BizTimes Milwaukee | January 23, 2017 by BizTimes Media

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ECONOMIC TRENDS 2017

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January 23 - February 5, 2017 HIGHLIGHT S

S P E C I A L R E P O R T:

E CONOMIC TR E ND S 2017

This comprehensive report includes a macroeconomic outlook interview with economist Michael Knetter, a look at how local stocks performed last year, and outlook reports for manufacturing, real estate, health care, banking, staffing, technology and retail.

Now 4 Marcus Corp. could move HQ to Park East corridor development.

Coffee Break

A conversation with Jim Mueller, president of Mueller QAAS.

Political Beat

State residents split over gas tax hike.

Made in Milwaukee

CJ’s Premium Spices mixes up new formula.

The Good Life

Kiteboarding on Lake Michigan.

S TR ATE GIE S

The Trump factor

BIZ CONNECTIONS

Support Susan Wehrley 37 Sales Christine McMahon 38 Coaching Jo Gorissen 39

COV E R S T ORY Personnel File SBA Loans Glance at Yesteryear BizTimes Around Town The Last Word

Business leaders hopeful he’ll boost economy

ON THE COVER: President Donald Trump. — Gino Santa Maria / Shutterstock Inc.

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Founded in 1995, BizTimes Milwaukee provides news and operational insights for CEOs, presidents, owners and other top level executives at companies in southeastern Wisconsin (Milwaukee, Waukesha, Ozaukee, Washington, Racine, Kenosha, Walworth and Sheboygan counties). Subscription Customer Service: BizTimes Milwaukee, 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120, USA, Phone (414) 277-8181, Fax (414) 277-8191, circulation@biztimes.com, www.biztimes.com

BizTimes Milwaukee (ISSN 1095-936X & USPS # 017813) Volume 22, Number 22, January 23 - February 5, 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 $42.00. Single copy price is $3.25. Back issues are $5.00 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.

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Marcus Corp. could move HQ to Park East corridor development

he Marcus Corp. says it might move its headquarters to the mixed-use development it is planning northwest of Water and Knapp streets in downtown Milwaukee’s Park East corridor. Katie Falvey, vice president of real estate for the Marcus Corp., said plans for the project, called Edison Place, are still taking shape, but Marcus Corp. might move its headquarters to the site. The Marcus Corp. currently leases about 45,000 square feet of office space at the 100 East building at 100 E. Wisconsin Ave. downtown. Its lease there expires in 2019. Milwaukee law firm Michael Best & Friedrich also plans to move out of the 100 East office building and into the $137 million BMO Harris Financial Center when that 25-story office tower opens in downtown Milwaukee in late 2019. The $119 million Edison Place project would include an eight-screen, 56,400-square-foot movie theater complex at the southern end of the property, 162,000 square feet of residential space and 113,800 square feet of office space, according to documents made public recently by Milwaukee County officials. Marcus Corp. hopes to begin construction on the Edison Place project this fall, according to documents it submitted to the county in June.

The 20-story Edison Place project also would include two restaurants that are each approximately 11,000 square feet, a café that is 4,500 square feet and a health club along the Milwaukee River, according to the documents from the county. Plans show the project will create a projected $111.3 million in incremental tax base once fully built out. Approximately 387 to 435 construction jobs will also be supported during the 20-month construction. Anticipated completion is the fourth quarter of 2019. The development would be built on a 1.24-acre parcel of land that Milwaukee-based Marcus Corp. purchased in November 2015 for $3.1 million at 13011357 N. Edison St., along the Milwaukee River and near the northwest corner of Knapp and Water streets. Marcus Corp. is working with Baltimore-based architect inPlace Design; Providence, Rhode Island-based construction firm Gilbane Building Co. and Milwaukee-based engineering firm Kapur & Associates Inc. on the Edison Place project. Milwaukee County officials said recently that they have selected Marcus Corp.’s bid for a 16,000-square-foot county-owned property at the hard northwest corner of Water and Knapp. The site sits between the intersection and

the site purchased by Marcus Corp. in 2015. The countyowned site will be part of the Edison Place project, but it will be used as a public plaza adjacent to the proposed building. The Marcus Corp. and Brookfield-based Hammes Co. each bid on the county-owned site, Marcus Corp. might move its headquarters to its Edison Place project. known as Block 12, the last remaining county-owned parcel It is unclear if Marcus will have to in the Park East corridor. In November, remove the contaminants since the land Jon Hammes said both companies had will be used as green space. agreed to use the land as green space. Abele praised the sale of the last reHammes is relocating his company to maining vacant Park East parcel, to the the northeast corner of Knapp and Water Marcus Corp. Milwaukee County owned Streets in a new five-story office building 16 acres of land in the Park East corrithe company will construct at the site. dor and Abele made it one of his goals The Marcus Corp. has a 12-month to complete development of the corridor option to purchase the county site for when he took office in 2011. $50,000. The option can be extended “This is a great project with great new for up to 24 months. The site has an ap- and familiar corporate tenants here,” praised value of $640,000. The land has Abele said. “It’s something to get excited about $500,000 of environmental reme- about. Two years ago, this scenario (to diation work that needs to be done before develop the entire Park East) was crazy. development can take place, said Milwau- But here we are.” kee County Executive Chris Abele. ——Corrinne Hess

SOCI AL M E D I A S T R AT E GI ES

Maximize your social media strategy in 2017 Now that it’s the new year, you’re hopefully executing the strategies you’ve laid out in your 2017 social media plan. If not, you’ve still got a little time to develop or add to those strategies to help smash your social media goals for the year. To ensure that you get the biggest impact possible, you can’t afford to neglect the following:

Quality of your content Perhaps it goes without saying, but it bears repeating: The quality of your social content is essential. Don’t sacrifice quality to rush a post. Before publishing, ask yourself if the content gives the absolute best first impression of your business or product. If not, the potential for missed customer connections skyrockets. 4

B i zT i m e s M i l w a u k e e

Video In 2016, we saw a huge influx of branded videos and live broadcasting go center stage. And it’s not going away anytime soon. In fact, Facebook, Instagram, Snapchat and Twitter have made it easier for brands to come to life, go live and be seen in 360 degrees. Video content is a home run if done right. It’s versatile on multiple platforms (social, traditional and digital advertising), has a shelf-life, and creates bountiful engagement opportunities.

Platform prioritization Streamlined budgets require you to prioritize your efforts and activity. The number one rule of thumb: You don’t need to be everywhere at once. It’s better to be active on

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the channels where your target audience is and master those platforms rather than spread yourself thin trying to get posts published on all the channels you think you need to be on.

Paid advertising Frequent algorithm changes, competitive landscapes and the vying for customer attention requires another layer be added to your strategy – social advertising. As platforms like Facebook and Instagram continue to reduce organic brand content visibility, it will be even more important to build and strengthen relationships beyond your current community bases.

——Katie Klein-Murphy is social media marketing manager at Boelter + Lincoln in Milwaukee.

leading edge COFF E E B R E A K

POLITIC AL BEAT

State residents split over gas tax hike BY WISPOLITICS.COM

What was the smartest thing your company did in the past year?

employees and their dependents.”

“Focused on collaborating with employers, employees, providers and insurers on a higher quality, accessible and affordable health care marketplace in southeast Wisconsin.”

What’s new at your company? “We are growing our client roster and our workforce. Last year, we saw our number of clients grow by more than 60 percent and we recently hired our fifth employee in anticipation of continued growth.”

Do you plan to hire any additional staff or make any significant capital investments in your company in the next year?

Do you have a business mantra? “Yes; it’s in our name. QAAS stands for Quality, Affordability, Accessibility and Strategy. Our goal is to bring all four to the southeast Wisconsin employer community.”

From a business standpoint, who do you look up to? “Historically, Frank F. Haack. Recently, Mark Zuckerberg.”

What was the best advice you ever received? “Surround yourself with bright people with a variety of skillsets who are committed to a common set of goals.”

“We are always looking at significant investments in people and acquisitions.”

What’s the funniest thing that ever happened to you in your career?

What will be your company’s main challenges in the next year? “To help employers understand that their health plan administrators have a fiduciary responsibility to act prudently and solely in the interest of plan participants and their beneficiaries, and that brokers may face a conflict of interest if they are paid by the insurance companies.”

What’s the hottest trend for your industry? “We are seeing increased interest in ‘at risk’ provider contracts, in which health care providers take financial risk for the care of an employer’s covered

Wisconsin residents are almost evenly split on whether the state should increase the gas tax to raise money for the transportation fund, according to a new poll commissioned by Wisconsin Manufacturers & Commerce. The poll of 506 Wisconsin voters, conducted in Dec. 12-14 by the Washington, D.C.-based Tarrance Group, shows 49 percent of respondents favor a gas tax increase, while 48 percent of respondents oppose it. WMC President Kurt Bauer appeared on "UpFront with Mike Gousha," on WISN-TV Channel 12, a media partner of BizTimes Milwaukee, to discuss the poll and say the state's largest business group supports a gas tax hike of about 5 cents a gallon. Gov. Scott Walker has repeatedly said he will not raise the gas tax or registration fees to fund transportation unless an offsetting tax cut can be made elsewhere. "We see the need," Bauer said of a gas tax hike. "That's important for us. If you look at transportation, it's important to service our three major economic sectors, manufacturing, agriculture and tourism, so we believe that's an important investment." WMC's poll also asked about taxes, education and health care costs. Bauer said 58 percent of the respondents said their health care costs have gone up. "We have to address this," Bauer said. "This is something that has a broader impact, because it makes us uncompetitive internationally, because it's another cost of doing business, and we're much higher than the rest of the world."

“Early in my career, shortly after I joined Frank F. Haack & Associates as president of the Employee Benefit Group, Bill Haack and I had a big appointment in downtown Milwaukee. Bill had a new car, so he drove. After he parked, I opened the door a few inches to see if traffic was coming and a bus hit the door. I felt ill then, but it’s funny now!”

