, which was founded by his father, David. Mortara spoke recently at Scale Up Milwaukee’s annual Celebration of Growth event. n

“It’s always about innovation. That’s been our theme. That’s how we’ve driven our growth – taking profits from one venture, pushing them back into the business and investing in new product development, new technologies and how can we serve our customers in ways they have previously not been served and disrupt the established competition.”

“For those of you in the technology space, don’t start with the technology. If you start with understanding the need and have a deep understanding of your competition and their ability to respond and react, then apply the technology. The technology is then your friend.”

H

Y

“I was raised in Milwaukee but like some people, I needed to leave to figure out how good I had it…I came back to a city that had fundamentally changed. Graduating in the late ’80s and coming back in the late ’90s, seeing some really interesting things that had happened, some new energy in the city, some new developments. And then getting really excited about what more we could do.”

8 / BizTimes Milwaukee JULY 24, 2017

ER I C H S C

HROE

D

H ER P

OTO

GR

AP

“Know your competition. Know how quickly they can respond to anything you might do.

How many barriers can you create for that competitor who might follow you?”

“People matter…but the right people really matter…Somebody could be the smartest guy in the room or the smartest lady in the room, have all sorts of experience, but if they aren’t aligned with how we like to run, how we like to race ahead, how we like to drive, how we like to innovate, then it doesn’t fit.”

BIZ POLL

Who’s on the Board?

A recent survey of BizTimes.com readers.

How should the state address its transportation funding shortfall?

Tolls: 31%

Higher gas tax: 27%

Less spending, fewer projects: 18% Tax on semitrailer trucks: 17% Other: 6%

GENERAC POWER SYSTEMS INC. • Todd Adams, lead director of Generac; president and chief executive officer of Rexnord Corp.

• John Bowlin, former president and CEO of Miller Brewing Co. • Robert Dixon, former senior vice president and general manager of Air Products and Chemicals Inc. • David Ramon, former president and CEO of USA.NET Inc. • Aaron Jagdfeld, CEO of Generac • William “BJ” Jenkins, president and CEO of Barracuda

More borrowing: 1%

Jagdfeld

Networks • Bennett Morgan, former president and chief operating officer of Polaris Industries Inc. • Andrew Lampereur, executive vice president and chief financial officer of Actuant Corp.

• Kathryn Roedel, former executive vice president and chief services and fulfillment officer at Select Comfort Corp.

• Dominick Zarcone, executive vice president and CFO for LKQ Corp.

Outreach Community Health Centers, Inc. PHONE: (414) 906-5306 WEB: ochc-milw.org To ensure that men, women and children in the Greater Milwaukee Area receive the quality health care, behavioral health, housing and supportive services needed to live at the highest possible levels of self-sufficiency. Outreach Community Health Centers, Inc. will work to achieve this mission through advocacy, outreach, prevention, public awareness, collaborative relationships with other service providers and contracting for or providing a quality, cost-effective continuum of care.

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We supthrough advocacy, outreach, prevention, public awareness, collaborative relationships with other port burn survivors of all ages andfor sponsor the Summer Camp for Burn Injured Youth. service providers and contracting or providing a quality, cost-effective continuum of care.

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ACCESS HEALTHNET LLC

LEADERSHIP: Eric Haberichter, CEO. He also co-founded Mequon-based SmartChoice MRI.

LILA ARYAN PHOTOGRAPHY

REV UP

A D D R E S S: 105 W. Michigan St., Milwaukee WEBSITE: accesshealthnet.com W H AT I T D O E S: Bundled health care pricing F O U N D E D: 2014 N U M B E R O F E M P L OY E E S: 40, including 18 hired this year N E X T G O A L S: Add at least 10 more employees by year-end; bring on more distributors.

FUNDING: Closed on a $3.5 million series A round on June 19.

Eric Haberichter

Access HealthNet tackles health care pricing

By Molly Dill, staff writer

10 / BizTimes Milwaukee JULY 24, 2017

Midwestern rustbelt states are Access HealthNet’s bread and butter.

The startup coordinates between payers and providers to bundle health care services and offer each for a predetermined flat fee. It’s a rapidly growing solution in an age of escalating health care costs and complex reimbursement structures.

Since competition is low, health care services tend to be more expensive in the middle of the country. But the uninsured population is smaller, so providers are able to bring down their prices, said Eric Haberichter, the company’s co-founder and chief executive officer.

“A lot of folks have been talking about outcomes-based payment,” he said, but in managing a chronic disease like diabetes, for example, so much is out of the doctor’s control.

“In our case, the provider names their own price. We tell them what has to be in the bundle,” Haberichter said.

Access HealthNet recently moved into its fourth office location since it was founded in 2014. The company has hired 18 employees in 2017, with plans to add at least 10 more by the end of the year.

It has signed on more than 4,000 health care provider locations and priced out more than 1,200 health care bundles. A bundle includes all the services in one health care event, such as a knee surgery.

Now, the company has zeroed in on distrib-

utors, recruiting brokers and third-party plan administrators to more effectively bring on self-funded employers. It has 13 distributors on board, mostly in the Milwaukee area.

And it’s got the capital to fund its expansion: Access HealthNet closed on a $3.5 million series A round on June 19. The company had no investors for the first two-and-a-half years in business, subsisting “painfully” on $300,000 in seed money from the founding members, Haberichter, Leslie Kolowith and James Kolb.

Haberichter is familiar with flat-fee medical services—he co-founded Mequon-based SmartChoice MRI, which offers outpatient MRIs for $600 or less.

“It became apparent that there was a need for this and self-funded employers wanted to have this direct contract,” he said.

And for the patient, health care reimbursements are confusing and costs are unpredictable.

Access HealthNet allows employers to provide a financial incentive to the employee to choose the lowest priced quality provider for a particular service, and offers transparency in pricing before the procedure for both the employer and employee. The provider is able to offer a lower price because it is guaranteed a set payment.

“Simplicity is what really drives consumers,” Haberichter said. “If it was any other business, I think we would call (the traditional reimbursement process) criminal.” n

SPONSORED CONTENT

Supply chain management is crucial to business success How healthy is yours?

S

upply chain management may not be the most talked-about aspect of your business. But it is absolutely crucial, no matter what the prevailing business climate.

Supply chain management is the strategic coordination of functions that move materials from the point of origin to the point of consumption. According to the Council of Supply Chain Management Professionals, the cost of U.S. business logistics is over one trillion dollars a year. Any system with that level of cost is likely to have hidden waste when not appropriately managed.

“If every element of the supply chain is managed effectively, it can result in improved inventory management, cash flow, operating expense control and overall profitability,” said Dr. Joseph Weitzer, Dean of the Center for Business Performance Solutions at Waukesha County Technical College.

“Yet, the supply chain is rarely at the forefront when it comes to business decisions, and for many organizations, almost never assessed unless failure can be directly attributed to a link in the supply chain.”

The financial health of the U.S. economy and your

business depend on networks of smoothly running supply chains. These networks are interlinked and interdependent. The network is comprised of vendors of raw materials, producers who convert material into products, warehouses that store, distribution centers that deliver to retailers and retailers who bring the product to the ultimate user. Understanding the dynamics and links within the system of the supply chain is essential to optimize value.

You and your supply chain Supply chain management is a strategic and critical business function. It requires strong leadership, a foundation of knowledge and competency and a dedication to continuous improvement. All departments within your organization should have a common understanding of the supply chain, and ensure that those empowered to manage your supply chain are appropriately trained and empowered.

Start with a solid, well-rounded education program.

Next, consider benchmarking the performance of your system against competitors. Assess the status and stability of your supply chain, looking at not just price, but also at value. This might include just-intime responsiveness, quality assurance of supplies, stability or predictability of price and ease of main

Web-based Supply Chain

taining data (i.e., supporting ERP systems). Keep in mind that the weakest link in your supply chain will ultimately be the factor limiting its performance.

“Part of a good business strategy is to monitor and maintain your supply chain,” said Weitzer. “If even one of your material suppliers has significantly downsized or reduced inventories below ‘reasonable response levels,’ your ability to ramp up production or meet your customer’s demand in a timely manner may be significantly hampered.” And, in today’s fast-paced business environment, your failure to meet customer expectations is another’s golden opportunity.

WCTC offers a series of courses in supply chain management, including Basics of Supply Chain Management, Master Planning of Resources, Detailed Scheduling and Control of Operations, all leading to Certification in Production and Inventory Management. Such training can give an organization the competitive edge needed to both meet current customer demand and scale quickly.

“It is never too late to examine the health of your supply chain. When managed effectively, your supply chain will contribute to your bottom line,” said Weitzer.

Information Flows

Goods Flow

Financial Market Plan Wholesale Distributers

Banks

Suppliers

Retailers

Manufacturers Supplier Oriented Exchangee

Logistic Exchangee

Customer Oriented Exchangee

Customers

Virtual Manufacturers Contract Manufacturers

Logistic Providers

For more information on supply chain management, logistics and related courses offered by Waukesha County Technical College, go to www.wctc.edu/cbps

Returned Items

BizNews

Craft beer boom continues amid increasing competition

By Arthur Thomas, staff writer IF YOU LOST TRACK of which new brewery, brewpub or taproom was opening when and where in the Milwaukee area over the past few years, you’re not alone.

For a long time, southeastern Wisconsin’s craft brewing scene was dominated by the likes of Lakefront Brewery Inc., Milwaukee Brewing Co., Sprecher Brewing Co. Inc. and other state brewers like New Glarus Brewing Co. The past few years, though, have seen the emergence of new breweries like Waukesha-based Raised Grain Brewing Co. LLC, which spent $2.7 million in June on a new facility to increase production; Good City Brewing LLC on Milwaukee’s East Side; Third Space Brewing LLC and City Lights Brewing Co. in the Menomonee Valley; and MobCraft Beer Inc., which relocated from Madison to Walker’s Point.

While those five have drawn plenty of attention of late, their combined production over the first four months of the year doesn’t equal a single month of Lakefront’s sales in the state, according to Wisconsin Department 12 / BizTimes Milwaukee JULY 24, 2017

of Revenue data.

There are also smaller operations, including Westallion Brewing Co. LLC, which opened this spring in West Allis; Brookfield-based Biloba Brewing LLC, which moved into a larger space last year; SwitchGear Brewing Co. LLC in Elkhart Lake; and baseball-themed Broken Bat Brewing Co. LLC in the Third Ward, to name a few.

Even Mequon-based pet food maker Fromm Family Foods LLC proposed a brewery with its office expansion. And MillerCoors LLC is investing $50 million in its Leinenkugel’s brewery just north of downtown Milwaukee.

The Milwaukee area hit what felt like peak craft beer in 2016, a year when national beer production was flat after years of double-digit growth. The drop was largely driven by a decline in production by larger regional brewers, while microbreweries and brewpubs continued to grow, according to the Brewers Association.

“The main driver right now within the overall craft beer space is local, so in that sense Milwaukee is behind as far as number of local

options out there,” said David Dupee, a co-founder of Good City.

Department of Revenue data backs up the emphasis on local, as production by Wisconsin breweries for Wisconsin consumption is up 10.3 percent in the first four months of the year, while beer shipped in is up 5.1 percent.

Dupee pointed to cities like Portland, Oregon; Grand Rapids, Michigan; and Asheville, North Carolina as similar markets that Milwaukee trails despite a long brewing heritage.

“There’s no reason for that, unless Milwaukee is an anomaly and we are not a craft beer market, which I don’t believe is the case … I think it’s more of an entrepreneurship issue,” he said, pointing to oft-cited Ewing Marion Kauffman Foundation statistics ranking Wisconsin last for startups. “I think breweries are just a subset of that overall trend.”

Asheville claims the most breweries per capita of any city in the country, but as a state, Wisconsin is actually slightly ahead of North Carolina with 3.3 breweries per 100,000 residents, compared to 2.8 for the Tar Heel State, according to Brewers Association data. Michigan has 3.1 and Oregon has 8.1.

Good City has found enough success in its first year for Dupee and his co-owners to expand.

The brewery took over the former

Crank Daddy’s Bicycle Works space next to its North Farwell Avenue taproom for a private event space, additional room for production and a rooftop patio.

While the extra space opens up more room for Good City’s taproom, it also allows the brewery to more fully take advantage of the capacity of its brewhouse, an important factor in the expansion.

Good City signed a distribution deal with Beechwood Sales & Service this spring and is looking to sell its product statewide at some point.

Those larger ambitions highlight an important distinction in Milwaukee’s craft beer boom.

There are those who want to distribute their product more widely and those who are content to stay hyperlocal.

“I think a lot of the new ones are more brewpub,” Dupee said.

“If that’s your ambition, every neighborhood can support that.”

Breweries seeking broader distribution face a lot more competition, not only from their fellow new entrants, but also from established craft brewers, and even regional and national competitors.

“If that’s your aspiration, that’s tougher; I still think there’s room, but that’s a lot smaller window,” Dupee said.

Grant Pauly, founder and brewmaster at Sheboygan-based

Three Sheeps Brewing Co. LLC, agreed, noting he would be a lot more scared to open a production brewery now than when he started in 2012. In particular, he said the quality and consistency of the product has become increasingly important.

“That six pack of beer had better taste like that same six pack every single time,” he said.