Jim Mueller President Mueller QAAS N19 W24400 Riverwood Drive, Waukesha www.myqaas.com Industry: Insurance consulting Number of employees: 5 Family: Married 36 years to wife, Mary Jo; mother to children Susan, Paul and Jim. First grandchild was born last year, with one more on the way. w w w.biztimes.com

WisPolitics.com is a media partner of BizTimes Milwaukee. "UpFront with Mike Gousha," is produced in partnership with WisPolitics.com

What do you like to do in your free time?

BY TH E NU MBERS

“Family and friends are a big part of my life outside work. I enjoy supporting UWM and Marquette basketball and cheering on the Bucks and Packers. Investing and some golf and travel are also fun.” J a nua r y 2 3 - F ebr ua r y 5, 2 017

Gov. Scott Walker says his budget will include a request for a $6 million expansion and renovation of the Cream Puff Pavilion at State Fair Park in West Allis. The funds will come from private gifts.

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Economic Trends 2017

Alan Swan and his brother Chad measure spices at their Oconomowoc production facility.

CJ’s Premium Spices mixes up new formula Alan Swan spent more than 20 years as a professional pilot, flying celebrities and entrepreneurs and often wondering what it was that allowed them to take a simple idea and turn it into a business. He also figured that in the right circumstances, he could make a go of it in business, too. When a friend of Swan’s began taking a potato salad seasoning mix to farmers markets, Swan saw an opportunity to do it on a bigger scale. The idea for the flagship CJ’s Premium Spices product is straightforward. A package of spices with proportions perfectly measured out to easily make a two-and-a-half pound batch of potato salad. Just mix it with mayonnaise and vinegar and fold into cooked and cooled potatoes. The mix comes with no preservatives and no additives. It is organic and gluten-free. The goal is to provide a consistent mix that combines the right taste, texture and visual elements, something Swan says doesn’t exist in other products produced for a mass market.

ARTHUR THOMAS (414) 336-7123 | Twitter: @arthur8823 arthur.thomas@biztimes.com

“It gets a sludge factor to it,” he said. “They put in their ingredients, they pulverize it, then they start sticking to each other, so they have to add chemicals to it to keep it free flowing, and they just keep adding stuff to it, whereas we’re just straight ingredients.” The last point is one Swan takes pride in. “We’re essentially taking 12 spice shakers out of the pantry and putting it into a packet,” he said. Beyond potato salad, Swan has also developed dill and onion dip mixes and plans to expand to other areas, like taco seasoning. The other thing that makes CJ’s unique is its production space, an FDA-certified kitchen in the basement of the former home of his current business partner. Swan said those inspecting it were a bit leery when they first walked in, but

CJ’s Premium Spices Oconomowoc Industry: Seasoning and spices Employees: 10 www.cjspremiumspices.com were surprised when they saw how professionally the kitchen had been built out. “They walked in there and (it was so clean) you could do surgeries in there,” he said. As a pilot, Swan realized FAA regulations “are written exactly like the food regulations,” making it easier for him to read them and get up to speed. The company was formed as an LLC in April 2014 and the kitchen was certified organic by July of that year. Over time, Swan said he realized doing business with his friend wasn’t a good fit, so Swan and his wife bought the friend out. Now, Swan is taking a leave from his job as a pilot and making a go of it with his own business. His product has been picked up in stores like Sendik’s and he’s starting to get some wider distribution statewide. He’s also picked up some food service accounts, luxury suites in stadiums and he’s even received interest from the military. Being in grocery stores helps Swan demonstrate acceptance by the market. He has a team of nine part-time employees who help with product demos, which helps drive sales at the stores. Production, at the moment, is largely handled by the Swans, along with their friends and family. Depending on demand and the number of people involved, Swan said he can ramp production up to more than 1,000 packets per day. While getting into grocery stores is a positive step, Swan is planning to increasingly focus on restaurants and food service applications. The reality is the labor cost and production time is about the same, whether he’s making the smaller packet for a 2.5-pound batch or a larger bag capable of producing 31 pounds of potato salad. “It’s very tedious. It’s a small profit margin,” Swan said of the smaller bags. Swan figures he’ll be able to scale up production as the business continues to grow. The effort has been entirely self-funded to this point, but Swan said at some point he’ll turn to financing to move to a larger facility.

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BizTimes Media will host the 2017 Northern Trust Economic Trends Breakfast on Thursday, Jan. 26, from 7:30 to 9:30 a.m. at the Italian Conference Center, 631 E. Chicago St. in Milwaukee. A panel of industry experts will discuss how a Trump presidency could shape the economy and what kind of policy changes lie ahead for southeastern Wisconsin businesses. The panel will include: Michael Knetter, economist and president and CEO of the University of Wisconsin Foundation; Cynthia LaConte, CEO and president of The Dohmen Co.; W. Kent Lorenz, chairman and CEO of Acieta and Debbie Seeger, senior vice president and cofounder of Patina Solutions. Cost is $60 or $600 for a table of 10. For more information or to register, visit www.biztimes.com/trends.

For a complete listing of all area events, visit the event section of our website.

www.biztimes.com/events

BOOK REVIEW

‘The Lost Time Accidents’ Beginning in Vienna in the early 20th century, John Wray takes us from salons buzzing with rumors about Einstein’s radical new theory to World War II death camps in his latest novel, “The Lost Time Accidents.” Haunted by a failed love affair and dark family secrets, Waldemar 'Waldy' Tolliver wakes to discover he has been exiled and flown through time. From the golden age of post-war to pulp science fiction, Waldy tries desperately to find his way back while dealing with his own personal demons. Part adventure, part drama, part scientific mystery, “The Lost Time Accidents" is an epic saga set against some of the greatest upheavals of the 20th century. “The Lost Time Accidents” is available at www.800CEORead.com for $21.60.

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THE GOOD LIFE

Eve Hall tapped to lead Milwaukee Urban League

Kiteboarding on Lake Michigan Around six years ago, Erika Lee, a local portrait, family and wedding photographer, was going for a run along the lakefront. She noticed, like she had a few times before, a group of people on wakeboards sliding across the water holding onto bars attached to colorful kites. “I just thought, ‘That looks fun,’” she said. “I was always trying to get someone to do it with me and no one really would. I just started Googling and found Kiteboard Milwaukee. And they gave lessons.” Kiteboarding is a sport in which people stand on a wakeboard or a surf board, or, depending on the season, a snowboard, while holding onto a large, u-shaped power kite and use wind to propel them over water or snow. “People are surprised when I tell them that we do it here on the Great Lakes,” she said. “It’s fun and it’s thrilling, but it’s also very calming, if that makes any sense. You’re out on the water and it’s kind of your own thing. It’s pretty, it’s peaceful, and it’s also fun and exciting. You can do a lot with it. There’s a lot of different aspects to it … some people jump and do aerial tricks.” Though Erika said she doesn’t do many tricks, her

Dr. Eve Hall, president and chief executive officer of the African American Chamber of Commerce of Wisconsin, has been tapped to lead the Milwaukee Urban League. Hall will succeed Ralph Hollmon, who has led the Urban League since 2002 and will retire this year. Hall, the 2015 BizTimes Woman Executive of the Hall Year, has years of experience working in education, government and nonprofit organizations. A native of Milwaukee, she earned a bachelor’s degree in educational psychology from Florida A&M University before moving back to earn a master’s degree in administrative leadership from the University of Wisconsin-Milwaukee and a Ph.D. in educational leadership from Cardinal Stritch University. Her previous roles include executive director of the Thurgood Marshall College Fund, vice president of public affairs at Family Service of Milwaukee, director of Milwaukee Public Schools’ School to Work program and director of former Gov. Tommy Thompson's Milwaukee office. Hall was appointed to serve on the University of Wisconsin System Board of Regents by Gov. Scott Walker in 2014 and also serves on Walker’s task force on minority unemployment. The African American Chamber of Commerce of Wisconsin said it will begin searching for Hall’s replacement immediately.

——Ben Stanley

Erika Lee kiteboarding in Puerto Rico. hobby has taken her places. She and her former kiteboard instructor — the two are now engaged — spent six months teaching kiteboarding in Puerto Rico during the winter of 2012-’13. “It’s not the easiest to learn here in Milwaukee,” she said. “The wind isn’t consistent. The water is cold. You need wetsuits. But if you stick with it, it’s just a lot of fun.”

——Ben Stanley

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Leah Melichar EPIC Creative 3014 E. Progress Drive, West Bend Age: 23 Education: Bachelor’s in marketing from Concordia University-Wisconsin Current position: Project manager Previous position: Account manager at Guarantee Digital in Hartland

»» What is your next career goal? “I hope to be at EPIC for a very long time. I really love it here and I’ve actually been interested in EPIC for a couple years, so I was really excited to be hired on. I would eventually like to become a senior account manager here. Of course, that’s many years down the road.” »» How did you target Epic as a company you wanted to work for? “I actually worked in the area before. I worked at a nearby company called Delta Defense in West Bend. I came to know EPIC through the art director at Delta and he knew I was interested in the agency atmosphere. I was really surprised to find an agency in West Bend—most of them are in the Third Ward—so that really interested me. The company culture they have was very aligned with who I am.”

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3600@Villard Milwaukee-based Index Development Group is planning 3600@Villard, a four-story mixed-use building on five lots at the corner of North 37th Street and Villard Avenue. The $9.7 million project includes 2,000 square feet of commercial space on the ground floor and an attached one-story 26 space parking structure. The building will contain up to 43 one-, two- and three-bedroom apartments.

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Re: Walker’s plans to grow state’s workforce “Wisconsin’s workforce shortage wasn’t created overnight and it won’t be quickly solved, either. Putting a lot of ideas into play now may pay dividends later.” - Tom Still, Wisconsin Technology Council

Re: Medicaid bloc grants “The state’s 40 percent share of the $8 billion in Wisconsin Medicaid expenditures is already stressing Walker’s state budgets. If the shift of control of the program isn’t handled well, Medicaid could be a budget killer.” - John Torinus, Serigraph Inc.

How will the U.S. economy perform in 2017?

Re: Natural resources policy in Wisconsin

Friends of Next Door recently celebrated the 10th anniversary of the agency’s Educare Milwaukee program.

“We will continue to press for legislation that runs afoul of the dogmatic beliefs held by many so-called environmentalists. We intend to further streamline some rules and regulations and repeal those that don’t make sense. It’s a matter of life and death for our communities.” - State Sen. Tom Tiffany, R-Hazelhurst

It will continue to grow: It will be flat:

65% 19%

It will fall into a recession:

16%

Building Things That Matter It’s our business to help people with the medical devices and services we create; but it’s our compassion that drives us to believe in community service. GE Healthcare employees contribute thousands of volunteer hours every year in southeastern Wisconsin. We’re focused on making personal connections and delivering a brighter outlook for future generations through our involvement in education, health, community building and innovation.

We build things that matter, including a stronger community. gehealthcare.com Building_Things_That_Matter_Ad_9.5625x5.5_Color.indd 1

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10/12/16 4:27 PM

innovations Doobert.com Pewaukee Innovation: Online animal rescue logistics www.doobert.com

Chris Roy began developing Doobert after he found there weren’t any services to coordinate animal rescue transfers. He still helps fly animals to rescue organizations, combining two of his passions.

Doobert builds animal rescue network online

or Chris Roy, Doobert.com developed out of two of his passions, flying and animal rescue. After a friend asked him to fly two rescue dogs to Kentucky, Roy found himself developing a reputation as someone who could help in the transport of rescue animals. With requests coming in for him to fly animals nearly every day of the week, Roy figured there must be a better system for coordinating the requests and animal transports. ARTHUR THOMAS (414) 336-7123 arthur.thomas@biztimes.com Twitter: @arthur8823

“I thought there was an app for that, but there wasn’t,” he said. Roy’s response was to begin building Doobert, a web-based platform that helps coordinate the transportation of rescue animals across the United States. It has now developed into a network of 13,000 volunteers that averages 40 to 50 transports every week. The logistics of animal rescue in the U.S. are such that the southern part of the country experiences a level of overpopu10

lation not seen in the northern states. This means it’s not uncommon for an animal rescued in say, Alabama, to find its way to Milwaukee. “They have to get here somehow,” Roy said. “And there’s not a UPS for rescued animals.” There are actually commercial transports for animals, but that adds costs many rescue organizations can’t afford. A common approach instead is to use a rescue relay, with volunteers each handling a leg of the journey. “The concept of doing smaller loads really helps the smaller rescues more than it does the larger shelters,” said Lynn Olenik, executive director of the Humane Animal Welfare Society in Waukesha. She said the approach to animal rescues has changed over the years to the point where more people want to be involved. She sees Doobert as a way to connect pet lovers with local rescues and shelters. “It’s about volunteering, commitment and helping out,” she said. “People are really interested and really interested in being involved.” Roy said each volunteer will typically handle about one hour of the drive and that a relay from Alabama to Wisconsin B i zT i m e s M i l w a u k e e

could take as many as 20 to 25 legs. Coordinating meeting times and locations for that many volunteers quickly turns into a logistical headache. That’s where Doobert enters the picture. Over the last few years it has developed as a way to automate the logistics of rescue relays. A rescue organization simply enters the starting and ending point for a transport and Doobert plots a route, breaks it into legs and begins the work of reaching out to volunteers. Once the route is filled and a day is set, the first person sets out on the transport. It isn’t all automation, though. Roy said there is still a transport coordinator who did the initial set-up of the trip and monitors progress on the day of the transport. That person also serves as a point of contact and can make decisions or develop alternatives if problems arise. At this point, Doobert is essentially a volunteer effort that Roy runs in addition to his day job working in information technology project management at Johnson Controls Inc. When he started the project, Roy didn’t really know how to go about building a website. He did what his professional experience taught him to do and

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created a request for proposals. He ended up selecting an India-based firm to do the hard coding for the site, while he provides them with functional specifications. “There (have) been a lot of challenges along the way,” he said. The platform integrates with Google Maps and has been augmented with additional elements to go beyond just the transport relay. It now includes rescues, foster homes and even animal photographers. Roy said his 2017 goal is to continue to build out the platform to address other elements of animal rescue, like feral or community cats. Along the way, Roy and his Indian partners have added additional layers of security and privacy, along with mobile apps. He said the challenges often come from making the platform work for all devices and browsers. Dealing with spam filters also becomes a challenge, since Doobert sends around 150,000 emails a month. Someday, Roy hopes to find a way to monetize the platform so he can focus on it full-time. But even if that doesn’t happen, he’s happy to have made the rescue process easier. The platform’s volunteer base has developed largely through word of mouth, but the system’s design also has boosted participation. Volunteers have an option to sign up to be certified volunteers, but to do that they have to provide references for other rescuers they’ve worked with. A similar process is used for organizations, as well. Contacting those references helps spread the Doobert name and attract more users, Roy said. He said there are typically 30 to 40 new users a week and part of the challenge is keeping users engaged. The users are particularly concentrated toward the northeast portion of the country and there are fewer on the West Coast. Olenik sees Doobert as a platform that can help connect volunteer communities into a wider network. “The whole concept, if it catches on, will be enormously helpful for the animals around the country, not just me getting an animal to Tomah,” she said. n

real estate

The Wisconsin Center in downtown Milwaukee.

Wisconsin Center expansion would probably need legislative action

n order for the Wisconsin Center District to expand the downtown Milwaukee convention center, it will likely need the state Legislature to take action, approved by Gov. Scott Walker, to allow the district to increase its taxing authority, according to district officials. Outgoing district president and chief executive officer, Russ Staerkel said financing the $225 million to $240 million convention center expansion could be done if the Legislature alCORRINNE HESS P: (414) 336-7116 E: corri.hess@biztimes.com Twitter: @CorriHess

lows the board to increase the tax the district collects on food and beverage sales in Milwaukee County from 0.5 percent to 1 percent. This would generate between $10 million and $12 million per year, enough to bond for an expansion of the convention center, Staerkel said. But getting support from a Republican-controlled Legislature for any tax increase initiative could be difficult, even

for a Milwaukee-specific tax for a Milwaukee-specific project. “Whether or not it would be easy (politically), that is all left to debate at the Legislature,” Staerkel said. “It would be up to the (Wisconsin Center District) board to ask for it.” The current convention center, which was built in 1998, is 266,000 square feet, with about 189,000 square feet of exhibit space. By comparison, Cincinnati has 196,800 square feet of exhibit space at its convention center; Columbus has 373,000 square feet; Minneapolis has 475,000 square feet; and Indianapolis has two convention venues totaling 749,000 square feet of exhibit space. A second phase of the Milwaukee convention center opened in 2000, and a third phase was planned to the north but was never completed. The long-desired completion has been brought back to the forefront now that the City of Milwaukee has been presented with two plans to develop a vacant two-acre parcel, owned by the city, across the street from the Wisconsin Center at Fourth Street and Wisconsin Avenue. w w w.biztimes.com

Milwaukee-based hotel development firm Jackson Street Holdings LLC is proposing a $279.6 million plan for the Fourth and Wisconsin site that would include three hotels totaling 506 rooms, 103,000 square feet of meeting space and 22,000 square feet of street-level restaurants, bars and cafés. Under the plan, called Nexus, Jackson Street Holdings is asking the Wisconsin Center District to fund and own the 103,000 square feet of convention and meeting space. Marcus Hotels & Resorts also submitted a proposal for the Fourth and Wisconsin site, a $125 million plan called eMbarKE, which calls for a 276room expansion of the existing Hilton Milwaukee City Center hotel and a tower with up to 200 apartments. Marcus also is asking for the convention center be expanded, at taxpayer expense. The City of Milwaukee has not yet made a decision on the Fourth and Wisconsin proposals, waiting to see what the Wisconsin Center District does, since each plan relies on a convention center expansion. Alderman Robert Bauman, who represents the downtown area and is a Wis-

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consin Center District board member, said he doesn’t believe either proposal for Fourth and Wisconsin will go anywhere. “Marcus can probably do the hotel piece, but they don’t claim to be a residential developer; it’s almost like promising nothing,” Bauman said. “And the other (project) can’t be completed without substantial assistance from the Wisconsin Center District.” “I blame the city,” Bauman said. “Before we were running around issuing an RFP, we should have had a pretty specific vision for what this should look like. Should the focus be hotels? Should it be residential? How about a public plaza with a streetcar running through it?” In July, the City of Milwaukee issued a request for proposal for the long-vacant site south of Wisconsin Avenue between Fourth and Fifth streets. The city’s asking price for the site (at 401-441 W. Wisconsin Ave.) is $4.6 million. The city has agreed to fund all streetcar-related infrastructure, but has stated tax increment financing or other city assistance is not available for development of the site. Bauman said the door should not have been closed on TIF financing. “We’re requiring real money in the purchase price,” he said. “Would I subsidize a four-story hotel? No. But I might subsidize a 1,000-room, 40-story hotel. If I were the commissioner (of the Department of City Development) I would say thanks for the pretty renderings, but I think they are both non-responsive to the RFP.” The Wisconsin Center District owns and operates the Wisconsin Center convention center, the UW-Milwaukee Panther Arena and the Milwaukee Theatre. A state law passed in summer 2015 gave ownership of the new Bucks arena to the Wisconsin Center District and required the district to provide $93 million for the arena. That financial obligation for the arena project left some people believing expansion of the convention center would be put on hold for years, if not indefinitely. The district is funded by three Milwaukee County taxes: a 2.5 percent tax on hotel rooms, a 3 percent tax on rental cars, and a 0.5 percent tax on food and beverage; plus an additional 7 percent tax on hotel rooms in the city of Milwaukee. The only tax the district board has the authority to raise is the Milwaukee County room tax, to 3 percent. Staerkel said doing so would generate an additional $1 million per year. 11

real estate The Wisconsin Center District would need the authorization of the state Legislature and Walker for it to make any other tax increases. Department of Administration Secretary Scott Neitzel, a Walker appointee who chairs the Wisconsin Center District board, said he is not ready to consider a tax increase. The board has engaged Manhattan Beach, Calif.-based Barrett Sports Group to provide it with a strategic plan on the district’s facilities. That plan is scheduled to be complete in February. At that time, Neitzel said a discussion will be had regarding the expansion of the convention center. “The board is going to have to look at what the district’s goals and objectives are for its facilities and what we want to do, and figure out how that relates to each proposal and work with the city to understand how our mutual objectives overlap,” Neitzel said. Regarding a possible tax increase, Neitzel said that is looking too far ahead.