Craft breweries also have to manage their growth and production to avoid getting overextended and not being able to fill empty shelf space.

“It isn’t going to stay empty waiting for us for very long,” he said.

Pauly expanded Three Sheeps into a larger production space last year, allowing the company to better take advantage of potential growth opportunities.

“We had to stop growth for a year,” he said. “We are able to produce a lot more beer, so now we’re back out there pushing a little harder.” n

David Dupee discusses the craft beer scene at an event previewing Good City’s new rooftop patio before construction was finished.

biztimes.com / 13

BizNews

MY TA K E

Thank You

Should Wisconsin tax semi trucks to raise road funds?

Republicans in the Legislature and Gov. Scott Walker are trying to solve the state’s $1 billion transportation fund deficit.

One proposal was a 2.85 cents-per-mile tax on semitrailer trucks. But several business groups criticized that idea, as did five Republican state senators.

Wisconsin Motor Carriers Association president Neal Kedzie opposes the semi truck tax, and Assembly Speaker Robin Vos and other GOP Assembly leaders issued a response to critics of the idea. n

attendees and sponsors On July 12, a distinguished group of family business owners and leader of family-owned and closely held businesses in southeastern Wisconsin gathered at Potawatomi Hotel & Casino for the third annual Family & Closely Held Business Summit, presented by BizTimes Media.

The morning event kicked-off with a keynote from Tom Deans, author of his best-selling book, “Willing Wisdom: 7 Questions Successful Families Ask.” A family business presentation featuring Ken and Jack Riesch followed.

They shared their insights and strategies on remaining an independent, locally-owned agency. Attendees were then able to learn more with four roundtable discussions on family and closely held business topics.

ROBIN VOS NEAL KEDZIE Assembly Speaker (R-Rochester)

President Wisconsin Motor Carriers Association

YES NO TA XING TRUCKS “The heavy truck fee could increase transportation revenue by $138 million annually. Four states across the nation have benefitted from a minimal (tax) increase on heavy trucks. This proposal is only one potential piece of a larger budget plan that asks all users of the roads to contribute higher user fees.”

To view videos of the event, please visit biztimes.com/family

Sponsors:

“While it may be very easy to target one type of vehicle in one specific industry, what lawmakers who support this plan fail to understand is the trucking industry is currently the single largest payer into the transportation fund. Thus, demanding trucking companies pay even more to fund transportation projects is not only short-sighted, it will harm consumers and the delivery of goods across the state.”

THE NEED “I trust we can all agree that our state’s infrastructure is in desperate need of repair. Without new revenue, construction will halt and costs will increase as projects are delayed.”

“Wisconsin trucking companies are committed to working with the Legislature and interested parties in finding equitable and long-term solutions to funding our highway infrastructure.”

OTHER OPTIONS

Partners:

14 / BizTimes Milwaukee JULY 24, 2017

“Earlier this year, we put forth a proposal to meet Gov. Walker’s original criteria of raising revenues and providing a corresponding tax cut. That plan sought to find additional savings at DOT, cut the minimum markup on gas, increase sales tax on gas and also begin a path toward a flat income tax in our state.”

“The industry has expressed its willingness to accept a modest increase in the fuel tax which would be shared by all highway users, not just one category of user. In fact, the Wisconsin Motor Carriers Association has been on record for several years now in support of a 5 cent increase in the fuel tax.”

20

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Now accepting reservations!

BOYS & GIRLS CLUBS OF GREATER MILWAUKEE

MISSION

WHO’SWATCHING WATCHINGOUR OURKIDS KIDSAFTER AFTERSCHOOL? SCHOOL? WHO’S

2017 EDITION

The mission of Boys & Girls Clubs of Greater Milwaukee is to inspire and empower all young people, especially those who need us most, to realize their full potential as productive, responsible and caring citizens.

1558 N. 6th Street Milwaukee, WI 53212 (414) 267-8100

boysgirlsclubs.org facebook.com/bgcmilwaukee @bgcmilwaukee

750 $26,808,482 1887

TOTAL EMPLOYEES: ANNUAL REVENUE:

YEAR ESTABLISHED:

SERVICE AREA Boys & Girls Clubs of Greater Milwaukee has 44 locations in the area with more than 43,000 members and serves more than 5,000 kids every day.

FUNDING SOURCES

Publication Date: November 13, 2017 A SUPPLEMENT OF

 Contributions ..........................................................44%  Grants ........................................................................42%  United Way ..................................................................5%  Investment Distribution .........................................5%  Service & Rental Fees ............................................4%

EXECUTIVE LEADERSHIP

Vincent Lyles President & CEO

34

Susan Ela Board Chair

GOALS

FUNDRAISING/EVENTS

Our vision is to build the community’s social and economic fabric by ensuring the academic and career success of every child that walks through our doors. With the help of community partners, volunteers, generous donors and committed staff, Boys & Girls Clubs of Greater Milwaukee provides after-school and summer programming to more than 43,000 children and teens at 44 locations. Within the safety of the Clubs, children and teens receive academic support, free meals, characterbuilding programs and access to role models. Every child deserves a future of unlimited possibilities.

Boys & Girls Clubs of Greater Milwaukee hosts special events throughout the year to engage the public in our mission and raise funds to support our programming. Events include but aren’t limited to our Annual MVP Gala in May, Celebrating G.I.R.L.S in November, YP Prom, and Lumberjack Brunch at Camp Whitcomb/Mason. All events have ticket and sponsorship opportunities, for more information please visit our website.

VOLUNTEER OPPORTUNITIES

GIVING OPPORTUNITIES

The Clubs have a role for skilled and committed volunteers. Our needs are ongoing, and we are always looking to expand our volunteer roster. We offer one-time and recurring opportunities with projects ranging from Club beautification to literacy activities with Club youth. If you are interested in volunteering or creating a one-time opportunity for your company, please complete the Volunteer Inquiry Form on our website or contact our Volunteer Coordinator at (414) 267-8111.

Making a financial gift, attending a special event, volunteering and including the Clubs in estate plans are just a few of the ways individuals can help give Club members the resources they need to work toward productive futures. Your investment will create a ripple effect in the community as today’s young people become tomorrow’s leaders.

BOARD OF DIRECTORS

★ DENOTES EXECUTIVE LEADERSHIP

Christopher S. Abele

Jack A. Enea

Jerome M. Janzer

Richard R. Pieper, Sr.

John W. Splude

Barry K. Allen

Peter Feigin

Jeffrey A. Joerres

James R. Popp

Mary Ellen Stanek

Bevan K. Baker

Edward A. Flynn

Craig Jorgensen

Robert B. Pyles

Mara Swan

James T. Barry, III

William Fitzhugh Fox ★

Tracey Joubert

David F. Radtke

Alfonzo Thurman

David A. Baumgarten

Alexander P. Fraser

Sarah Wright Kimball

Kristine A. Rappé

Harris Turer

David L. Bechthold ★

John Galanis

Michael Lappin

Bethany M. Rodenhuis

John Utz

Thomas H. Bentley, III

Nan Gardetto

Steven L. Laughlin

Mark Sabljak

Gordon J. Weber

Linda Benfield

David Gay

William R. Bertha

Charles B. Groeschell

Thomas M. Bolger

Bronson J. Haase

Keith R. Mardak

Richard C. Schlesinger

Maureen A. McGinnity

Allan H. Selig

Daniel F. McKeithan, Jr.

John S. Shiely

Elizabeth Brenner

William C. Hansen

Robert L. Mikulay ★

Thelma A. Sias

Brian Cadwallader

Thomas J. Hauske, Jr.

Brian Morello ★

Patrick Sinks

Gregory Wesley Arthur W. Wigchers James B. Wigdale Madonna Williams Scott Wrobbel ★

Tonit Calaway

Jack Herbert

Cory L. Nettles

Daniel Sinykin

James L. Ziemer

Tina M. Chang

Renée Herzing

Keith D. Nosbusch

Guy W. Smith

Anne Zizzo

G. Spencer Coggs

Katherine Hust

Wayne C. Oldenburg

Judson Snyder

Diane Zore

Russell M. Darrow, Jr.

Charles V. James

Guy A. Osborn

Thomas L. Spero

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WEARE. ARE.Each Each day after school, thousands kids find safety WE day after school, thousands ofof kids find safety and inspiration their Boys Girls Club.

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Real Estate

@BIZTIMESMEDIA – Real-time news

The Pick ’n Save store on West State Street in Wauwatosa is being remodeled into a Metro Market.

What’s next for Pick ’n Save?

SINCE MAY, SIX PICK ’N SAVE stores have closed due to low sales, affecting 448 employees.

The shuttered stores, in New Berlin, Pewaukee, Kenosha, Sheboygan, Shawano and at Timmerman Plaza on West Silver Spring Drive in Milwaukee, are in addition

to the Clarke Square Pick ’n Save on Milwaukee’s south side and the Kimberly store that closed in 2016.

Those are in addition to the Pick ‘n Save stores that closed in Waukesha, Saukville, Milwaukee, West Allis and Racine in the two years prior to Cincinnati-based

The Kroger Co.’s December 2015 acquisition of Milwaukee-based Pick ’n Save operator Roundy’s Inc. Once a local grocery store giant, Pick ’n Save won the Milwaukee-area market share battle against Kohl’s Food Stores, Jewel-Osco and Sentry Foods in the 1990s and 2000s. But now, faced with new competitors (some of which even offer home delivery) like Meijer Inc., Whole Foods Market Inc., Costco Wholesale Corp. and Fresh Thyme Farmers Market, Pick ’n Save has had to slim down.

“Prior (Roundy’s) management made serious miscalculations assuming if they overbuilt, no one would come into the market, but as we all know, if you borrow money up to your eyeballs and the new competitors have minimal to no debt, you soon lose the game of chicken,” said grocery industry analyst David Livingston, who used to work for Roundy’s but now is managing partner of DJL Research LLC in Waukesha.

In August 2016, Livingston predicted 13 specific Pick ’n Save stores would close over the next five years because they were redundant and low performing in

FEATURED DEAL: 411 B U I L D I N G ADDRESS: 411 E. Wisconsin Ave., Milwaukee BUYER: An affiliate of Middleton Partners SELLER: Five Mile Capital Partners LLC CLOSING DATE: End of June SALE PRICE: $124.6 million

16 / BizTimes Milwaukee JULY 24, 2017

A CHICAGO-AREA real estate investment firm recently paid top dollar for the 30-story office tower at 411 E. Wisconsin Ave. in downtown Milwaukee.

Northbrook, Illinois-based Middleton Partners paid $124.6 million for the 411 Building, almost 70 percent higher than what Stamford, Connecticut-based Five Mile Capital Partners LLC paid for the office building in 2014, when the group bought it for $74.3 million.

The sale price was also well above the building’s assessed value of $92.4 million.

By comparison, U.S. Bank bought the 42-story U.S. Bank Center office tower for $203 million in late 1999.

The 693,000-square-foot 411 Building office tower has undergone $17.3 million in renovations over the past three years. Chicago-based Riverview Realty Partners has managed the building during that time and oversaw the renovations, which included upgrading the building’s elevator systems, HVAC system, lobby, roof and adjacent parking structures.

The property was 76 percent leased when it was acquired by Five Mile Capital in 2014. Today, occupancy is at 89 percent.

the market.

Of the six that have closed since May, Livingston had four of them on his list. He said he is surprised the closures have happened so fast.

“I thought they would do one (Pick ‘n Save store closure) a quarter, but maybe they wanted to speed things up because it is so tough to find employees,” Livingston said. “The stores that have closed are very close to other stores. This frees people up to move to other stores. I know Meijer has taken a lot of their employees.”

Livingston believes the pace of Pick ’n Save closures will slow, but also thinks there are still several stores that will eventually be shut down. He expects the first to go will be: • Wauwatosa, 1717 N. Mayfair Road • Waukesha Sunset, 220 E. Sunset Drive • Oak Creek Ryan Road, 2320 W. Ryan Road • South Milwaukee, 2931 S. Chicago Ave. • West Milwaukee Miller Park Way, 2201 Miller Park Way • Franklin The Shoppes at Wyndham Village, 7780 S. Lovers Lane Road “This could take up to five years,” Livingston said.

James Hyland, a Roundy’s spokesman, has repeatedly said the company will not comment on future store closings.

A bright side for Roundy’s has been the conversion of its Pick ’n Save store at 6950 W. State St. in Wauwatosa into a Metro Market.

The five-month transformation will be completed in late September or early October, and will offer customers expanded floral, produce, bakery and deli departments; a new and expanded natural and organic section; a beer and wine bar; and fresh pizza, Todds BBQ and freshly prepared sushi, Hyland said.

“Suffice it to say there will be a large expansion of fresh,” Hyland said.

Hyland would not say how much Roundy’s is spending on the

conversion, but said the investment is significant.

“The State Street Tosa conversion is one example of the significant capital investment we are making across our network of Wisconsin stores,” Hyland said in an email. “Metro Market is a specialty food retail banner, which combines our value-oriented conventional offering with an enhanced selection of full-service premium perishable and prepared food departments.”

The Wauwatosa store will be Roundy’s sixth Metro Market in Wisconsin. Other stores are located in Mequon, Brookfield, Shorewood, Cottage Grove and downtown Milwaukee.