“I want to look at the strategic analysis and see where the finances are,” Neitzel said. “Only then would I be willing to say how it’s going to work. I’m still hopeful the district will find a way to meet its objective without raising any tax.” Joel Brennan, president and CEO of Discovery World and a district board member, said there is a consensus on the board that the convention center should be expanded to the size it was planned for when it was built 20 years ago. The board has never gone into great detail about how to expand and the discussion has changed a bit since Jackson Street came forward with its proposal that would add meeting space at Fourth and Wisconsin, Brennan said. The original plan was to expand the convention center to the north, which is still a parking lot along Kilbourn Avenue. Brennan said it is likely a tax increase will be needed to pay for the expansion of the convention center, especially now that the district is paying for a portion of the Bucks arena.

“At the end of the day, we have only a certain number of vehicles to raise revenue for certain capital projects,” Brennan said. “I’m still hopeful there are going to be some things that come out of (the Barrett Sports Group study) that will be beneficial to the community. Will it be enough to generate enough revenue necessary for (an expansion) of the convention center? That remains to be seen.” If the board were to go to the state and request the authority for a tax increase, it could be difficult to achieve with the Republican-controlled legislature and would likely require lobbying efforts from Milwaukee elected officials. Milwaukee Mayor Tom Barrett said it is too soon to discuss financing for an expanded convention center. “A vibrant convention center is important to Milwaukee,” said spokesman Jeff Fleming, speaking on behalf of Barrett. “It creates jobs and adds value to our economy. At this stage, it is premature to discuss publicly how an expanded convention center might be funded.”

Milwaukee County Executive Chris Abele also said he believes it is too early to discuss financing for an expanded convention center. He said the district board’s first responsibility is financial sustainability and right now, it is in the process of paying down the debt they already have and reevaluating the need for convention space. “There are interesting proposals out there, but not an insignificant dollar amount requested from the district and the district deserves to get to its own comfort level,” Abele said. Abele stopped short of saying the city’s RFP process was flawed, but believes the district board should have been included from the beginning. “Anybody who you want to be part of the project with you on the landing, I like to think you should include on the takeoff,” Abele said. “But the city has designees on the (district) board. The groups who put out the proposals are good groups. I like to explore public private partnerships, but the ones that work best do their homework first.” n

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President Donald Trump

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The U.S. economy has been in an expansion period since 2009, but many American business owners have been less than thrilled with it. It has been a long but slow economic growth period. The U.S. unemployment rate has dipped to 4.6 percent, down from 10 percent in early 2010 and the lowest since 2007. But part of the reason for the low unemployment rate is the labor force participation rate is also low, at 62.7 percent. Job growth has been steady during the economic recovery, including the addition of more than 2 million private sector jobs in 2016. But U.S. GDP growth has been modest, growing only about 2.2 percent per year since the end of the Great Recession in 2009, then slowing to 1.1 percent in the first half of 2016. The economy picked up in the third quarter with 3.5 percent GDP growth, the highest quarterly growth since the third quarter of 2014. Fourth quarter GDP growth was expected to be about 2.9 percent, accord-

ing to the latest forecast. Former President Barack Obama’s supporters have credited his administration for working to pull the economy out of the recession and put it on a sustained growth path. But critics of Obama say many of his policies have hurt the economy and prevented the recovery from being far more robust. When he ran for president, Donald Trump promised to enact significant pro-business policies that would boost the U.S. economy to a 4 percent GDP growth rate. He made a strong pitch to voters in small town and rural areas, communities that have seen little economic growth for years. Many business owners were supportive of Trump’s promises to reduce taxes and lower regulations. Now, as President Trump’s administration begins, he must lead a divided America. More voters actually picked his opponent, Hillary Clinton, but Trump won the Electoral College and therefore, the w w w.biztimes.com

presidency. His inflammatory rhetoric on the campaign trail delighted many of his supporters, but outraged his opponents. Trump is not only extremely controversial, but also a unique figure to assume the presidency. He is the first president who lacks any prior government or military experience. His business background is a mix of impressive achievements and dramatic failures. But his status as a political outsider appealed to many of his supporters. Trump has long been known for his arrogance and big talk. The question now is, can he back it up? Will his policies lead to a much stronger U.S. economy than during the Obama years? The new president should have the support of the Republicans in Congress to cut taxes and roll back regulations, including the promised repeal of Obamacare. But he also has called for a massive infrastructure program which could be a tougher sell to Congress. Trump also has called for a dramatic

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shift in trade policy. Many of his Rust Belt supporters were attracted to this message. But some fear Trump could spark a trade war that would be devastating for the economy. Many business leaders appear to be optimistic that Trump’s administration will have a positive impact on the economy. In a survey of its membership, Wisconsin Manufacturers & Commerce reported 78 percent of respondents were either optimistic (54 percent) or very optimistic (24 percent) about what a Trump presidency means for business. The November reading of the National Federation of Independent Businesses’ small business optimism index rose from 94.9 to 98.4 – its largest increase since 2009 – after Election Day. When asked in an open-ended section of the WMC survey, “What is the most important thing President-Elect Trump should do in his first 100 days in office to grow the U.S. economy?” the most frequent responses from WMC members 13

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were related to reducing regulations, reforming the Affordable Care Act, lowering taxes and tapping domestic energy. For more insight on what lies ahead for the U.S. economy in 2017, and what impact Trump’s policies could have, BizTimes Milwaukee recently conducted its annual macroeconomic interview with Michael Knetter, Ph.D., an economist and president of the University of Wisconsin Foundation. The following are excerpts from that interview.

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President and CEO, University of Wisconsin Foundation Past dean, University of Wisconsin School of Business Former senior staff economist for former presidents George H.W. Bush and Bill Clinton

BIZTIMES: The long, slow economic ex-

pansion cycle continued through 2016. A year ago, you said that cycle could be “nearing the peak” and we appeared to be in the eighth inning of the cycle. Where do you think we are now on the economic cycle? KNETTER: “We may be in the ninth inning of a game that might go extra innings due to a burst of economic optimism since the election. The economy appears to be near full employment, but we do have lower than normal labor force participation, suggesting there may still be capacity for continued growth in the workforce, in addition to gains from investment in capital and productivity increases. “For a variety of reasons, the election results have created a wave of positive economic sentiment that has driven stock valuations, oil prices and the dollar higher. Most immediately, there seems to be widespread belief that a Trump administration will strike a different balance than the Obama administration in its approach to regulation of the economy. It seems fair to say people believe that Trump thinks consumers need less protection from businesses, as competition will regulate the actions of producers. Obama felt the market would not police producers enough and took a more active regulatory position that made it harder for firms to maneuver. The Trump victory has boosted the financial and energy sectors’ valuations most in the near term. “Longer term, with Republican control of the executive and legislative branches for the time being, it is conceivable that we will see the passage of constructive tax and spending bills, but that won’t be as easy as people imagine.” BIZTIMES: Will the economic expansion

continue in 2017, or will it finally run out of gas? What do you expect for GDP growth in 2017? KNETTER: “I do think that the shift in 14

sentiment is strong enough that it will carry the economy forward through the balance of 2017. I think growth will be in the 2 to 2.5 percent range, which is quite good for this stage of an expansion when unemployment rates are already low. How much further we can go beyond 2017 will depend on whether inflation starts to rise and the Fed feels a need to tighten more and sooner. The stronger dollar may just be enough to keep inflation at bay.” BIZTIMES: New president Donald Trump

has promised to boost U.S. economic growth with aggressive pro-business policies. What are your general thoughts about the impact Trump’s administration will have on the economy in 2017? KNETTER: “As noted above, I think his general bias toward a pro-business stance is already helping create optimism. It is as if the fog has lifted and we have seen the sunshine again. His administration can indeed help by adopting regulatory stances that are less onerous for business. Whether more help can come through fiscal or trade policy – or whether changes in those policies might actually hurt the economy as might be the case with trade – remains to be seen.”

scenario for the economy: an adverse supply shock that raises prices without output actually going up. For that reason, I do not think we will end up in a trade war. “Candidate Trump made a strong emotional connection with disenfranchised citizens in the upper Midwest, a region that has suffered considerable job destruction in manufacturing due to globalization and technological change. Unfortunately, I do not believe any policy changes will bring back the jobs in the places where (we) lost them. If larger barriers to international commerce do increase the possibility of making more ‘things’ in the United States, I suspect those things will be made in the South, where cost conditions have become more favorable and population has grown relative to the North. I think the Trump administration will ultimately reach that conclusion, if they haven’t already. They will then have to think about what to do to help these dislocated communities that helped deliver victory to Trump. They might start by reading J.D. Vance’s book, ‘Hillbilly Elegy.’ It is a somber tale of the extent of cultural, social, moral and economic decay in some pockets of America that were once anchored by large manufacturing companies.”

BIZTIMES: Trump has indeed promised to

make big changes in trade policy. He talks tough on China and is threatening companies that plan to move jobs overseas. He also is offering to help companies keep jobs here. He claimed victory when Carrier decided to keep hundreds of jobs in Indiana. What do you make of his approach to trade? Are we headed toward a trade war, and if so, what impact would that have? KNETTER: “I think a trade war would be terrible for the economy. Prices of many products would rise, increasing inflationary pressures without increasing output in the short run. This is the worst case B i zT i m e s M i l w a u k e e

BIZTIMES: Trump and the Republicans in

Congress are determined to lower taxes, including corporate taxes. What impact will this have on the economy and the federal budget? KNETTER: “Corporate taxes today make

up about 10 percent of total federal revenues in recent years. They amount to about 15 percent or so of total corporate profits. Lower corporate taxes would make locating corporate activity in the U.S. more desirable, presumably leading to more output in the U.S. over time. If

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taxes were cut in half, that would mean a boost of about 7 percent in corporate profits. Obviously, the lower rates would lead to a direct loss of about 5 percent of federal revenue. Whether job growth would cause enough offsetting personal income and (Federal Insurance Contributions Act) tax receipts to make up for the loss in corporate revenue is unclear. Since capital is more mobile than labor, I do think a shift away from corporate tax collections is probably, on balance, a good thing. I would also shift away from income and toward consumption taxes, especially by taxing things that we know are bad for us (e.g., alcohol, tobacco, marijuana where it is legal) or have negative side effects (e.g., fossil fuel consumption).” BIZTIMES: The Republicans also plan to

repeal Obamacare. What economic impact would that have if they do so? KNETTER: “The impact of any repeal of Obamacare would depend on what is created in its place. The short-term impact would be negative, in my opinion, because it would create a new period of uncertainty about how the system would work and another messy transition. Longer term, the best way to improve American health care is to take actions that can increase the supply of needed health care employees (support education, training and access to medical professions for more people and avoid capping what people can earn) and force consumers to pay a share of the cost of any health care services they consume. It is not rocket science, but some of it is unpopular and Obamacare made little progress on either of these critical fronts (increasing supply or reducing demand through co-pay requirements).” BIZTIMES: Trump also is promising a mas-

sive infrastructure program and says it will include private investment. Can he pull

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this off? What impact would it have on the economy? KNETTER: “Whenever someone asks whether Trump can pull something off, we ought to all agree that at least we should give it a ‘maybe,’ at minimum. We have chronically underestimated him. It is hard to know exactly what would be contained in a massive infrastructure program. There is a belief that our roads, bridges, rail systems, ports and airports could all do with some improvements. This kind of work might boost employment for the very groups who were hardest hit by the Great Recession and the overall trend away from manufacturing. It might be possible to have public-private partnerships for many of these types of projects, provided that private participants could get some return through user fees, etc. It is certainly plausible that there could be a public-private effort to rebuild infrastructure.” BIZTIMES: The Federal Reserve recently

raised interest rates, a full year after it had

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done so previously. What impact will this have on the economy, and what do you expect the Fed to do in 2017? KNETTER: “The market seemed to expect the December increase and two more for 2017. The Fed signaled that it might be more like three hikes in 2017 and the market seems to have shrugged that off. That makes sense, since the more aggressive Fed plans suggest that they believe the economy is in better shape than previously believed. I have no reason to doubt that three rate hikes in 2017 is a good prediction at this point. The wild card will be how the labor market and inflation are behaving throughout the year. If the labor market tightens and inflation rises more than expected, then the Fed may need to be even more aggressive, and that could slow things down.” BIZTIMES: The stock market has been on a

strong run and the Dow is nearly at 20,000. What should we expect from the stock market in 2017? KNETTER: “I think the stronger dol-

lar and higher interest rates are going to begin to take a toll on earnings. The unknown is whether there are any changes to tax policy that might offset these drags on earnings growth. In general, I think the post-election bump probably ate part of the gains we might have expected to come in 2017. So I look for modest returns on the order of 5 percent for the S&P 500 or the Dow.” BIZTIMES: Do you anticipate any changes

to the low U.S. unemployment rate, the labor force participation rate or wage inflation? KNETTER: “Unemployment cannot go much lower, but I expect the participation rate and wages to rise.” BIZTIMES: Where do you think the Wiscon-

sin economy is headed relative to other states? KNETTER: “The fastest growing states in the U.S. economy have tended to be in the South, where population has grown faster, and in areas that have (research and development)-intensive businesses and highly educated workforces. I do not think

our growth in population or jobs can keep up with southern states for many reasons. While some manufacturing jobs may return to the U.S., I do not see them coming to northern states in large number. “That makes me very uncertain about what policymakers are promoting as our source of growth in the future. I hope we can focus on keeping good jobs, finding ways to create a few more, and worry less about total job growth in our state. We should try to focus on what we can do to boost per capita income (or average earnings) and quality of life for our citizens. Chasing arbitrary growth in the number of new jobs is a poor goal. “To me, the deck feels pretty stacked against Wisconsin and it does not help when there is constant tension and criticism between the university system and the Legislature. We do not come across as a state that is focused on developing human capital at the highest level. That does not make me optimistic for Wisconsin. Hopefully, with this election behind us, we can do better.” n

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HEALTH CARE AT A CROSSROADS The health care industry is an exceedingly complex and enormous chunk of the national economy. It represents around 18 percent of the gross domestic product. But for many businesses and individuals – and even for the state and federal government entities that administer Medicare and Medicaid reimbursements – it has become unaffordable. Hospital costs and insurance premiums have been climbing steadily for years. In May of 2016, the Milliman Medical Index estimated that the total cost of health care that year for the average American family of four covered by a typical employer-sponsored health plan would exceed $25,000. In 2001, the first year the Milliman Medical Index began tracking annual health care costs, the projected cost was $8,414. Cynthia LaConte, chief executive of-

ficer and president of Milwaukee-based Dohmen, believes this needs to change. “We have to change the payment system away from volume-based incentives to outcomes-based rewards,” she said. “We have to apply technology. We have to apply market-driven principles like transparency and consumerism. People want to believe this is a political issue, but it’s not. Our nation’s health care crisis was created over decades spanning administrations in both parties. It will be solved the same way.” LaConte will be a presenter at the Northern Trust Economic Trends Conference presented by BizTimes Media on Jan. 26. In addition to her role leading Dohmen, LaConte is the founder and president of Dohmen’s Life Sciences Services company. She will speak about the unique role

health care plays in the national economy, as well as the role the life sciences industry plays in the state economy and the key economic trends that are shaping it, such as value-based pricing, precision medicine and the use of new, disruptive technologies. “All business leaders have an important role in shaping the world around them,” LaConte said. “They carry an economic and social responsibility to positively influence employees, customers, communities – even entire industries. But health care is unique; it touches everyone.” The debate over the direction of the nation’s health care industry is expected to intensify under the incoming presidential administration. President Donald Trump and the Republican-controlled Congress have made it clear they intend to repeal the Affordable Care Act, known colloquially as Obamacare.

TECHNOLOGY HELPS AMERICAN MANUFACTURING BE GREAT Manufacturing jobs were at the heart of Donald Trump’s presidential campaign. The idea that jobs in places like Wisconsin had left for China or Mexico and he would help bring them back helped Trump win the Badger State. But so, too, did his pledges for lower taxes and reduced government regulation. W. Kent Lorenz, chairman and chief executive officer of Pewaukee-based robotic systems integrator Acieta, said it will likely take at least a year before any significant legislative changes are felt by individual businesses. “The bigger issue here is setting a tone for manufacturing here in the U.S.,” said Lorenz, who will be a presenter at the Northern Trust Economic Trends Conference presented by BizTimes Media on Jan. 26. Lorenz said he doesn’t expect huge tariffs on goods produced in Mexico or China to become a reality, but he is banking on lower taxes and reduced regulations to help the manufacturing industry. Those changes would potentially 18

boost an industry that Lorenz says is already doing well, despite many suggesting it is dying. Lorenz certainly has the insight into the industry to know whether it’s healthy or not. Acieta counts Caterpillar, John Deere, Harley-Davidson and Rexnord among its customers, along with many more small- and medium-sized firms. The company also sells into a variety of markets, including oil and gas, construction agriculture, recreation and medical. He cautioned that the strong dollar will continue to make it difficult for businesses that export and while he thinks tax and regulatory changes will fuel growth in manufacturing, the idea that jobs will come back from China in large numbers is mistaken. If a company had 400 people doing work overseas, they’d look to use technology for workers in America to be five to seven times more productive. “They’re not going to do the same job (in America) the same way (as it is done overseas),” Lorenz said. He said technology like robotics and B i zT i m e s M i l w a u k e e

automation are making it easier for companies to produce goods here. Using automation allows companies to get closer to 100 percent utilization of their equipment, taking out the time lost to breaks, shift changes or fluctuations in productivity. While it makes processes more measureable and repeatable, it also requires manufacturers to be more precise. One of the measures Acieta tracks closely is industrial robot adoption rate. Today, there are about 160 robots for every 10,000 workers in the U.S. By 2025, that number is expected to reach 300, a level Germany and Japan are already at. In Wisconsin, there are more than 3,000 industrial robots, Lorenz said, and many are in small and medium-sized manufacturers. While about a decade ago, some smaller firms may have felt robotics and automation wasn’t for them, today, nearly everyone sees a need to automate to increase productivity. “Which is different than getting rid of people,” Lorenz said, adding that looming demographic trends mean the state

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BY BEN STANLEY, staff writer

LACONTE

“Rhetoric like ‘repeal and replace’ isn’t helpful because it misleads the American people into thinking there’s some kind of party-driven, simple solution out there,” LaConte said. “There isn’t.” In reality, the industry and the Affordable Care Act may be far too complex and far-reaching to dismantle and reassemble all at once. n

BY ARTHUR THOMAS, staff writer

LORENZ

and industry will need to retain and train its residents. He said manufacturers want to retain the people they have and train them where needed. The industry is increasingly complex and highly technical. A high school degree is no longer enough and positions with simple repetitive tasks will likely be automated. But for employees with the right skills and a willingness to learn, there’s an opportunity to grow. “The key is that the process knowledge that you have as an employee is kind of your secret sauce,” Lorenz said. n

SHIFTING DEMOGRAPHICS SHOULD GUIDE

LEADER BEHAVIOR About 75 million people are part of the baby-boom generation, many of whom are retiring in droves. And the generation that follows, Generation X, includes just 66 million people. The shifting demographics of the U.S. workforce should heavily influence the strategic planning of business owners in 2017, said Debbie Seeger, co-founder and senior vice president at executive placement firm Patina Solutions in Brookfield. Culture, work roles and training programs all will be influenced by the impending generational gaps, said Seeger, who will be a presenter at the Northern Trust Economic Trends breakfast presented by BizTimes Media on Jan. 26. “You have to have some sense of understanding that the workers will gain leverage,” Seeger said. “That’s not a trend; it’s a fact.” For that reason, business owners must renew their focus on creating an attractive culture, be open to a contingent