“The Metro Market in Wauwatosa definitely made sense; it is a higher income area,” Livingston said. “But at the same time, that is why the Highway 100 store will probably close – the bank has already pulled out of that store.”

Livingston believes Kroger will convert more Pick ’n Saves into Metro Markets where it makes sense, possibly at Pabst Farms in Oconomowoc, and in Delafield, Fox Point, Hales Corners and Grafton, he said.

As far as the store closings, Livingston said they’re not necessarily a bad thing.

“It benefits everyone but the landlord,” he said. “Half of the sales go to the other Pick ’n Saves, which helps those stores’ sales per square foot, and the other half goes to the competitors. Kroger is just taking Pick ’n Save into the 21st century.” n

WALKER’S POINT CONDOMINIUMS Milwaukee architect and developer Peter Renner is planning to build a seven-story, 72-unit condominium building along the Milwaukee River in the city’s Walker’s Point neighborhood.

The $50 million project, called South Water Condominiums, at the corner of East Pittsburgh Avenue and South Water Street, would be the first condo development in Milwaukee since 2008.

Renner has the site at 234 S. Water St. under contract and is working with construction firms on bids.

The South Water Condominiums will include two floors of above-ground parking and one-, two- and three-bedroom condos above. The majority of the condos will be two-bedroom units ranging in size from 1,800 to 2,200 square feet.

OWNER: An affiliate of VJS Construction, of Pewaukee SIZE: 72 units on a 0.72-acre vacant parcel COST: $50 million

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STORY COVER

HELP D E T N WA

18 / BizTimes Milwaukee JULY 24, 2017

try s u d n i r u o y n i ar e y e h t f o t s e r the r o f t c e p x e o t t Wha AR MID-YE

Nearly six months into the Trump administration, the U.S. economy remains on a similar path to most of the Obama presidency. Steady – but slow – growth.

The U.S. gross domestic product only grew 1.4 percent in the first quarter, after a meager 2.1 percent gain during the fourth quarter of 2016. Second quarter GDP will be announced near the end of this month.

Job growth in the U.S. has remained steady, but not spectacular. The U.S. economy added 2.2 million jobs in 2016, an average of 187,000 per month. For the first half of 2017, the U.S. economy added nearly 1.1 million jobs, an average of 179,500 per month.

The sluggish GDP growth and steady job growth have occurred as the unemployment rate has reached extremely low levels.

The U.S. unemployment rate is now at 4.4 percent. It reached 4.3 percent in May, which was the lowest it has been since May 2001, four months before the Sept. 11 terrorist attacks. The unemployment rate in Wisconsin is even lower, at 3.1 percent, its lowest level since October 1999.

But while the low unemployment rate is great for workers and the economy, it has not translated into more robust economic growth.

The low unemployment rate could be a sign the economy is reaching the peak of its long post-Great Recession expansion period. If the labor market is essentially fully employed, it could be difficult to achieve greater economic growth. Several employers have said they are struggling to find the workers they need to grow their businesses. With the baby-boom generation moving into retirement and unemployment so low, it’s not surprising that good help is hard to find.

“The economy can’t stay strong if labor availability is weak,” said Kurt Bauer, president and chief executive officer of Wisconsin Manufacturers & Commerce. “Wisconsin needs to attract labor from other states and abroad in order to grow our economy.”

Hiring has improved in Wisconsin during the first half of the year. The state added 24,000 private sector jobs during the first five months of the year, after only adding 11,590 private sector jobs in all of 2016. But the state lost 1,700 private sector jobs in May, according to preliminary estimates.

The shortage of labor should result in rising wages, which would help boost the economy. But wages have only increased modestly. Private em-

MIC ECONO

ST FORECA

ployee wages in the U.S. are up only 2.5 percent year-over-year.

“A crucial measure of how far from full recovery the economy remains is the growth of nominal wages (wages unadjusted for inflation). Nominal wage growth since the recovery officially began in mid-2009 has been low and flat,” according to a recent report from Washington, D.C.-based Economic Policy Institute. “This isn’t surprising – the weak labor market of the last seven years has put enormous pressure on wages. Employers don’t have to offer big wage increases to get and keep the workers they need. And this remains true even as a jobs recovery has consistently forged ahead in recent years.”

“It will take wage growth of at least 3.5 to 4 percent for workers to begin to reap the benefits of economic growth – and to achieve a genuine recovery from the Great Recession,” the EPI report states.

In Washington, Trump and Republicans in Congress are eager to approve a tax reform package they say will increase economic growth. Trump also wants to advance a major infrastructure improvement plan. But both the tax reform and infrastructure plans remain on hold as Republicans in Congress continue to seek an agreement on how to repeal and replace the Affordable Care Act. Business leaders are watching closely to see how those issues play out.

For more insight about the macroeconomic outlook for the second half of 2017, BizTimes Milwaukee editor Andrew Weiland recently spoke with Scott Adams, a professor and the chair of the economics department at the University of Wisconsin-Milwaukee. The following are excerpts from that interview.

BIZTIMES: The U.S. unemployment rate is 4.4 percent.

The unemployment rate in Wisconsin is even lower, at 3.1 percent. But overall economic growth remains modest. Is the unemployment rate something of a headwind at this point? Does it indicate a lack of people available to bring into the labor pool and therefore, a lack of opportunity to increase economic growth?

ADAMS: “The combination of the low unemployment rate and slow growth is puzzling economists.

One thing that strikes me is wage growth is pretty low as well. When you have unemployment rates that are so low and wage growth that is so low, to me it indicates that workers aren’t moving around as much as they should be. Perhaps workers are reluctant to move around or ask for higher wages because they recently lived through the worst re-

cession of their lifetimes. Perhaps there’s a little bit of stagnancy among the workers.

That, in turn, hurts productivity, keeps their wages low.

That might be an explanation why we have this unusual result. You also have that in the (Consumer Price Index), you ADAMS have inflation remaining low as well. All of this suggests that everyone is maybe still fearful of losing their jobs.”

BIZTIMES: It sounds like you think the Great Recession

is still having a psychological effect on the workforce. I know my grandparents never forgot the Great Depression. They would tell stories about it and it influenced their behavior. They were very frugal. Is the Great Recession having a similar effect on our generation?

ADAMS: “Absolutely. Other economists have said the same thing, but that’s my take on what’s going on.”

BIZTIMES: We hear a lot from business owners who

say they cannot find enough people to fill open positions. We hear talk about a skills gap between those who are seeking jobs and the skills required for available jobs. But isn’t it bigger than that? Especially in Wisconsin, aren’t we faced with an actual shortage of people, a human gap, not just a skills gap?

ADAMS: “People have been talking about the skills gap for decades. I just think to some extent, employers are reluctant to pay for the type of workers to fill those positions. Employers would more than happily pay foreign workers to do these jobs who might accept a lower wage than the older workers who are trying to get back to the jobs they once had. I think there’s some age discrimination going on here, as well. If you have a skilled worker with the experience and the tools necessary to do the job and is 50 years old, the company might be reluctant to hire that worker. But I also think that training takes some time to catch up to the skills that are needed. What we see now is the emergence of the importance of soft skills, like personality, the ability to communicate, leadership skills. I think employers are increasingly looking for people who have a technical skill but are being fairly picky, so they are leaving some positions unfilled maybe because they are not finding the people with the soft skills to fill it, as well.”

BIZTIMES: Why do you think employers are unwilling

to pay people more? biztimes.com / 19

AN TE D HE LP W ADAMS: “If you can hold out and think you

can hold out for somebody that’s cheaper that can do the same job and you have some inventories, which might be the case with slow economic growth, you’d be willing to take that chance. Now if the economy starts growing faster, I think some of these things will take care of themselves.”

ly under control, I can see them continuing to raise the interest rate. That way, if we end up in another recession, the Fed will have some levers to pull and they could reduce the interest rate to try to spur the economy. I think they want to get the interest rate at a more manageable level so in the future, they will have that option. But I don’t see a lot of big effects on the economy of their action in the coming years.”

BIZTIMES: Any thoughts on the federal health care

BIZTIMES: Isn’t it incumbent on the employee to

debate?

demand and seek higher wages?

ADAMS: “I think if you see more people moving around the country, if you see workers having a little bit more power in the relationship, maybe you wouldn’t see this happening. But if employers are still able to get away with paying lower wages, then they will.”

ADAMS: “I don’t foresee any real changes in health

care coming anytime soon. Republicans are in two factions. One wants to reduce the government footprint as much as possible and they are not satisfied with the bill that’s coming out. And then you have the group of Republicans who also are saying, ‘This bill isn’t particularly good for my constituents

BIZTIMES: Turning to national economic policy,

what do you expect the Fed to do with interest rates the rest of the year and what impact will it have?

ADAMS: “I anticipate they will continue to be cautious and they will continue to raise interest rates slightly. I don’t see an immediate impact of those actions. As long as the economy is growing and as long as inflation seems to be relative20 / BizTimes Milwaukee JULY 24, 2017

. . . . . . . . . . . . . . . . . . . . . . . .Q&A continued on page 33

cts Labor force fa

BIZTIMES: What about the human gap? Does a

state like Wisconsin, which has seen slow population growth, need to find new ways to attract workers to fill these jobs? How do we attract more talent and labor to fuel our state’s economy?

ADAMS: “It’s not just Wisconsin. The states around us are experiencing slow population growth. Part of it is demographics. You have fast growing Hispanic populations in the United States and you just don’t have a large Hispanic population here. This is not really a place that has a large influx of immigrants. The demographics are working against us there as well.

We have fewer young people in the state than in the past couple of decades. The high school population in the state is low, as well. That’s going to reduce the output of the university system. The university can attract students from out of state and try to keep them. That’s mostly an issue for (UW-) Madison. But the students that go to Madison may have plans to go elsewhere when they graduate. They may plan to move to large population hubs. Milwaukee can certainly get some of them, but a lot of them are interested in leaving the state. I think we’ve done some things to make the state attractive.

The taxes have been kept relatively low. Maybe they could be lower, but I think the taxes are reasonably low. We’ve done the best we can to improve the quality of life in the state, but we can’t change the weather. I think we are just sort of tied to the demographics. I don’t know what else we might do to attract more people to the state.”

because it’s going to throw people off of Medicaid and they will flood the hospitals. This isn’t going to reduce health care costs.’ I think the Republicans themselves aren’t at this point in a position to agree on something to move it forward. The current bill that’s put out by the Senate is just a complete disaster. It’s going to lead to people becoming uninsured.

It’s not going to do a thing to lower health care costs. It might even increase them because you are going to have people showing up at the emergency rooms more. And, I think all of this is a disguised tax cut for the very wealthy. Time and time again tax cuts for the very wealthy do not do a whole lot to spur economic growth. I think economists are largely in agreement on that. From a health care standpoint and an economic standpoint, what the Senate has put forward is just a terrible idea.”

4.4 %

U.S. unemployment rate

3.1 %

Wisconsin unemployment rate

Average monthly U.S. job growth 2016

2017

187,000 179,500 Year-over-year wage increase in U.S.:

2.5 %

Impossible is vastly overestimated.

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Q&A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . from page 20

BIZTIMES: Speaking of taxes, President Trump

and Republicans in Congress have also promised major tax reform. Do you think that will get done, and if so, what impact will it have?

ADAMS: “They have certainly hurt their political capital with their failure to get anything done to this point on health care. So I am not optimistic they will get anything done on the tax code. I anticipate six months from now talking about the same thing. The last time we had major tax reform, we had a long bipartisan effort and a president that was willing to work with both parties. We just don’t have that political climate right now, so I’m not optimistic they will get anything done. And again I don’t think the Republican Party itself is in agreement on who should have the tax cuts and how big they should be. You will have a faction that will say, ‘We should reduce taxes on the wealthiest.’ You will have a faction that say, ‘We should reduce taxes evenly across the board.’ You are going to have them arguing with each other.”

BIZTIMES: Is Trump’s goal to bring manufacturing

jobs back to the United States realistic?

ADAMS: “You can’t change worldwide economic forces. If you could reverse it, that’s going to lead to higher priced goods and consumers are going to have to spend more. You can’t fight that. What you can do is try to adjust. Where you have seen success is to attract and try to fill jobs in a more higher tech manufacturing sector. But that goes back to the human problem you said before.”

BIZTIMES: Big picture for the second half of the

year, where do you think GDP is going to be?

ADAMS: “Continued slow growth. The one bright side is consumer confidence is up and we are a consumer-driven economy. But it’s still sort of fluctuating. It seems the economy will continue to have this slight, steady, slow growth. Wages will kind of stay put, unemployment will stay low. We’ll wait until consumers and workers gain even more confidence and are able to shake the economy up a little bit and get it out of its stagnant state.”

BIZTIMES: So GDP at two-some percent, proba-

bly?

ADAMS: “Oh, yeah. I don’t think anything be-

yond that is expected.”

BIZTIMES: Is the low unemployment rate at this

point a headwind?

ADAMS: “I don’t know if in-and-of-itself it is.