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workforce and become institutions of learning, she said. “Culture takes place front and center as the No. 1 thing that candidates look for when choosing their next employer,” Seeger said. “That changes by generation, but generally culture is moving into the front spot.” According to Seeger, people work at a company for two reasons: Financial compensation and emotional compensation. A company should show employees its values and how they have a greater value to society, she said. “Everybody understands financial compensation,” Seeger said. “But the other part of this is it’s becoming more and more important for companies to understand how you treat people. If they feel like their financial compensation is even a little bit less than fair and they don’t feel rewarded, recognized, part of a team and their values are in alignment, they’ll leave.” Changing population demographics also are driving a shift toward a more “gig”

T R E N D S

The financial markets shook off several shocks in 2016: fear of a Chinese hard landing in the first quarter, the surprise Brexit vote in June, and Donald Trump’s unexpected victory in the U.S. election in November. While the Bank of England did cushion the fallout from Brexit with an interest rate cut and expanded quantitative easing, financial markets more broadly started to contemplate reduced monetary accommodation from developed central banks as the year progressed. Central bankers have been looking to politicians to help share the burden of bolstering growth, and the U.S. election has created the opportunity for this domestically. While a more proactive government approach has already been happening in Asia through aggressive government fiscal engagement in China and Japan, Europe has not shown much evidence of making this transition. The transition to less accommodative U.S. monetary policy is greatly facilitated by the improving global economy, which has

BY MOLLY DILL, staff writer

2 0 1 7

•

E V E N T

been moderately accelerating since May. While still battling secular headwinds– high debt levels, aging populations and lowered demand – there does appear to be near-term room to run. Our expectation is that the economic backdrop, along with the potential of pro-growth reforms in the U.S., will support continued risk taking in 2017. We recommend an overweight to U.S. assets because of stronger earnings growth and a clearer political agenda, while we will be watching Europe in particular for further signs of change in their upcoming elections. Our primary risk cases involve inflation, Fed policy, and U.S. policy uncertainty. Our overweight to risk assets assumes a controlled level of inflation, as we expect global capacity and technology to continue to cap pricing power. An unexpected rise in inflation, or even stronger economic growth, could lead to Fed policy that is more hawkish than we expect. Higher interest rates could directly pressure valuations of risk assets, and increase volatility

w w w.biztimes.com

economy, she said. Contracted, seasonal, temporary, summer, internship and part-time workers now make up approximately 35 percent of the workforce, Seeger said. Employers will have to decide what kind of balance to strike between core employees and contingent employees. Workers are driving the shift to gig work because it offers them the opportunity for more work-life balance, but at the same time it’s an opportunity for companies that want workforce flexibility, she said. In the gig economy, employers can expect more cloud recruiting, or the “uberization of talent,” which makes workers more easily transferrable because their roles are assigned virtually based on pure talent. Finally, the shifting workforce makeup means companies must become institutions of learning, taking the lead in training talent on both technical and soft skills, Seeger said.

S P O N S O R

As we begin the year, we look forward to hearing from this year’s Economic Trends panelists to gain their perspectives on the business and economic prospects for 2017.

President & CEO Northern Trust - Wisconsin

J a nua r y 2 3 - F ebr ua r y 5, 2 017

Because fewer workers are available, employers can’t afford not to hire someone because their critical thinking or work ethic isn’t perfect, she said. They should take the initiative to hire employees who have potential and then train them on those skills. “They’re having to start somewhere and not just throw up their hands and say, ‘Oh, this younger generation doesn’t have a work ethic,’” Seeger said. “Well, what are you going to do about it?” n

M E S S A G E S

in the markets through “taper-tantrum” like episodes. Our final risk is around U.S. policy uncertainty – the incoming Trump administration is already challenging conventional protocol in both domestic and international politics. While we think the economic risk associated with new policies in areas such as trade is relatively low, we categorize the broader geopolitical risk around this new approach to U.S. politics as medium. Geopolitical episodes tend to only have a transitory effect on financial markets, but we will be focusing on their potential to morph into economic risks which can have a more sustained effect.

James H. Kuehn, CFA

SEEGER

At Davis & Kuelthau, we are passionate about partnering with our clients to achieve their legal and business objectives. Our attorneys have helped thousands of businesses throughout Wisconsin, and nationally, grow and thrive in even the most challenging economic times. As one of Wisconsin’s leading business law firms, and proudly headquartered here in Milwaukee, our team of corporate, employment and litigation attorneys are uniquely positioned to help local businesses and their owners navigate their legal challenges every day. We bring real-world experience and understanding, and a results oriented mindset, to help clients succeed. Aligned with the breadth of the Midwest’s thriving industries, we advise an array of companies including, specialty manufacturers, distributors, real estate and construction firms, food and beverage producers, and B2B service providers. When the time is right, we would be delighted to talk to you about your needs. To learn more about our business services, please visit www.dkattorneys.com.

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E C O N O M I C

T R E N D S

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MMAC MEMBERS OPTIMISTIC ABOUT 2017 B U T

E X P E C T

S L O W

S T A R T

T O

T H E

Y E A R

BY BRET MAYBORNE, for BizTimes

ilwaukee-area businesses expressed measured optimism toward 2017, according to the annual Business Outlook Survey conducted by the Metropolitan Milwaukee Association of Commerce. Seventy-three percent of those businesses surveyed see sales increases, 71 percent predict profit gains and 61 percent expect employment growth in 2017 for their local operations. Metro businesses are generally optimistic toward future business prospects, but expectations suggest a slow start to 2017. Overall, expectations for 2017’s first quarter are significantly lower than those expressed for the calendar year as a whole. Sales expectations among Milwaukeearea businesses have been consistently moderate over the course of the past year. Seventy-three percent of those sur-

veyed expect increases in real sales levels in 2017. Only 7 percent predict sales declines, while the remainder (21 percent) see no change. The proportion predicting 2017 sales growth is similar to both the 75 percent who began 2016 predicting sales increases for that year as a whole, and the 72 percent who forecast 2017 sales gains just three months ago. Sales optimism is strongest among manufacturers; 77 percent of manufacturers surveyed predict sales growth in 2017, versus 70 percent among non-manufacturers. Expectations by employer size are more similar. Seventy-four percent of small employers (with fewer than 100 employees) see 2017 sales gains, while 71 percent of large employers have such expectations. Manufacturers are also more likely

to predict rising profit levels. Eighty-two percent of manufacturers see 2017 profit increases, versus 65 percent among nonmanufacturers. Overall, 71 percent of all employers surveyed see profit increases in 2017. Conversely, only 9 percent see declining profit levels. The remaining 20 percent see no change. A moderate growth trend is expected for capital spending plans among Milwaukee employers. The largest number (42 percent) of those surveyed see increased capital spending levels for local operations in 2017. Eighteen percent see capital spending decreases, while 39 percent see no change. The employment trend in the metro area was on a bit of a roller coaster ride throughout 2016, from slow year-overyear growth over 2016’s first three quarters

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to employment declines posted in the two most recent months available (October and November). To date, jobs in 2016 are up a modest 0.6 percent, down from the 1.1 percent growth posted in 2015. Nonetheless, businesses overall remain confident that job growth will continue into 2017. A strong majority (61 percent) of businesses

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expect increases in their local workforces in 2017, with those seeing job increases outnumbering those predicting declines (6 percent) by more than a 10-to-one margin. Thirty-three percent see no change. Despite a flat manufacturing job trend in 2016, manufacturers are more likely than non-manufacturers to predict 2017 job gains. Currently, 68 percent of manufacturers predict job increases during calendar year 2017, higher than the 57 percent of non-manufacturers who see such gains. By comparison, 49 percent of manufacturers forecast employment increases at the beginning of 2016. Increases in wages and salaries for area workers in 2017 are expected to be slightly higher than those projected in 2016. The average change in per person employee wages and salaries is forecast to rise 2.9 percent over the next 12 months, up from the 2.5 percent annual increase projected at the opening of 2016. Price inflation accelerated slightly in 2016 after a flat 2015 trend. Increases in consumer prices nationally are likely to

average 1.2 percent in 2016, up from the 0.1 percent rate recorded in 2015. Businesses surveyed expect inflation to remain moderate in 2017. Forty-one percent see inflation falling in the 0 percent to 2 percent range, while the majority, 55 percent, expect price increases of 3 to 5 percent. Only 5 percent of those surveyed predict price gains of 6 percent or higher.

FIRST QUARTER E X P E C TAT I O N S

Businesses are less optimistic toward 2017’s first quarter than they are for the year as a whole. While 73 percent of those surveyed predict sales increases for 2017 as a whole, only 62 percent expect first-quarter sales gains (versus 2016’s first quarter). Seven percent see first-quarter sales declines and 32 percent expect no change. The percentage forecasting a quarterly sales increase is up marginally from the 63 percent who predicted fourth-quarter 2017 sales gains (versus year ago levels). Sales growth in the manufacturing sector may gather momentum as the year

Downtown Milwaukee

moves forward. The 77 percent of manufacturers expecting sales gains for the year as a whole is substantially higher than the 63 percent who forecast sales gains in 2017’s first quarter (versus year-ago levels). Sixty-one percent of non-manufacturers see first-quarter sales increases. A majority (58 percent) of all companies surveyed see increased profit levels in 2017’s first quarter (versus 2016’s first quarter). Thirteen percent expect profit declines and 28 percent predict no change. The percentage expecting profit increases is consistent with the 57 percent who forecast fourth-quarter 2016 profit gains. Conversely, employment expectations are somewhat weaker now than they were three months ago. Forty-six percent predict first-quarter job gains for their local operations (versus 2016’s first quarter), down

from the 56 percent who forecast fourth quarter 2016 job increases (versus year-ago levels). Currently, 8 percent predict job declines and 46 percent see no change. By industry, 50 percent of manufacturers see employment increases in the first quarter, (versus 2016’s first quarter) versus 44 percent among non-manufacturers surveyed. A similar gap was registered by company size, where 50 percent of small employers see first-quarter job gains versus 41 percent for large employers. The Business Outlook Survey, conducted by the MMAC, contains responses from 121 Milwaukee-area firms, both large and small, employing more than 30,000 people. n Bret Mayborne is the economic research director at the Metropolitan Milwaukee Association of Commerce.