But along with low wages, it’s a signal that something else is going on that is keeping the economy flat. The number in-and-of-itself isn’t a headwind, but what is causing it might be a headwind.” n biztimes.com / 33

al R Spe ci MID-

YEAR

eport ECO

IC NOM

FORE

CAST

Area business leaders more optimistic than last year

• 66 percent expect higher profits in the third quarter, up from 58 percent a year ago.

• 61 percent are forecasting employment gains, up from 44 percent who did so a year ago.

More predicting profit and sales gains in Q3

By Andrew Weiland, staff writer HEADING INTO THE THIRD QUARTER, area business leaders are more optimistic than they were a year ago, based on the results of the Metropolitan Milwaukee Association of Commerce’s quarterly business outlook survey.

The survey contains responses from 100 Mil-

waukee-area firms, both large and small, that employ a total of more than 30,750 people.

Based on the results of the survey: • 70 percent expect higher sales in the third quarter, up from 65 percent a year ago.

“The economic mood among metro area businesses remains generally positive, with expectation levels pointing toward continuing growth in 2017’s third quarter,” said Bret Mayborne, the MMAC’s economic research director. “Despite the metro area’s lackluster job trend over 2017’s first five months, businesses remain optimistic toward the possibility of future employment growth in their local

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operations.”

This is the first time since the third quarter of 2015 that 70 percent or more of survey respondents predicted sales gains in two consecutive quarters. In the last MMAC survey, 75 percent of area businesses said they expected sales gains during the second quarter.

Only 6 percent of area businesses expect third quarter sales declines and 24 percent expect no change.

The number of businesses predicting third quarter profit growth (66 percent) was higher than in the second quarter survey, when 62 percent predicted profit growth.

Only 4 percent expect third quarter profit declines, while 30 percent expect no change in profit levels.

The expectations for job growth (61 percent) also improved from the second quarter, when 55 percent expected employment growth.

Only 10 percent predicted employment declines in the third quarter.

In a separate MMAC report, the metro Milwaukee economy showed improvement in May, as 16 of 22 of the economic indicators tracked by the association posted year-over-year increases, up from just 11 improved indicators in April. The May report is the most recent of the MMAC’s monthly economic indicator reports.

“A primary factor in this upgrade was an improving employment trend, both overall and across a majority of industry sectors,” Mayborne said.

The number of jobs in the metro area rose 0.3 percent in May after falling 0.5 percent in April. The education and health services sector had the biggest employment gain in the area, up 1.6 percent in May. The number of unemployed people in the area was down 26.8 percent in May, to an average of 25,400. New unemployment compensation claims were down 6.4 percent.

The Milwaukee area’s seasonally unadjusted unemployment rate was 3.1 percent in May, down from 4.2 percent a year ago. The state’s unadjusted unemployment rate for May was 2.8 percent, and the nation’s was 4.1 percent. n

s for Q3: n o ti ta c e p x e ss e Area busin

70% expect higher sales 66 % expect higher profits 61 % expect employment gains Source: MMAC third quarter business outlook survey biztimes.com / 23

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Gardner Denver, REV Group IPOs off to good start

By Andrew Weiland, staff writer FORMER BUCYRUS INTERNATIONAL INC. chief executive officer Tim Sullivan left the company after it was acquired by Caterpillar Inc. in 2011. Since then, Sullivan has become CEO of two other large manufacturing firms and moved their headquarters to Milwaukee. First, Gardner Denver Inc. moved its headquarters from the Philadelphia area to Milwaukee in 2014 and then REV Group Inc. moved its headquarters from Orlando to Milwaukee in 2016.

The two companies both went public this year, and their stock performance got off to a strong start. REV Group’s IPO was in January, and its stock price rose 26 percent by June 30.

Gardner Denver’s IPO was in May, and its stock price rose 8 percent by June 30.

REV Group and Gardner Denver were two of several area manufacturers that saw their stock prices rise during the first half of the year. The stock prices for Johnson Outdoors Inc., Rockwell Automation Inc., A.O. Smith Corp., Rexnord Corp., Modine Manufacturing Co., Twin Disc Inc., Briggs & Stratton Corp. and Badger Meter Inc. all rose between 8 and 21 percent during the first six months of the year.

During the first half of the year, the Dow Jones Industrial Average was up 9.35 percent, the S&P 500 Index was up 9.34 percent and the Nasdaq Stock Market was up 14.7 percent.

But local stock performance varied widely, said Katherine Schoen, manager of private wealth management equity and fixed income research for Robert W. Baird & Co. Inc. “For the first half of this year, there’s a lot of deviation throughout that list (of area publicly traded companies),” she said.

Larger companies generally had stronger 24 / BizTimes Milwaukee JULY 24, 2017

stock performances than smaller companies during the first half of the year, Schoen said.

Stocks for large technology companies in particular performed well.

In addition to REV Group, the top performing local stocks were Milwaukee-based ARI Network Services Inc., up 30 percent to $7.05 and Milwaukee-based ManpowerGroup Inc., up 26 percent to $111.65.

ARI last month agreed to be acquired by San Francisco-based private equity firm True Wind Capital for about $140 million.

ManpowerGroup, which this year ranked 146th on the Fortune 500, reported a 3.8 percent profit increase in the first quarter of this year and a 5.7 percent profit increase in the fourth quarter of 2016.

Two of the worst-performing local stocks were large retailers: Menomonee Falls-based Kohl’s Corp. and The Bon-Ton Stores Inc., the parent company of Boston Store, with dual headquarters in Milwaukee and York, Pennsylvania. Kohl’s stock fell 22 percent, to $38.67, during the first half of the year. Bon-Ton’s stock fell 70 percent, to 44 cents per share, during the first half of the year.

Like many brick-and-mortar retailers, Kohl’s and Bon-Ton are facing major challenges from online retailers, especially Amazon.com. During the first half of the year, several major retail chains announced plans to close stores.

Many retailers have too many stores and need to adjust to a new environment in which consumers do less shopping in person and more online, Schoen said.

“Obviously (America was) over-retailed,” she said. “It’s a shifting dynamic in how people

prefer to spend their money.”

Bon-Ton has not turned an annual profit since 2010. This spring, S&P Global Market Intelligence named Bon-Ton one of 10 retail companies most at risk to file for bankruptcy.

Kathryn Bufano, who became the company’s president and chief executive officer in 2014, will leave Bon-Ton when her contract expires in late August.

Cudahy-based Roadrunner Transportation Systems Inc. saw its stock price fall 30 percent, to $7.27, during the first half of the year. In January, the company announced it had discovered accounting errors involving unrecorded expenses at two subsidiaries that could result in $25 million in adjustments to its results and at least a $200 million goodwill impairment charge. Former chief financial officer Peter Armbruster, who had been with the company since 2005, was terminated at the end of March. Mark DiBlasi, who had been CEO since 2006, was removed from his role. A new CEO and CFO were named. Roadrunner also said it will shift its headquarters to Downers Grove, Illinois. About 185 jobs will remain in Cudahy.

Brookfield-based Connecture Inc.’s stock fell 63 percent, to 62 cents per share, during the first half of the year. The health insurance marketplace software developer on May 4 received a deficiency notice from Nasdaq indicating it has not met the required $15 million minimum market value of publicly held shares for the past 30 consecutive business days. Per Nasdaq rules, Connecture has until Oct. 31 to bring its market value into compliance with this rule, or its stock will be delisted. A report from mergers and acquisitions intelligence site Mergermarket indicated Connecture was facing shareholder pushback and should consider selling the company. The company reported a net loss of $3.7 million in the first quarter, compared with a net loss of $7.3 million in the first quarter of 2016. n

BizTimes Stock Index 2017 mid-year performance

TICKER

COMPANY NAME

12/31/16 PRICE

6/30/17 PRICE

% CHANGE

ARIS

ARI Network Services Inc.

$5.41

$7.05

30%

REVG

REV Group Inc.

22*

27.68

26%

MAN

ManpowerGroup Inc.

88.87

111.65

26%

JOUT

Johnson Outdoors Inc.

39.69

48.21

21%

ROK

Rockwell Automation Inc.

134.40

161.96

21%

AOS

A. O. Smith Corp.

47.35

56.33

19%

RXN

Rexnord Corp.

19.59

23.25

19%

FISV

Fiserv Inc.

106.28

122.34

15%

MOD

Modine Manufacturing Co.

14.90

16.55

11%

TWIN

Twin Disc Inc.

14.60

16.14

11%

MTG

MGIC Investment Corp.

10.19

11.20

10%

BGG

Briggs & Stratton Corp.

22.26

24.10

8%

GDI

Gardner Denver Inc.

20**

21.61

8%

BMI

Badger Meter Inc.

36.95

39.85

8%

DOC

Physicians Realty Trust

18.96

20.14

6%

JCI

Johnson Controls Inc.

41.19

43.36

5%

WEC

WEC Energy Group Inc.

58.65

61.38

5%

APAM

Artisan Partners Asset Management Inc.

29.75

30.70

3%

SXT

Sensient Technologies Corp.

78.58

80.53

2%

WSBF

Waterstone Financial Inc.

18.40

18.85

2%

ASB

Associated Banc-Corp

24.70

25.20

2%

WBB

Westbury Bancorp Inc.

20.70

20.85

1%

PLOW

Douglas Dynamics Inc.

33.65

32.90

-2%

BKMU

Bank Mutual Corp.

9.45

9.15

-3%

MCS

Marcus Corp.

31.50

30.20

-4%

ATU

Actuant Corp.

25.95

24.60

-5%

HOG

Harley-Davidson Inc.

58.34

54.02

-7%

SNA

Snap-on Inc.

171.27

158.00

-8%

BRC

Brady Corp.

37.55

33.90

-10%

WEYS

Weyco Group Inc.

31.30

27.88

-11%

GNRC

Generac Holdings Inc.

40.74

36.13

-11%

STRT

Strattec Security Corp.

40.30

35.40

-12%

QUAD

Quad/Graphics Inc.

26.88

22.92

-15%

KOSS

Koss Corp.

2.28

1.81

-21%

KSS

Kohl's Corp.

49.38

38.67

-22%

JASN

Jason Industries Inc.

1.80

1.29

-28%

RRTS

Roadrunner Transportation Systems Inc.

10.39

7.27

-30%

ESNC

EnSync Inc.

0.72

0.37

-49%

CNXR

Connecture Inc.

1.68

0.62

-63%

BONT

The Bon-Ton Stores Inc.

1.47

0.44

-70%

*REVG IPO-ed on 1/27/17 at a price of $22. **GDI IPO-ed on 5/12/17 at a price of $20.

PRESENTS:

2017

Call for Nominations BizTimes Media presents the fourth annual awards program to salute southeastern Wisconsin’s best corporate citizens and most effective nonprofit organizations.

The awards will shine a light on excellence in philanthropy and nonprofit leadership. The recipients of the awards will be saluted at a breakfast program on November 2nd, 2017.

Nominate the people and for-profit organizations who are making a positive difference in the community by donating their time, talent and treasure. Nominate the nonprofit organizations that are making the region a better place to live, work and play. Self-nominations also are encouraged!

2017 Awards Categories Corporate Citizenship Awards • Corporate Citizen of the Year • Next Generation Leadership • In-Kind Supporter • Corporate Volunteer of the Year • Lifetime Achievement

Save the Date: November 2, 2017

Nonprofit Organizations, Leadership & Support Team Awards • Nonprofit organization of the year (Small & Large Categories) • Nonprofit Collaboration of the year award • Nonprofit Executive of the Year • Social Enterprise

Nominate Today! www.biztimes.com/npawards Nomination Deadline: August 31, 2017 SPONSORS:

All data taken from Factset Research Systems. This information has been obtained from sources we consider to be reliable, but we cannot guarantee the accuracy.

Research compiled by Robert W. Baird & Co. Inc. biztimes.com / 25

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M&A demand continues to outpace supply Proposed tax changes could further heighten activity

By Molly Dill, staff writer THERE WERE 6,504 ANNOUNCED U.S. mergers and acquisitions deals in the first half of 2017, totaling $583.9 billion, according to Thomson Reuters. The total deal value fell 15.9 percent, from $694.7 billion during the first half of 2016, but the number of deals was up 17.3 percent, from 5,544 in the prior year.

Industrials led the way in the total number of worldwide deals in the first half of the year.

Measured by total deal value, the energy and power sector came out on top.

Exit multiples varied by industry, but in the U.S., high-technology companies commanded the highest multiples, at 27.4x EBITDA. The lowest U.S. multiples were reported in telecommunications, at 9.1x.

Of particular note in Wisconsin, U.S. industrials companies commanded 15.1x EBITDA in the first half, up from 9.8x in the first half of 2016. Consumer products and services multiples saw a meteoric rise year-over-year, from 4.4x in the first half of 2016 to 17.7x through

June 30 of this year.

There are a few national and global factors that could have an impact on M&A activity in the second half of the year.

If the major corporate tax reform promised

by President Donald Trump goes into effect, it could drive higher deal flow by leaving companies with more cash on their balance sheets, said Steven Barth, partner and co-chair of the Transactional and Securities practice at Foley & Lardner LLP in Milwaukee.

Another Trump administration proposal to offer a lower one-time tax on capital held offshore by U.S. corporations as an incentive to repatriate the funds could also increase strategic deal activity. If corporations bring back cash, they would likely deploy it into additional M&A, Barth said.