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T R E N D S

2 0 1 7

QUAD, JOY GLOBAL LEAD LOCAL STOCK RALLY

BY ANDREW WEILAND, staff writer HE STOCK MARKET had a strong

bull run in 2016, with the Dow Jones Industrial Average up 13.4 percent to an all-time high of nearly 20,000, the S&P 500 index rising 9.5 percent and the Nasdaq index up 7.5 percent. The market was down in 2015 (the Dow fell 2.23 percent), and it got off to a slow start in 2016 with some concerns the economy was headed into a recession, said Katherine Schoen, senior vice president of wealth management strategy for Milwaukee-based Robert W. Baird & Co. Inc. But after February, the market rebounded until the fall, when attention turned to the election. There were nine consecutive days of stock market losses before Election Day, but then the market had an end-of-year rally after Donald Trump was elected and Republicans maintained control of both houses of Congress. Southeastern Wisconsin’s publicly traded companies joined in the 2016 stock market rally, with local gainers far outnumbering decliners. “(2016) was a good year for Milwaukee stocks,” Schoen said. The biggest local stock gainers in 2016 were: Quad/Graphics Inc., up 189 percent to $26.88; and Joy Global Inc., up 122 percent to $28.00. Sussex-based Quad became the largest long-run printing firm in North America in 2016 when Chicago-based R.R. Donnelley & Sons Co. spun off its long-run printing business. Quad has been making big changes to become more efficient and more diversified. Since 2010 the company has executed more than a dozen acquisitions, doubled annual revenue to $4.7 billion and invested in expanded digital marketing capabilities. The company also closed 34 printing plants during that time and reduced its overall headcount by 10,000 employees. In November 2015, Quad announced a $100 million cost reduction plan, which included closing plants in Colorado, Connecticut, Pennsylvania and Georgia. Quad reported a net loss of $641.9 million in 2015, but returned to profitability in 2016. For the first three quarters of the year, the company reported a profit of $7.4 million. Quad’s stock fell 59 percent in 2015, from $22.96 to $9.30, but made up all of 22

that lost ground and then some in 2016. “They’ve been able to right the ship a little bit,” Schoen said. Milwaukee-based mining equipment manufacturer Joy Global had the biggest stock price decline among local companies in 2015, falling 73 percent from $46.52 to $12.61. The company’s stock price bounced back in 2016 as it made major cuts to operations, and then announced in July it would be acquired by Komatsu America Corp. for $3.7 billion. The deal is expected to close by mid-2017, pending shareholder and regulatory approval. Komatsu intends to operate Joy Global as a subsidiary and retain its brand names. The Milwaukee headquarters will continue to operate, according to a Joy Global spokesperson. Only a handful of local companies suffered stock price declines in 2016, but the biggest losers were Connecture Inc., down 53 percent; Jason Industries Inc., down 52 percent; Bon-Ton Stores Inc., B i zT i m e s M i l w a u k e e

down 30 percent; and Strattec Security Corp., down 29 percent. Milwaukee-based vehicle access control products manufacturer Strattec had the biggest dip in actual stock price, falling from $56.49 at the end of 2015 to $40.30 by the end of 2016. The company reported a 55.7 percent dip in net income for the 2016 fiscal year, falling from $20.65 million in 2015 to $9.15 million. Boston Store parent company Bon-Ton, with dual headquarters in Milwaukee and York, Pennsylvania, continues to absorb big losses. The company lost $31.6 million in the third quarter of 2016, which was actually an improvement over its 2015 third quarter net loss of $34 million. The company’s stock price fell from $2.10 to $1.47 during 2016. Bon-Ton is just one of several struggling department store retailers. “You have a change in how consumers are spending their money; more online, less in stores,” Schoen said. “There has

J a nua r y 2 3 - F ebr ua r y 5, 2 017

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been a shift in retail.” Milwaukee-based Jason Industries, the parent company for a number of manufacturers in the seating, finishing, components and automotive acoustics markets, saw its stock price fall from $3.78 to $1.80 in 2016. The company recently named a new chief executive officer, Brian Kobylinski. The company’s third-quarter net loss of $2 million was an improvement compared to $2.6 million for the third quarter of 2015. Brookfield-based Connecture, which provides web-based information systems used to create health insurance marketplaces, saw its stock price fall from $3.61 at the end of 2015 to $1.68 at the end of 2016. The company reported a net loss of $3.1 million in the third quarter, up from $2.3 million a year ago. Connecture did receive a $52 million investment from a private equity firm in May and acquired a Chicago health insurance consumer platform for $5 million in June. n

BIZTIMES STOCK INDEX - 2016 RESEARCH COMPILED BY ROBERT W. BAIRD & CO. INC. Ticker

Company name

QUAD

Quad/Graphics Inc.

JOY

Joy Global Inc.

ESNC

EnSync Inc

JOUT MCS MOD

Modine Manufacturing Co.

BRC

12/31/2015 Price

12/31/2016 Price

% Change

9.3

26.88

189%

12.61

122%

0.38

0.720

90%

Johnson Outdoors Inc.

21.89

39.69

81%

Marcus Corp.

18.97

31.5

66%

9.05

14.9

65%

Brady Corp.

22.98

37.55

63%

PLOW

Douglas Dynamics Inc.

21.07

33.65

60%

TWIN

Twin Disc Inc.

10.52

14.6

39%

JCI

Johnson Controls International plc

29.883

41.19

38%

GNRC

Generac Holdings Inc.

29.77

40.74

37%

ASB

Associated Banc-Corp.

18.75

24.7

32%

ROK

Rockwell Automation Inc.

102.61

134.4

31%

WSBF

Waterstone Financial Inc.

14.1

18.4

30%

BGG

Briggs & Stratton Corp.

17.3

22.26

29%

HOG

Harley-Davidson Inc.

45.39

58.34

29%

BMI

Badger Meter Inc.

29.295

36.95

26%

SXT

Sensient Technologies Corp.

62.82

78.58

25%

AOS

A. O. Smith Corp.

38.305

47.35

24%

BKMU

Bank Mutual Corp.

7.8

9.45

21%

ARIS

ARI Network Services Inc.

4.5

5.41

20%

WEYS

Weyco Group Inc.

26.76

31.3

17%

FISV

Fiserv Inc.

91.46

106.28

16%

MTG

MGIC Investment Corp.

8.83

10.19

15%

WBB

Westbury Bancorp Inc.

20.7

15%

WEC

WEC Energy Group Inc.

51.31

58.65

14%

KOSS

Koss Corp.

1.997

2.28

14%

DOC

Physicians Realty Trust

16.86

18.96

12%

RRTS

Roadrunner Transportation Systems Inc.

9.43

10.39

10%

ATU

Actuant Corp.

23.96

25.95

RXN

Rexnord Corp.

18.12

19.59

MAN

ManpowerGroup Inc.

84.29

88.87

KSS

Kohl’s Corp.

47.63

49.38

SNA

Snap-on Inc.

171.43

171.27

-0%

APAM

Artisan Partners Asset Management Inc.

36.06

29.75

-17%

STRT

Strattec Security Corp.

56.49

40.3

-29%

BONT

Bon-Ton Stores Inc.

2.1

1.47

-30%

JASN

Jason Industries Inc.

3.78

1.8

-52%

CNXR

Connecture Inc.

3.61

1.68

-53%

All data taken from Factset Research Systems and compiled by Robert W. Baird & Co. Inc.

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TAX CHANGES IN STORE FOR BUSINESS OWNERS H O W

T O

P R E P A R E

n the campaign trail, Donald Trump promised to reduce the top corporate tax rate from 35 percent to 15 percent and make sweeping changes to the tax code. President Trump also plans to end most business tax deductions and incent U.S. companies holding cash overseas to repatriate it at a lower rate. As businesses are preparing 2016 tax returns and strategizing for the 2017 tax year, it’s worth closely watching how Trump’s planned changes play out in Congress. With attention to the process, business owners should be able to take advantage of the opportunities. “You never know what’s going to happen with Congress,” said Arthur Lee, owner and founder of Alliance Tax & Ac-

N O W

T O

T A K E

A D V A N T A G E

BY MOLLY DILL, staff writer

counting Service LLC in Elm Grove. Trump has proposed the 15 percent top tier tax rate for corporations, while the GOP plan in Congress has called for 20 percent. Trump also has suggested a simpler individual tax code, with just three income brackets. “We know for a fact that (President) Trump wants to do some overall large scale tax law changes and he wants to do it quickly,” Lee said. “Unfortunately, history has shown that large tax reform doesn’t happen quickly. However, we also know that the (president) and the GOP majority in the House and Senate are pretty close in the things they’d like to see happen.” It will take months to implement the kind of broad tax overhaul being proposed by the new administration, but if

approved, it likely would be made retroactive to Jan. 1, 2017, said Rick Taylor, partner at Wipfli LLP in Wauwatosa. “It’s really up in the air,” Taylor said. “We know taxes are going to go down; we don’t know how much.” Taylor said cutting the corporate rate to 15 percent seems unrealistic. For one thing, about half of the corporations in the U.S. are S corporations, which are tax pass-through entities. For business owners, effective individual tax rates can be as high as 45 percent once the Obamacare tax is factored in and the benefits of deductions are phased out, so S corporation owners could be at a major disadvantage, Taylor said. And if individual tax rates were cut along with corporate rates, revenue would be an issue.

“Most of the jobs are created by passthrough entities, and so why should they pay more taxes than the big corporations?” he asked. “It’s going to be a rough 100 days as they work through this.” The detailed GOP “Blueprint” tax plan proposed last year is more likely than Trump’s rhetoric to be what is included in the end bill, Taylor said. And the cost of reducing tax rates may be made up by having all income, including dividends and long-term capital gains, taxed as ordinary income. Jim Locatelli, president of accounting firm Locatelli S.C. in Milwaukee, is less optimistic that there will be a rate change for businesses in 2017. “In terms of, ‘I expect the rates to drop from x to y,’ I’m not comfortable at all be-

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LOCATELLI

cause I’m hoping that the rates drop, but the reality is we’re currently operating at a budget deficit,” Locatelli said. “We reduce the tax rates to any significance, where is the offsetting revenue coming from?” He is advising clients to do traditional year-end tax planning, which he says normally includes deferring revenue recognition and accelerating expenses on a cash basis. Several area accountants agreed a proactive step business owners can take now, especially if they expect tax rates to be lower this year, is to defer income and accelerate deductions for the 2016 tax year using depreciation. “In effect, you can say, ‘Look, rates are

LEE

coming down, I’m going to take more depreciation expense when I file my 2016 tax return,’” said Eric Trost, principal-incharge, tax services at SVA Certified Public Accountants in Brookfield. Most equipment and new property, such as if a business purchased new computers, can be deducted at a 50 percent bonus on top of normal depreciation for the 2016 tax year, Taylor said. Trost also advised business owners to look at their accounting method and determine whether they can use one that defers income. “If I’m on the accrual basis of accounting, I might want to look at changing to the cash basis of accounting,” he said.