“Do they pay down debt, do they pay out dividends, do they use it to fund acquisitions?

Our view is that a lot of that extra liquidity is going to be put to work with companies being

much more aggressive in their acquisitions,” he said.

“If we repatriate capital, that can only help the M&A market,” said Ronald Miller, president and managing director at investment bank Cleary Gull Inc. in Milwaukee. “It probably helps the megadeal market and doesn’t have as much of an impact on the smaller deal market.”

The repatriation tax would have different levels of impact depending on how long it is in effect, Barth said.

“If it’s permanent, (companies) can take their sweet time of bringing (cash) home,” Barth said. “If it was something of a temporary tax holiday, the flow of money into the U.S. … has to be used by this company somehow.”

But Tammie Miller, managing director at Milwaukee investment bank TKO Miller LLC, argues bringing back foreign cash won’t increase deal flow because it won’t solve the supply problem. “(Buyers) weren’t waiting for cash to be able to make acquisitions because they have it already,” she said. “What they want is companies to buy and there’s definitely a shortage of those.”

And most of the corporations repatriating cash are in the technology and pharmaceutical sectors, which aren’t strongly represented in Milwaukee, Tammie Miller said.

At the moment, those potential changes haven’t affected M&A activity, Barth said.

“Right now, it’s too speculative to have any impact,” he said. “If it starts getting closer, if there was a bill that was passed by the House, for example, before it gets to the Senate, then it would start impacting the timing of deals.”

“Until there’s more clarity in what the government does, I’m not seeing an impact either way,” Ron Miller agreed.

LEFT: Among the largest southeastern Wisconsin deals in the first half of the year was Komatsu Mining Corp.’s $3.7 billion acquisition of Joy Global Inc. RIGHT: Fiserv Inc. is expected to close on its $89 million acquisition of Monitise plc in the second half of the year.

26 / BizTimes Milwaukee JULY 24, 2017

Interest rates are still very low and banks are eager to lend, so it’s relatively easy for companies to borrow money. Corporations’ balance sheets are strong and the value of their stock is at record highs. And private equity funds have lots of capital to deploy. It continues to be an ideal environment for robust M&A activity.

In the first half of the year, among the largest southeastern Wisconsin deals were Komatsu Mining Corp.’s $3.7 billion acquisition of Joy Global Inc. and Chicago-based Hill-Rom Holdings Inc.’s $330 million acquisition of Milwaukee-based Mortara Instrument Inc. In the second half of the year, Brookfield-based Fiserv Inc. is expected to complete its $89 million acquisition of Monitise plc.

In Milwaukee’s lower middle market, deal flow was slow in the first quarter but picked up in the second, Ron Miller said.

“I think it’s a combination of a really strong financing market, more stability in the economy and slightly improved macroeconomic data,” he said. “Maybe the election put a little bit of a pause or question about what was going on.

Now it’s pretty much business as usual.”

There continues to be more demand than supply in the marketplace, and plenty of money chasing too few deals, Ron Miller said.

“There’s hardly a private equity fund or a public company or private company that isn’t a buyer in this environment,” he said. “It’s just hard to find the targets. For a 2 percent

growing economy, it’s kind of hard to find organic growth. There’s really a continued trend towards add-on acquisitions.”

Because of the short supply, private equity firms are showing more flexibility in what they’re willing to consider, such as companies with EBITDAs as low as $2 million, Tammie Miller said.

She’s seeing more family- and founder-held, medium-sized businesses, particularly among retiring baby boomers, start to prepare to come to market, which could gradually add to the local supply.

“The mom-and-pop-owned, salt of the earth manufacturing companies are just moving a little more slowly, I think,” she said. “They’re asking, ‘Is my family ready for this? Am I ready for this?’ So they’re a little slower to come to market.”

All that demand means prices are up, and buyers must differentiate themselves in whatever way they can.

Multiples have increased over the past three years, up more than 1x EBITDA in the lower middle market, Ron Miller said.

“7x is the new 6x,” he said. “We have some lower middle market companies that are commanding double-digit EBITDA multiples. But those have strong management teams, predictable cash flows and a very refined business plan.”

Companies in the business services sector, specifically packaging, are particularly hot right

now, Tammie Miller said.

“Even our companies that we’re taking to market that have some challenges are getting 10 to 15 offers at really high prices,” she said.

“That’s an indicator that the market is really hot because normally those would be a challenge to sell.”

Industrial firms with exposure to the energy sector saw some softness in the first half, Ron Miller said.

On the flip side of the increase in valuations is higher buyer scrutiny, he said.

“Sellers need to be extremely prepared if they want to achieve a really high price,” he said. “If you’re selling a company at 5x, the buyer’s willing to look the other way on small imperfections. If it’s 10x, they will make sure that you fix anything that isn’t perfect.”

Looking ahead, U.S. M&A activity would likely only be slowed at this point by an unexpected macroeconomic incident that dramatically impacts markets and economies, the experts agreed.

“I don’t see the dynamic changing for the next 12 to 18 months unless there’s an external shock to the system or event,” Ron Miller said.

“We’ve been saying for two years now, it’s going to be something, it’s going to be something,” Tammie Miller said. “It might be interest rates rising. It will be some macro event that impacts valuation that will slow activity down.

It’s going to happen.” n

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A now hiring sign at the Brady Corp. headquarters in Milwaukee.

Workforce issues remain top of mind for manufacturers

By Arthur Thomas, staff writer WISCONSIN’S MANUFACTURING SECTOR has been trending in a positive direction through the first half of 2017. Hiring is up, wages are pushing higher and surveys of business optimism have been at their highest points in two years.

“It’s really hard to find something negative in this environment,” said Doug Fisher, director of the Marquette Center for Supply Chain Management.

Many manufacturers entered 2017 optimistic about what a Trump administration and Republican control of Congress would mean for the industry. Fisher pointed out that regardless of how someone feels about plans for health care, tax or regulatory reform, or a massive infrastructure package, those policy changes would likely benefit manufacturers.

While significant changes to those areas have yet to become a reality, business has continued to be strong for manufacturers. The Milwaukee-area PMI produced by Fisher’s center each month jumped from the low 50s to nearly 60 at the start of the year and has averaged 59 over the past six months. The survey-based index is a measure of manufacturing activity in the region, and a reading of greater than 50 indicates growth in the sector.

“I’d say it’s optimistic,” Fisher said. “It’s in safe, positive territory.”

Buckley Brinkman, executive director and chief executive officer of the Wisconsin Center for Manufacturing & Productivity, said many who were expecting policy changes underestimated “the power of inertia in the federal government.” But he added there’s plenty of things manufacturers can do without policy changes becoming reality.

“When we talk about increased regulation, when we talk about the tax structure, when we 28 / BizTimes Milwaukee JULY 24, 2017

talk about foreign competition, it really gives manufacturers and other businesses an excuse to not stay competitive,” Brinkman said.

Staying competitive means addressing a host of short- and long-term issues in the industry, he said, from workforce development to cybersecurity to additive manufacturing, robotics and the Internet of Things.

“You’re going to need to have an integrated approach to your talent, technology and techniques to really compete going forward,” Brinkman said.

Finding enough workers is the most pressing concern for manufacturers, he said. It is an issue Brinkman has been concerned with for a number of years and he said it has the potential to limit growth in the economy.

“There is an upper end limit on what we can do right now because of our workforce issues,” he said.

Fisher said it may not be a limiting factor in the next six months, but five years from now could be a different story.

“Seeing (workforce challenges) right now certainly hasn’t dampened the growth prospects I’m seeing,” he said.

The manufacturing sector statewide has increased employment an average of 0.9 percent over the first five months of the year, according to data from the U.S. Bureau of Labor Statistics.

While that figure is slightly behind the private sector job growth pace as a whole, it is an improvement over the job losses seen last year.

The metropolitan Milwaukee area has seen slower growth in manufacturing jobs, averaging a 0.4 percent increase. Wages for production workers in the region are averaging an 11.6 percent increase compared to 2016, better than the 5.7 percent increase statewide.

Those figures are a substantial improve-

ment over the full-year data for 2016, when wages averaged a 1.6 percent increase from the previous year and metro Milwaukee’s manufacturing sector was a major contributor to the worst 12-month period for job growth since mid-2010.

Some employers and organizations attributed the drop to challenges finding employees. Brinkman said he’s seen a small but growing group of businesses deciding they are content with their size and not seeking to grow any larger.

“That’s a terrifying prospect to me,” he said.

Even with unemployment rates approaching record low levels, Brinkman said there are opportunities for employers to add to their workforce if they are willing to make an investment.

“The people that we have left in the employment pool are not traditional employees; they’re going to come with some baggage,” he said, noting the goals of employers and those working on social problems seem to be more aligned than in the past. “I think we can have a huge impact.”

Fisher said he likes the work being done to attract students to trade and technical schools to prepare workers with a higher skill level.

“I think that’s a really big hole that needs to be filled,” he said.

Looming on the horizon for manufacturers are a host of technological changes, some of which could help businesses mitigate workforce challenges. Automation, robotics, additive manufacturing or 3-D printing, and the Internet of Things all threaten to disrupt the industry.

“For the large manufacturers, they’re working on it and they’re coming to grips with those issues, but they really don’t have it figured out,” Brinkman said.

He added that small and medium manufacturers could find themselves in a precarious position over the next 12 to 18 months if they aren’t preparing for technological changes.

“It is something where you should know what the major trends are and how they’re likely to affect your organization,” Brinkman said.

It will also require larger original equipment manufacturers to be more responsive and helpful to drive changes throughout the supply chain.

“It takes a lot more cooperation than it did in the past to make a technology pay off,” Brinkman said.

He said many employers are either not looking at those trends or they are focused only on getting orders out the door.

“The vast majority of manufacturers in the country I think are asleep at the switch,” he said.

Brinkman said one area businesses could address beyond their workforce is cybersecurity. Increasingly connected machinery creates new risks and vulnerabilities, but addressing them early can limit costs. Potential customers, especially in the defense and automotive markets, are going to require manufacturers to demonstrate they can meet higher cybersecurity standards in the coming years, he said. n

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Northwestern Mutual Life Insurance Co. will open the new office tower at its downtown Milwaukee headquarters campus on Aug. 21.

Northwestern Mutual Tower & Commons finally nears completion

By Corrinne Hess, staff writer MILWAUKEE’S SKYLINE has been transformed this year, with 32 new stories of steel and glass now framing the skyline.

When Northwestern Mutual Life Insurance Co. announced it would build a new, $450 million office tower at its headquarters campus in downtown Milwaukee, it served as a bellwether for many firms that the city was a good place to invest.

In late August, three years after the company broke ground on its 1.1 million-square-foot project, the Northwestern Mutual Tower & Commons will finally be complete.

30 / BizTimes Milwaukee JULY 24, 2017

“There have been several key developments over the last few years, but NML is probably the most key,” said Rocky Marcoux, commissioner for the Department of City Development. “With the history of the company and the statement they made in terms of its future downtown, it was a huge vote of confidence that really spurred a great deal of development.”

Another major ongoing downtown project, which won’t be completed until next year, is the new Milwaukee Bucks arena. In addition to the $524 million arena (financed by a mix of public and private funds), the Bucks are also

building a 55,000-square-foot training center, a 37,000-square-foot community health center and a six-story parking structure with ground floor retail.

At the lakefront, not far from the new Northwestern Mutual tower, the Downtown Transit Center has been demolished and the long-discussed Couture, a $122 million, 44-story luxury apartment tower, is still expected to break ground in late fall. The project includes 50,000 square feet of retail and a Milwaukee Streetcar stop.

Construction on the streetcar has been underway since April. Track installation began on West St. Paul Avenue from the Milwaukee River to the downtown Intermodal Station, and work has continued on Broadway in the Third Ward, from I-794 to Clybourn Avenue. This summer, streetcar work will continue on North Jackson Street, East Ogden Avenue and North

Office

“You are seeing a lot of investment in cities across the country. There has been a growth in appreciation of urbanism and cities across the country,” Marcoux said. “But the current development we are seeing in this city is unprecedented.”

—Rocky Marcoux, Department of City Development

Milwaukee Street and then back to St. Paul, from the Milwaukee River to North Milwaukee Street. The $124 million project is expected to be operational in 2018.

“You are seeing a lot of investment in cities across the country. There has been a growth in appreciation of urbanism and cities across the country,” Marcoux said. “But the current development we are seeing in this city is unprecedented.”

been more successful.

In April The Corners of Brookfield opened its first eight stores, including the state’s first Von Maur department store. Since then, additional stores have continued to open, including Sendik’s and L.L. Bean. A movie theater is also being proposed at the $200 million development.

In Greenfield, portions of 84South, a mixeduse development by Cobalt Partners at I-894 between West Layton Avenue and South 92nd Street, have been opening and Cobalt continues to announce new retailers. Cobalt also developed White Stone Station in Menomonee Falls, which includes retail, restaurants and apartments.

Milwaukee developer Mark Irgens is working to secure financing to break ground this year on the first phase of the $137 million BMO Harris Financial Center project. The bank will demolish its existing parking structure immediately north of its building at 770 N. Water St. to make room for a new 25-story office tower.

Fortune 500 financial services technology developer Fiserv Inc. is considering plans to move its corporate headquarters, currently located in Brookfield, to a new building. The company is considering development proposals for sites in Brookfield, Wauwatosa and Milwaukee.

Irgens is also still hoping to break ground on its project in the Third Ward and Milwaukee-based Mandel Group Inc. also has plans for a three-building office project in Walker’s Point, but both developments are dependent on securing tenants.

Industrial The region’s industrial market remains strong. During the second quarter of 2017, it absorbed 1.5 million square feet of space, a huge increase from a year ago, when about 800,000 square feet of space was absorbed.

The area added more than 1.8 million square feet of space during the quarter, led by Uline Inc.’s new 800,000-square-foot facility in Kenosha, and there is another 900,000 square feet of industrial space under construction in the region.

In Caledonia, village officials and the Racine County Economic Development Corp. are working to attract a large tenant that could build up to a 1 million-square-foot industrial building near Highway K and I-94 in the DeBack Farms Business Park development.

But the biggest potential new development in the area could be a massive plant for Taiwanese technology manufacturer Foxconn.

The firm, which makes most of Apple’s iPhones, is considering plans to build a massive plant, or several plants, in the United States. Wisconsin is one of several states being considered and state and local officials have met recently with Foxconn leaders, including founder and chairman Terry Gou. A memo written by state Legislative leaders indicated that Foxconn could build a plant with “up to 10,000 jobs” in southeastern Wisconsin. n

Retail The retail market has had many ups and downs since the beginning of the year, which will likely continue through 2017 and beyond.

Sears has announced it will close its stores at Southridge Mall in Greendale and in Kenosha, and many other smaller retailers have also closed.

But the changes in retail have opened up opportunities for the space.

In Brookfield, the city and Brookfield Square owner CBL & Associates are making future plans at the mall for spaces currently occupied by Sears and the former Sears Auto Center. Earlier this year, CBL bought the Sears store properties. The Sears department store remains open for now. The Sears Auto Center close in May According to preliminary plans, the Sears department store space at the mall could eventually be used for a 40,000-squarefoot entertainment center space and a 45,000-square-foot movie theater, and the city is considering building a 43,000-square-foot conference center and 175-room hotel at the site of the former Sears Auto Center.

Meanwhile, other retail developments have

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This home is for sale in Wauwatosa.

Local housing inventory will remain tight through end of year

By Corrinne Hess, staff writer THE MILWAUKEE METROPOLITAN area’s housing market is expected to remain hot for the rest of the year, which is great for sellers, but will continue to be tough on buyers searching for the perfect home.

There is currently about two-and-a-half to three months of inventory (the time it would take to sell all of the homes on the market at a given time) on the market in the area, much less than the ideal six months that brokers like to see for a balanced market in which neither buyers nor sellers have the upper hand.

“Most brokers don’t ever recall it being this tight and the frustration is on the buyer’s side,” said Mike Ruzicka, president of the Greater Milwaukee Association of Realtors.

Sales were up 3.7 percent in June, but listings were down 2.9 percent compared to last year, continuing the extremely tight level of inventory, which is at 2.8 months, Ruzicka said.

For the first half of the year, sales in the four-county metro area were up 2.2 percent, while listings were flat with an increase of only 0.1 percent, compared to the first half of 2016.

A recent survey from GMAR found that 77 percent of existing homeowners believe now is a good time to buy a home and 58 percent of them believe homes are selling fast. But many potential sellers are still in a “wait and see” mode.

Ruzicka said after eight years of an econom32 / BizTimes Milwaukee JULY 24, 2017

ic growth cycle, and the current uncertainties in Washington, D.C., many people are hanging on to their largest asset: their home.

“Homeownership is a life decision, and there are numerous quality of life issues that impact an individual’s or family’s decision to purchase a home,” Ruzicka said. “Typically, those factors are questions of finding the right house in a good neighborhood, looking for a good school district, how far a neighborhood is from work, the cost, etc.”

Homeowners who have made it through the Great Recession are in a somewhat comfortable position and are being cautious with the equity in their home, he said.

Reasons for not selling a home, according to the survey, include the fact that many did a little remodeling in the past few years, refinanced their mortgage with rates at historically low levels, or are looking at retiring soon.

Homeowners also are bullish on the future of the market, with 54 percent saying that with prices still increasing, they want to see if their home will be worth more in the future.

Also, in many cases, people are nervous about finding a new house to move into, Ruzicka said.

Sixty percent of respondents said they want to purchase a smaller home or a condominium, which he said is very problematic for the region, where new home construction is still catching

up to pre-recession production.

Milwaukee architect and developer Peter Renner is planning to build a seven-story, 72unit condominium building along the Milwaukee River in the city’s Walker’s Point neighborhood. The $50 million project, called South Water Condominiums, at the corner of East Pittsburgh Avenue and South Water Street, would be the first condominium development in Milwaukee since 2008.

Housing starts in the greater Milwaukee area were up 15 percent in 2016 over the previous year, with more homes built for the first time since 2008, but are still lower than Ruzicka would like to see.

There were 1,618 building permits issued in the state in the first three months of the year, which is the latest data available from the Wisconsin Builders Association. During that time period, there were 23 permits issued in Milwaukee County, 220 in Waukesha County, 42 in Ozaukee County, 51 in Racine County and 70 in Washington County.

A 2016 National Association of Home Builders report found that, on average, local and state regulatory costs total $84,671 per home built, which has slowed the pace of new homebuilding across the state overall.

That, coupled with the cost of land, makes it difficult to build a new house in the area for less than $350,000, according to the Metropolitan Builders Association of Greater Milwaukee.

Despite the low inventory, home buyers are still sticklers for move-in ready homes.

“Buyers don’t want fixer-uppers,” Ruzicka said. “This is a dynamic that has existed for the last 15 to 20 years, so people selling might want to make sure their kitchen is up-to-date; otherwise, the price will take a hit.”

Average sale prices have surpassed their pre-Great Recession peak in the second quarter, by 0.1 percent, with an average sales price of $259,735 at the end of the second quarter for the four-county metropolitan area. Second quarter average sale prices were up 4.7 percent from a year ago, with increases of 9 percent in Waukesha County to $317,570, 5 percent in Milwaukee County to $175,731, 3 percent in Ozaukee County to $316,843, and 1 percent in Washington County to $228,794.

But Ruzicka doesn’t believe buyers will be priced out of homes.

He said pre-recession, buyers were willing to offer up to $10,000 more than asking price to get the home they wanted. Today, buyers are offering more than asking, but only by about $1,500 to $3,000.

Appraisers are also holding down the prices, Ruzicka said.

“Before the recession, none of this existed but today, appraisers and buyers are going to make sure prices are not getting too out of control,” Ruzicka said. “It has been frustrating for a lot of sellers, and has realtors running around like crazy, but overall, I think it is a good thing.” n

Q&A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . from page 20

Concerned with employee retention, employers seek to reduce health care costs

BIZTIMES: Speaking of taxes, President Trump

and Republicans in Congress have also promised major tax reform. Do you think that will get done, and if so, what impact will it have?

ADAMS: “They have certainly hurt their political capital with their failure to get anything done to this point on health care. So I am not optimistic they will get anything done on the tax code. I anticipate six months from now talking about the same thing. The last time we had major tax reform, we had a long bipartisan effort and a president that was willing to work with both parties. We just don’t have that political climate right now, so I’m not optimistic they will get anything done. And again, I don’t think the Republican Party itself is in agreement on who should have the tax cuts and how big they should be. You will have a faction that will say, ‘We should reduce taxes on the wealthiest.’ You will have a faction that say, ‘We should reduce taxes evenly across the board.’ You are going to have them arguing with each other.”

BIZTIMES: Is Trump’s goal to bring manufacturing

jobs back to the United States realistic?

ADAMS: “You can’t change worldwide economic forces. If you could reverse it, that’s going to lead to higher priced goods and consumers are going to have to spend more. You can’t fight that. What you can do is try to adjust. Where you have seen success is to attract and try to fill jobs in a more higher tech manufacturing sector. But that goes back to the human problem you said before.”

BIZTIMES: Big picture for the second half of the

year, where do you think GDP is going to be?

ADAMS: “Continued slow growth. The one bright side is consumer confidence is up and we are a consumer-driven economy. But it’s still sort of fluctuating. It seems the economy will continue to have this slight, steady, slow growth. Wages will kind of stay put, unemployment will stay low. We’ll wait until consumers and workers gain even more confidence and are able to shake the economy up a little bit and get it out of its stagnant state.”

BIZTIMES: So GDP at two-some percent, proba-

bly?

ADAMS: “Oh, yeah. I don’t think anything be-

yond that is expected.”

BIZTIMES: Is the low unemployment rate at this

point a headwind?

ADAMS: “I don’t know if in-and-of-itself it is.

But along with low wages, it’s a signal that something else is going on that is keeping the economy flat. The number in-and-of-itself isn’t a headwind, but what is causing it might be a headwind.” n

By Lauren Anderson, staff writer A DECADE AGO, when Ross Bjella was president of Menomonee Falls-based DDN Pharmaceutical Logistics and overseeing 300 employees, health care costs were a major concern.

Now chief executive officer of a company that analyzes health care costs for employers, Bjella sees those frustrations among employers reaching a fever pitch.

“I think the frustration level has never been higher among employers about the inability to control health care costs,” he said.

While premiums have been rising more gradually in recent years – in 2016, premiums for employer-sponsored health insurance generally held steady from the previous year at $6,435 for single coverage and rose by 3 percent, to $18,142, for family coverage – they have increased significantly over the past decade, according to the Kaiser Family Foundation. Premiums for family coverage have increased 20 percent since 2011 and 58 percent since 2006.

With health care being the second-largest expense for most businesses, those rising figures have long concerned employers. Employees have certainly felt the sizable payroll reduction.

But now, as unemployment reaches a near 20-year low and companies experience more pressure to attract and retain workers, offering attractive benefits packages is all the more necessary. And it’s made the practice of continuing to shift the cost of health care onto employees untenable.

“Trying to keep and attract talent is putting a lot more pressure on the medical spend – that’s where the frustration is,” said Jim Mueller, president and CEO of Waukesha-based health benefits consulting firm Mueller QAAS LLC. “It’s putting pressure on this growing animal that was already out of control, (but) that employers could just push that cost down for the last three decades. It’s not as easy to do that when you’re trying to recruit and retain people.”

In a strong labor market, the current sluggish wage growth is puzzling, but it’s explained at least in part by the increasing burden placed on employees to cover health care costs.

“As (health care costs) have risen, the wages of workers in the U.S. have not risen, partly because their total compensation is being eaten up by health care costs,” said Scott Adams, an economics professor at the University of Wisconsin-Milwaukee. “So employers might be paying for workers, but less in terms of take-home wages because so much is going to health insurance.”

When it comes to employee retention,

Adams said, small companies are at a significant disadvantage to their larger counterparts, which can offer health care at a lower cost.

Bjella, whose Milwaukee-based company, Alithias Inc., provides analytics services aimed at reducing health care costs, said costs have reached an unsustainable point.

“At some point, the house of cards falls over and something breaks,” he said. “I think what’s happened is the insurers are now saying, ‘I can’t trust the system to control these costs. I have to do it through aggressive plan design and making my employees become true consumers of health care.’”

“We’re seeing people adjusting their plan design to give their people options of high-value providers, but they’re only working with high-value providers who can guarantee prices or quality or warranty their work, etc.”

The desire to tamp down costs, Bjella said, means more employers will likely turn to reference-based health pricing, by which they set a cap on the amount they are willing to pay for specific medical services – $30,000 for a knee replacement, for example. Under such a system, it would be incumbent on the employee to make up the difference between the price and the amount his or her employer is willing to pay.

“Historically, employers have said, ‘We can’t do that,’” Bjella said. “Now, they’re saying, ‘Enough. We know what a fair price should be because we know what other providers can provide for this price and that’s all we’re going to pay.’”

The end result, Bjella said, is health care systems harmonizing their prices and ultimately driving down costs.

Mueller likewise predicts that mounting frustrations among employers will soon give way to greater transparency.

“The growing frustration on behalf of employers and employees at the cost of health care … I think, is going to put more pressure on transparency this coming year,” Mueller said.

“Employers are not as complacent as they were in a high unemployment marketplace. They are shopping around and are more proactive.”

Any meaningful health care reform, Adams said, will have to encourage more transparency related to the price and quality of health care.

“The system of health care would need to have the consumers more informed and give them the ability to know the prices and incentives to actually act on that,” he said.

“What we could at least do is try to move in a direction of consumers actually understanding what they’re buying and what it costs and what the quality is.” n biztimes.com / 33

Strategies GENERATION Y

Analyzing the onboarding experience Hands-on approach helps retain millennials in transitioning workforce While we (at Living As A Leader) have a key role in helping leaders learn how to maximize fulfillment and retention of their emerging workforce, we are not immune to some of the same challenges faced by the majority of organizations.

Recently, I asked Alyce Peterson, the newest millennial on our team, to share some things about her onboarding experience at Living As A Leader. You’ll see that some things went well and some things were challenging.

SOME THOUGHTS TO SET THE STAGE “When entering the workforce, I had a limited understanding of the challenges of securing a full-time position and adjusting to a company. I felt with the tireless work I had put in (i.e., juggling multiple jobs to self-fund college, participating in diverse internship experiences), I would not personally experience challenges.

“Many of my peers had been eager to escape the Milwaukee area to move to Chicago, New York and elsewhere upon graduation. I wanted to stay local. Milwaukee is an underrated city for millennials. This community gave me a number of things that I viewed as beneficial (mentorship, friendships, small town feel, the opportunity to be a bigger fish in a small pond). It became home during my undergraduate years at Marquette 34 / BizTimes Milwaukee JULY 24, 2017

University.

“My journey ultimately led me to be introduced to Living As A Leader earlier this year.

Upon receiving a message from a recruiter, I decided to take a look into Living As A Leader. I welcomed this new opportunity and was excited to interview; then excited to receive a job offer.

One of the things I conveyed during the interview is that I love to work. That was, by the way, well received!

“Living As A Leader was offering the opportunity to be pushed out of my comfort zone into an invigorating, multi-faceted position within a rapidly growing company. Some things went well for me during my first 30 days and some things, not so well. The one thing we did all agree on is that I’m a hard worker.

“Thoughts I had as I started my job: »» I expected pros and cons to working in a small business; mostly advantages. »» I was excited to work in a B2B setting, something I had not done before. »» I was thrilled to use skills from my degree in my career (not everyone right out of school has that opportunity).

“Challenges with onboarding at Living As A Leader: »» During the first 30 days, I struggled to gain a comfortable level of knowledge about the company itself and to crack the code on how everyone liked to best communicate. »» I am a high C on the DISC, and details are important to me. I struggled to know what level of involvement I would have in certain things or what my job description would entail in the day-to-day. A lot of things were being handed off to me, and I didn’t necessarily see where the pieces fit. »» The orientation process was clear initially (as everything followed a schedule during my early onboarding). A few weeks in, I was struggling to feel balance in having a multi-faceted role. »» I will admit…I was becoming a bit disillu-

sioned. And others were struggling with my struggle. »» 30 days in, I was less than happy.

“Getting unstuck: »» I was able to sit down with my leader and Aleta for a robust, three-hour conversation.

Fortunately, the uncertainties were resolved in a conversation in which we all were able to discuss (from each of our perspectives) what went well and what went not as well over the course of the first month. In our preparation, we had a lot of agreement. »» We were able to establish expectations and learn more about one another, too, in an open discussion format. I felt listened to.”

A hands-on approach matters. While the initial 30-day onboarding experience was imperfect, it allowed us the opportunity to dig in and diagnose. Alyce’s perspective mattered to us. We met somewhere in the middle, and we’re all very happy at the 90-day mark.

What challenges are you facing during early onboarding? n

ALETA NORRIS Aleta Norris is a co-founding partner of Brookfield-based Living As A Leader, a leadership training, coaching and consulting firm. You may send questions to her at anorris@livingasaleader.com.

Strategies INNOVATION

Innovate or Die When is too much innovation not a good thing?

One of the great brands we have all grown up with is LEGO. In the 1990s, its patents began to expire, so the company reacted by “doubling the number of unique bricks to more than 12,000 and moved into new areas such as computer games, children’s clothing and theme parks.”

This was the good news, according to professors Martin Mocker and Jeanne Ross, who wrote about the transformation in a Harvard Business Review article titled “The problem with product proliferation.”

The bad news is excessive innovation created issues for retailers and their distribution companies. Inventories were flooded with unique bricks. Employees couldn’t navigate shortages from one country to another.

Eventually, LEGO found itself on the brink of bankruptcy.

LEGO addressed the complexity by initiating a major business transformation starting in 2004. During this transformation, it reduced the number of unique bricks to make the LEGO experience easier for customers and employees.

That move paid off in profitability and growth.

There’s an old saying: “Once you discover a hammer, everything looks like a nail.”

Our companies in Wisconsin face similar issues every day.

Teuteberg Inc., an innovative marketing services company, started modestly in the manufacturing of business forms, before the dawn of the Internet. As the Internet rose to prominence, the business pivoted when necessary and now provides digital and direct marketing services.

Instead of trying to be all things to all people, it chose to focus on new and innovative products and services from which its existing customers could benefit. Given its niche in direct marketing, Teuteberg could support companies interested in reaching their target audiences.

And to make its services even simpler, it now leverages data that empowers campaigns with business analytics. With the power of business analytics, Teuteberg is then able to consistently track and evaluate the results of direct mail and digital marketing campaigns, which it can adjust based on the data gathered.

This benefited the company by not only retaining and growing existing customers, but also adding many new customers to its portfolio. The result of a sound innovation.

The professors of the Harvard Business Review study recommend three guidelines to avoid the dark side of innovation.

1. Begin with focusing on vision. The vision is the brand promise of the organization; why does it exist? Whatever that goal or vision, maybe it needs to be clearly understood by every employee and customer who purchases the product or service. Apple Inc. comes to mind. It is a company that offers world-class design and functionality.

All product innovations have to be viewed through the lens of whether it delivers on that vision.

2. Focus on integration and not variety. By this they mean: focus on making the customer and employee experiences easier to understand and reinforce existing products or services. Cross-selling and bundling are obvious options.

The best approach would be to offer services that help customers solve their problems. The average website has a help desk, but how helpful is it, really?

Create cross-functional teams that bring a perspective of employees from different departments of the company; include especially those in customer service. Everyone gets excited about creative enhancements

of products or services; but how is the customer’s experience made less complex and easier to navigate?

3. Selecting the correct criteria. This is where the tire meets the road. You need to be able to list in order of importance the criteria any new product or innovation must meet.

Criteria could include how hard it is for employees to solve customer problems.

Does it make the customer experience more or less complex? What is the time to market and the cost of the innovation? This will help create a comparative measure of various products before you decide what to introduce.

Innovation is exciting, but it has to be disciplined innovation if your company wants to increase revenues and bottom-line profits. You now know the drill; use it! n

DAN STEININGER Dan Steininger is president of BizStarts and president of Steininger & Associates LLC, which helps companies drive new revenues through innovation. He can be reached at Dan@BizStarts.com. biztimes.com / 35

Strategies LEADERSHIP

hit “Ain’t No Mountain High Enough.”

HOW WISCONSIN RANKS

The right balance Smart operations and healthy culture lead to organizational success TEC hosted its annual Inspirational Leadership event recently for more than 600 people.

Keynote speaker Patrick Lencioni, a best-selling author of several books on business management and corporate culture, had much to say about how the organizational health of a company is critical to its success.

BAD PROCESS DESTROYS GOOD PEOPLE Empirical evidence shows companies need, but few have, a healthy culture. And being smart about what you do and how you do it isn’t enough. Lencioni says organizational health is “the most powerful, untapped source of competitive advantage.”

Yet organizational dysfunction is far more common, he adds, and “its insidious effects are unquantifiable but real.”

Culture, generally defined, is how people behave toward each another within a company.

What people say or believe matters far less than what they actually do. In a healthy culture, people aren’t inclined to waste time with internal politics. They understand the priorities. They feel a sense of belonging because management encourages their suggestions and acts on them.

In a healthy culture, Lencioni says, people “throw themselves into their work and are eager to contribute to a mission that is bigger than themselves.”

If they had a theme song, it would be the ’60s 36 / BizTimes Milwaukee JULY 24, 2017

CHANGE THE INTERNAL ENVIRONMENT AND BEHAVIORS FOLLOW

The February 2017 “State of the American Workplace” report by Gallup ranked employee engagement among U.S. workers from 28 to 37 percent.

Wisconsin ranked in the lower middle range at slightly more than 30 percent.

Companies with fewer than 25 employees have an average engagement level of 41 percent.

The level of engagement continues to drop to an average of 29 percent for organizations larger than 5,000 employees.

Organizational transformation, according to Lencioni, is built on the foundation of a cohesive leadership team that can communicate clearly and consistently. He says building a team requires these five factors, in this order: 1. Trust on a deeper level.

2. Conflict that’s open and honest.

3. Commitment to action for the team.

4. Accountability to the team.

5. Results leading to organizational success.

A STRATEGIC PLAN ISN’T THE BE-ALL, END-ALL

CHANGE STARTS AT THE TOP

To be successful in hyper-competitive markets, you must have a deep well of knowledge and expertise to make the smartest strategic decisions. Some even say strategy trumps everything.

But investing time and resources to develop the perfect strategic plan isn’t going to be the best path, particularly because a “perfect” plan doesn’t exist. The speed of change, limited barriers to entry and the accuracy of crucial data for planning give newer companies that are more agile and innovative a better chance to compete.

A well-developed strategic plan is important.

But it takes people who view their work as fulfilling and have an “all in” mindset for the continuing success of the company. After all, who doesn’t want to be on a winning team?

The quality of a business can never exceed the quality of the minds that comprise it, the saying goes.

If employees within a company are team-focused, driven by performance and goal-oriented, it’s because the culture demands it. They’ve discovered the “why” of their organization, not just the “what” and the “how.” That starts with outstanding leaders, because a great culture won’t develop in a vacuum.

Companies can be unstoppable with the right team doing the right things all the time and bringing real value to their customers. n

AN ALIGNED CULTURE AND STRATEGY MATTER MOST Instead of locking onto an inflexible plan, the better approach is to improve your ability to pivot by adjusting to changing patterns of the business environment and discarding things quickly that aren’t working.

Involve people in helping to reinvent the business, especially those closest to the customer. A balance of being operationally smart and culturally healthy is the Holy Grail for a company that wants to be successful.

GEORGE SATULA George Satula is an executive leadership coach working primarily as a TEC chairman, leading three CEO mastermind groups in southeastern Wisconsin. He can be reached at (262) 786-7400.

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BizConnections NONPROFIT

news MACC FUND REACHES $60 MILLION MILESTONE FOR CANCER RESEARCH The Midwest Athletes Against Childhood Cancer Fund recently contributed almost $1.4 million to its three beneficiaries — the Medical College of Wisconsin Cancer Center, Children’s Hospital of Wisconsin and the University of Wisconsin Carbone Cancer Center — bringing its total contributions to date to more than $60 million.

The MACC Fund has contributed a total of $60.6 million to research since its founding in 1976.

The fund was founded by Milwaukee Bucks player Jon

McGlocklin on the night of his retirement.

“I have been asked many times if I could see what the MACC Fund would accomplish over the years and did I realize the impact it would have on the lives of children and their families,” said McGlocklin, who is MACC Fund president. “I could only hope that someday we would have given $60 million in the fight against childhood cancer and blood disorders, helping cure rates to steadily increase for our children. Now we must continue to fight until all the kids live.”

-Lauren Anderson

c alendar Discovery World will host its 12th annual gala at 6 p.m. on July 29.

The annual fundraising event includes interactive presentations by 2017 Summer Camp students, a silent auction, a signature drink and open bar, a meal courtesy of Bartolotta Restaurant Group and an after-dinner party in The Pilot House. For more information, visit discoveryworld.org.

The Down Syndrome Association of Wisconsin will host its 21st Annual Tom Pipines Golf Outing on Aug. 16 at Western Lakes Golf Club in Pewaukee. The event will begin with a shotgun start at 11:30 a.m. Social hour and appetizers will begin at 4:30 p.m. The dinner and program will be held at 5:30 p.m., which non-golfers are welcome to attend. The event will feature silent and live auctions. All funds raised will support DSAW programs and services.

For more information, visit dsaw.org/events/golfouting17.

Children’s Hospital of Wisconsin will host its annual Tee-Up Fore Kids golf outing on Aug. 28 at 11 a.m. at Milwaukee Country Club.

The event raises funds to provide kids and their families with a wide range of care and support. For more information, visit chw.org.

D O N AT I O N R O U N D U P The Zilber Family Foundation awarded 27 grants totaling about $2.2 million to nonprofit organizations aimed at addressing poverty in Milwaukee’s Clarke Square, Layton Boulevard West, Lindsay Heights and other neighborhoods | The family of late Quad/Graphics Inc. founder Harry Quadracci donated $1.2 million to support the $8 million challenge gift from the Herma family to Children’s Hospital of Wisconsin | The City of Milwaukee received a $100,000 grant from the Citi Foundation and Living Cities aimed at increasing the diversity of its vendors and contractors | YWCA Southeast Wisconsin received a $100,000 grant from the Greater Milwaukee Foundation to bolster its racial justice programming

38 / BizTimes Milwaukee JULY 24, 2017

nonprofit

SPOTLIGHT

L A K E VA L L E Y C A M P I N C .

2480 W. Cherry St., Milwaukee (414) 431-4508 | lakevalleycamp.org Facebook: facebook.com/LakeValleyCamp | Instagram: @lakevalleycamp

Year founded: 2003 Mission statement: Our mission is to support the development of youth from underserved neighborhoods to teach, lead and inspire others in the community. Our vision is that everyone understands their potential, believes in their purpose, and contributes to their community in positive ways.

Primary focus: LVC works tirelessly to ensure that our young people have access to purpose-driven, experiencebased programs, facilitated by highly-skilled professionals who are firmly invested in their positive development and wellbeing. We currently offer summer day camps in the Milwaukee area, resident camp at our beautiful 650-acre facility in the wooded rolling hills of western Wisconsin, trip-based adventure education in the summer and school year in natural locations all across the state, and we offer both community- and schoolbased, school year programming to our participants ages 7 to 18 on a wide variety of topics and themes.

Employees at this location: 12 to 80, depending on the season.

Key donors: Kellogg Family Foundation

Executive leadership: Dan Schiller, executive director Board directors: • Bill Kellogg • Peter Sommerhauser Advisory board: • Stephanie Maney • Dr. Will Massey • Sarah Milnar McLaughlin • Brett Heaton Juarez Is your organization actively seeking board members for the upcoming term? Yes What roles are you looking to fill?

Advisory board Ways the business community can help your nonprofit: Inkind donations and financial contributions to support family events, programming or community building initiatives. New partners who want to provide resources or guidance on specific areas of youth interest (STEM, outdoor adventure, maker programming, and individual and team sports).

Key fundraising events: Lake Valley Camp’s events are fully focused on bringing our families and participants together as a community. Interested supporters are welcome to see a program in action or join a fall celebration, winter potluck or spring field day.

PERSONNEL FILE ACCOUNTING

ENGINEERING

INSURANCE

MARKETING

Vrakas S.C., Brookfield

Ring & DuChateau Consulting Engineers, Brookfield

Valley Insurance Associates, Hartland

Laughlin Constable, Milwaukee

Valley Insurance Associates hired Mike Lappin as partner and president. Since 1999, Lappin has been employed with Motorists Insurance Group, most recently serving as president of Wilson Mutual since 2013.

Laughlin Constable appointed Kristine Naidl managing director of public relations for the advertising and integrated communications agency. Naidl will lead public relations strategy for the agency and its clients, as well as oversee the firm’s growing team of PR professionals.

Vrakas S.C. hired Christina Gerharz as an audit staff accountant. Her primary responsibilities will be performing audits and other assurance engagements for closely-held businesses.

BANKING & FINANCE

Citizens Bank, Mukwonago Citizens Bank hired Steve Radulovich as vice president – business banker.

Radulovich will work out of the company’s New Berlin office. He has 14 years of commercial, business banking and lending experience.

BUSINESS DEVELOPMENT

Association Acumen LLC, Menomonee Falls

Smith

Ragoschke

LaRosh

Ring & DuChateau added Dave Ragoschke to its commissioning team and Jason LaRosh as a project manager for its HVAC systems team.

HEALTH CARE

Medical College of Wisconsin, Wauwatosa Jonathan Marchant joined the Medical College of Wisconsin as chair of the Department of Cell Biology, Neurobiology and Anatomy. In addition, Marchant was awarded the Marcus Professorship of Human and Molecular Genetics. He has been a faculty member at the University of Minnesota Medical School since 2002 and currently serves as a tenured professor in the Department of Pharmacology and Stem Cell Institute there.

Elliott

Betsy Smith has been named the new president of Association Acumen LLC. Smith succeeds Gail Bast, who will remain as chief executive officer and owner. Bill Elliott has also been promoted, to vice president of operations. Elliott joined Acumen in 2011.

DESIGN

Corporate Design Interiors, Waukesha Corporate Design Interiors added Carley Semmelmann as an interior designer.

Semmelman joins CDI with an associate’s degree in interior design from Waukesha County Technical College.

HOSPITALITY

Marcus Hotels and Resorts, Milwaukee

LEGAL

Godfrey & Kahn, Milwaukee Andrew Spillane joined Godfrey & Kahn S.C. as a member of the Banking & Financial Institutions practice group. Prior to joining Godfrey & Kahn, Spillane was associate general counsel at a Milwaukee-area bank.

LEGAL

Meissner Tierney Fisher & Nichols S.C., Milwaukee The law firm of Meissner Tierney Fisher & Nichols S.C added Adam Cain as IT manager & systems administrator. Cain comes to Meissner Tierney with nearly 20 years of experience in the IT industry.

MANUFACTURING

Doig Corp., Cedarburg

Sebestyen

Swasey

Marcus Hotels & Resorts named Joe Sebestyen area vice president of operations. He has more than 20 years of experience.

Price-Topp Additionally, Mike Swasey was promoted to senior vice president of operations and Linda Price-Topp was promoted to vice president of sales.

Mitchell

Heikkila

Harrison Mitchell joined Doig Corp. as account manager/sales engineer for the Racine, Kenosha and Milwaukee County markets.

Chris Heikkila has also joined the company’s sales team. Heikkila has more than 20 years of experience in the industrial equipment and processing industries.

NONPROFIT & VOLUNTEER

American Heart Association, Milwaukee Ivor Benjamin, professor of medicine and director of the Cardiovascular Center at Froedtert Hospital and the Medical College of Wisconsin, has been named president-elect of the American Heart Association’s board of directors.

PROFESSIONAL SERVICES

Central 1 Security, Waukesha Central 1 Security hired Maureen Mecham as an operations expert.

Mecham has 18 years of industry experience and will play an integral role in all day-to-day operations at Central 1 Security.

SENIOR LIVING

Newcastle Place, Mequon Newcastle Place, a full-service senior living community, has hired Laura Jones as a clinical liaison in order to strengthen the post-acute care strategy for the Highlands Health Center and Hospital Partners.

Submit new hire and promotion announcements to: www.biztimes.com/personnel

biztimes.com / 39

BizConnections VOLUME 23, NUMBER 9 | JULY 24, 2017

GLANCE AT YESTERYEAR

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

SALES & MARKETING

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

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

Honest Abe

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

COMMENTARY

Housing initiatives will boost central city TWO UNDER-THE-RADAR announcements recently brought much-needed good news to some of Milwaukee’s impoverished neighborhoods.

Milwaukee Habitat for Humanity announced plans to expand its neighborhood revitalization efforts in the Midtown neighborhood, a $9 million commitment over the next three years.

Since 2013, Habitat had focused its work primarily on the Washington Park neighborhood.

Now, it is moving east into Midtown, targeting its efforts on the area between West North and West Lisbon avenues, and North 25th and North 30th streets.

“It’s an area that has a lot of vacant lots owned by the city, it has a number of blighted properties and foreclosed properties, but it also has a core group of residents who are desirous of seeing the same kind of revitalization that’s happened (in Washington Park),” said Brian Sonderman, executive director of Milwaukee Habitat.

40 / BizTimes Milwaukee JULY 24, 2017

After the organization completes its work in Midtown, Habitat will shift its focus to the Harambee neighborhood with what Sonderman expects to be a $16 million to $20 million investment.

I’ve done some work with Habitat on a few new home projects through my church.

It’s a great organization that offers a hand up, not a handout. The modest homes are sold for no profit and financed with an affordable mortgage to people who meet income requirements and pass a background check.

The homeowners also have to put in hundreds of hours of “sweat equity” working on Habitat homes. Habitat carefully selects its homeowners, choosing people who need some help but will be responsible residents that will help improve the neighborhood.

Almost anyone can support Habitat, either with a donation or volunteer labor. You don’t need to have any construction skills, just the ability to follow instructions and work hard.

My wife can attest that my handyman skills are minimal at best, but I had no problem working on Habitat homes.

More good news for Harambee: PyraMax Bank announced recently that it has committed $1 million to mortgages in that neighborhood.

Efforts to support homeownership in low-in-

ACCOUNT EXECUTIVE Molly Lawrence molly.lawrence@biztimes.com ACCOUNT EXECUTIVE David Pinkus david.pinkus@biztimes.com ACCOUNT EXECUTIVE Maggie Pinnt maggie.pinnt@biztimes.com ACCOUNT EXECUTIVE Christie Ubl christie.ubl@biztimes.com SALES INTERN Amanda Bruening amanda.bruening@biztimes.com

ADMINISTRATION

INTERN REPORTER Maredithe Meyer maredithe.meyer@biztimes.com

This photo, taken by W.D. Kline in 1934, shows the dedication of a statue of Abraham Lincoln in Milwaukee. The 10’6” bronze statue, sculpted by Gaetano Cecere, now stands on the west side of the War Memorial Center on the lakefront. Milwaukee-area school children collected pennies to commission the sculpture.

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

ADMINISTRATIVE COORDINATOR Sue Herzog sue.herzog@biztimes.com MARKETING & EVENTS INTERN Eileen Demet eileen.demet@biztimes.com

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

Independent & Locally Owned

ART DIRECTOR Shelly Tabor shelly.tabor@biztimes.com

— Founded 1995 —

come neighborhoods can make a difference.

Homeowners have a financial stake in their property, and therefore the neighborhood, which motivates them to work with their neighbors to make it a better place. Violent crime has gone down 48 percent on the Washington Park blocks where Habitat has completed home projects, Sonderman said.

Thrivent Financial, Wells Fargo and Komatsu Mining Corp. have been the main corporate partners in Habitat’s Washington Park efforts.

PyraMax is partnering with ACTS Housing, MGIC, Take Root Milwaukee and Riverworks for its Harambee program.

Hopefully, more businesses and nonprofit organizations decide to work together on similar efforts in Milwaukee.

“We frankly need more lenders to step up and do what PyraMax has done,” Mayor Tom Barrett said.

ANDREW WEILAND EDITOR

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

AROUND TOWN Footlights Performing Arts Awards Artists in the Milwaukee area were recently recognized for their work at the first-ever Footlights Performing Arts Awards at the Quadracci Powerhouse Theater.

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1.

KATIE JOACHIM and TINA STERNITZKY of United Performing Arts Fund.

2.

COURTNEY NECKAR and SHERRY BRISCH of Footlights.

3.

JILLIAN and JUSTIN OLSSON of Footlights.

4.

Footlights award nominee NICHOLAS CALLAN HAUBNER and nominee JERRY KRAJEWSKI with their family members MICHAEL HAUBNER and JONELLE KRAJEWSKI .

5.

DI’MONTE HENNING , Footlights award nominee and executive director of Lights, Camera, Soul, pictured with his family, TRINAE WILLIAMS, MELISSA VERDIN and BRIAN VERDIN. Photos by Lauren Anderson

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Summerfest networking MBBI, WTA and CFA held a joint networking event on the Lake Deck at Summerfest.

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6.

JONATHAN WOLFE of Stream Capital Partners and LEE DAVIS of Marathon Savings Bank.

7.

KEVIN FLAHERTY of Associated Bank and CRAIG KUCIK of Gordon Brothers.

8.

BENJAMIN WOODWARD of Byline Bank, GENE ARENSON of HyperAMS and DAVID SLAVIK of US Bank.

9.

PHILIP OSTROSKI of Tri City National Bank and STEVE GLASER of Glaser Business Law LLC.

10. SUE TROST of Marquette University and DAN TROST of Badger Corp.

11. DENISE KRANTZ of Northwest Community Hospital, JIM VARGO of Bibby Financial Services, JOHN KEMP of Wolverine Partners and PAUL KRANTZ of Presidential Financial.

12. TIM SERRITELLA of Loeb Term Solutions, ERIC FOUGHT of First Business Bank and ANDREW DISCH of Summit Financial Resources.

Photos by Molly Dill

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12 biztimes.com / 41

BizConnections

KAT SCHLEICHER PHOTOGRAPHY

the LASTWORD

T I M OT H Y PA P PA S Want to keep your talent? Tell them how to leave Timothy Pappas has more than 20 years of experience in executive search and coaching. He specializes in hiring to the culture to avoid turnover. One key to

|

PR I N C I PA L

Pappas DeLaney LLC | Hales Corners pappasdelaney.com Industry: Executive search, coaching and development Employees: 10

retention, he says, is making it clear to employees how to leave the company.

“COMPLETE THIS SENTENCE: IF A COMPANY IS GOING TO FIRE YOU, IT SHOULD NEVER BE .

“People quit every day, and sometimes in awful ways because they have never been told how to do it properly. I send a letter to all employees with the following information: ‘Although it may seem odd, our first order of business is to tell you how to leave the organization in a way you will be welcomed back should 42 / BizTimes Milwaukee JULY 24, 2017

you ever need to rebound: 1. If you quit out of the blue, you will never be welcomed back. If you are not performing to job expectations, you will know it and will be given an opportunity to fix it—we expect the same consideration.

2. If you come in with an offer expecting us to match it, we will not. If you speak up about what is wrong, we may help you, if possible, before it becomes critical.

3. Prior to quitting, tell us what is wrong

with your current situation and give us a chance to fix it. If we can’t, we will help you out of the organization gently and welcome you back as a prodigal son/ daughter should you elect to return. We mean this…no, really!’

“These ‘instructions’ are reinforced several times per year. Teach your talent to communicate—you may be pleasantly surprised when they actually do give you a chance to fix something!” n

INTRODUCES:

A guide to

STUFF

A guide to

STUFF

made and built in southeastern Wisconsin.

made and built in southeastern Wisconsin.

A new publication aimed at changing the image of careers in manufacturing and the building & construction trades in SE Wisconsin.

Be a part of this unique marketing opportunity that showcases SE Wisconsin’s manufacturing and building & construction firms, highlighting the cool stuff you make and build. Communicate the appeal of a career in manufacturing or construction to tomorrow’s workforce.

Publication Date: September 4, 2017 Reservation Deadline: July 26, 2017

To learn more, contact Linda Crawford 414.336.7112 | linda.crawford@biztimes.com

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