TROST

And since most business deductions, with the exception of the research and development tax credit, would go away in 2017 under Trump’s plan, it’s probably a good idea to take advantage of some for the 2016 tax year. “The research and development credit is more powerful now because for small businesses, it can be used against the alternative minimum tax,” Trost said. “That’s new for 2016. By being able to apply against alternative minimum tax, it reduces their current year tax obligation.” Taylor agreed business owners should take advantage of the R&D credit. “Most businesses that are doing any sort of new product development or are

TAYLOR

looking for ways to make their businesses more lean will qualify,” he said. Other deductions to look out for are Section 179 expensing, through which corporations can get up to $5,000 for certain types of property, and de minimis expensing, through which basically every piece of tangible property purchased for less than $2,500 can be expensed, Taylor said. “There’s lots of ways that people should just maximize those rules this year,” he said. “The problem is this stuff has gotten so complicated and so convoluted and there’s so many exceptions and things that the business owner really has to work with a CPA, work with a tax advisor.” n

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BUSINESS CONFIDENCE AND CAPITAL SPENDING EXPECTED TO INCREASE IN 2017 L E N D I N G

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O B S T A C L E BY MOLLY DILL, staff writer

s the Earth takes another turn around the sun and a new presidential administration sets its priorities for the next four years, there are a number of financial considerations business owners should take into account. The performance of the markets and the expected lending environment are top of mind for companies seeking growth. According to the 2017 Economic & Stock Market Outlook from Milwaukeebased Robert W. Baird & Co. Inc., the stage has been set for improved economic trends and optimism in the coming year. In fact, even just the expectation of progress could increase CEO confidence and drive capital expenditures and corporate growth, said

CHERNOW

Willie Delwiche, investment strategist at Baird and an author of the report. “For a long time, it’s been cheaper to hire more workers than to invest in a plant,” Delwiche said. “I think we’re

DELWICHE

PASHO

reaching the point where that pendulum is starting to shift back. The good thing with that is that drives productivity growth and that helps the worker and that helps the business.”

The return of earnings growth could help ease valuation concerns for the cyclical bull market in stocks, which is in its infancy, the report says. “I think the first half of the year, from

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a seasonal perspective, is shaping up to be better than the second half of the year,” Delwiche said. “I think the story really is going to be an economic one and if this hint of growth that we’ve gotten can continue into next year. We’ve emerged from four or five quarters of declines; we finally have earnings growing again.” “I think a lot of the energy that has gone into the stock market here so far is the election of Mr. Trump and what he says he’s going to do,” said Bob Chernow, a Milwaukee businessman and futurist. “A lot of it is based on the future, not the current situation. My guess is that technically the market is ready to pull back here a little bit, maybe 5 percent. It’s gone up about 10 percent since the election.” At the moment, Delwiche advises investors to hold slightly higher levels of cash than they would historically, since valuations are still high in stocks and interest rates are likely to move higher over the course of the year. Less bond exposure is also a good strategy, he said. “From a global perspective, continue

to focus on U.S. exposure rather than international exposure,” Delwiche said, since it takes currency issues out of play. “From a size perspective, small caps are doing better than large caps. Their upward growth potential is better. They do better when the economy is growing robustly.” The Federal Reserve is expected to make as many as three rate hikes this year, which impacts not only valuations, but also the interest rates companies can expect to pay on loans. “At the margin, it will cost a little bit more to borrow, but at the same time, the opportunities to put that money to work will be greater, the growth could be greater,” Delwiche said. “The economy will have the momentum, I think, to handle those high interest rates.” Unless there are closely spaced interest rate increases, loan demand should remain healthy in 2017, said Jasin Pasho, Milwaukee market president at Wisconsin Bank & Trust. “With the increase that we’re seeing, they’re modest increases,” he said. “I

don’t see it slowing down the loan application process, so much as the demand is there. So long as they are a sound business and they have a sound balance sheet and have good cash flow, I don’t think that will change, so long as it’s not that rapid increase.” If President Donald Trump goes forward with his plans to reduce banking regulations, it should increase loan availability, Pasho said. “Banks would have even more availability to lend more, so businesses would have, I would say, more selection of who to go to and how to expand, but their businesses would really rely on more internal growth,” he said. “If we don’t have as many regulations, if we don’t have as

many compliance things, we could actually be investing those funds into loans for smaller businesses.” Chernow said the banks are right that there’s overkill in the level of paperwork required to complete a loan, but he warned reducing regulations too far could swing the pendulum back in the direction that resulted in the financial crisis. “The banks have a big problem right now – they’ve got a lot of money that they’ve got to put out and make money on,” he said. “The agencies which regulate banks and financial institutions will be starved by the federal government and will not be able to do a proper job of following up to make sure that people are doing what they say they’re going to do.” n

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NORTHWESTERN MUTUAL TOWER, THE CORNERS TO OPEN IN 2017 O T H E R

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n early December, the 617-foot yellow crane lifted its final load, a cooling tower, to the Northwestern Mutual Tower and Commons office building under construction in downtown Milwaukee. The crane started at 150 feet two years ago, gradually growing along with the tower for two years to rise above much of the city’s skyline. Now that much of the work on what will become the city’s largest office building is complete, the crane has been dismantled. Work these days is focused inside the building, with more than 500 workers installing the flooring, walls and drywall that will complete a $450 million, 32-story, 1.1 million-square-foot office tower for Northwestern Mutual Life Insurance Co., which is scheduled to open in fall. Meanwhile, Northwestern Mutual’s $100 million, 33-story parking and residential tower at 777 N. Van Buren St. is on schedule to be completed and occupied by spring 2018. Nearby, the Downtown Transit Center is being demolished, making way for an expected spring groundbreaking of The Couture, a $122 million, 44-story tower that will include 302 luxury apartments and about 50,000 square feet of retail space. On the west side of downtown Milwaukee, another major project is progressing. The $524 million Milwaukee Bucks arena broke ground June 17, just

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BY CORRINNE HESS, staff writer

north of the BMO Harris Bradley Center. While the arena itself won’t be completed until August 2018, the first phase of the arena district development will wrap up this year. A 55,000-square-foot training center that will include two full-sized basketball courts, a weight room and a medical training area will be completed in July. Froedtert & the Medical College of Wisconsin is building a three-story, 37,000-square-foot community health center connected to the Bucks training facility. A six-story parking structure that will include 10,000 square feet of retail space along West Juneau Avenue and 11,000 square feet of office space along West McKinley Avenue will be completed in November. “This (arena and surrounding) development will be transformational for the people of Wisconsin, creating thousands of family-supporting careers while driving additional economic development in the heart of the city,” said Bucks president Peter Feigin. Construction will continue on the Milwaukee streetcar project through this year and 2018, although the first streetcar line will not be operational until fall 2018. The city will have its first look at what the Milwaukee streetcar will look like in December, when Pennsylvania-based Brookville Equipment Corp. is expected to deliver the first car.

The Northwestern Mutual Tower and Commons office building in downtown Milwaukee is scheduled for completion in the fall.

OFFICE

Several large office building projects were announced in 2016. Whether they all will break ground this year will depend on if developers can secure tenants. This summer, the first phase of the

$137 million BMO Harris Financial Center project will begin when the bank demolishes its existing parking structure immediately north of its existing building at 770 N. Water St. to make room for a new 25-story office tower.

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LEFT: The long-awaited Couture projected is expected to break ground in the spring. RIGHT: The BMO Harris Financial Center project will begin this summer with the demolition of the bank’s existing parking structure.

Milwaukee-based Irgens Partners LLC will be the developer for the new building and also will redevelop the existing BMO Harris Bank building, a 20-story structure built in 1967, into a mixed-use building. Milwaukee law firm Michael Best & Friedrich plans to move from the 100 East building into the new BMO Harris Financial Center when it is complete in late 2019. The Marcus Corp. might also move out of 100 East. The company is planning to break ground this fall on Edison Place, a 20-story, $119 million mixed use development in the Park East Corridor that would include an eight-screen movie theater, 162,000 square feet of residential space and 113,800 square feet of office space. The company says it might move

its headquarters to the building. Milwaukee-based Mandel Group Inc. in late 2016 announced plans for a threebuilding, 275,000-square-foot office development along the Milwaukee River in the city’s Walker’s Point neighborhood. Office buildings planned by Irgens in the Third Ward and Hammes Co. in the Park East corridor downtown also are expected to break ground in 2017. The Irgens project still needs an anchor tenant. Hammes will be the anchor tenant in its office building, moving downtown from Brookfield. Vacancy rates for the area’s office market continued to decline in the fourth quarter of 2016 and are expected to be even better in 2017, according to a report from Xceligent and the Commercial

Assocation of Realtors Wisconsin. The fourth quarter net absorption was 52,817 square feet, bringing the year-to-date total to just over 638,000 square feet. The positive net gain is due to Irgens opening 833 East in downtown Milwaukee and the 150,000-square-foot Meadowland Research & Technology Center in the Milwaukee County Research Park. Irgens also has announced plans for two additional office buildings in the research park.

R E TA I L

The Corners of Brookfield, a 750,000-square-foot mixed-use development with a heavy retail component, at I-94 and Barker Road in the Town of Brookfield, will open in April, bringing with it the state’s first 140,000-square-foot

Von Maur department store, an L.L.Bean store, Arhaus Furniture and many other first-to-market retailers. “This is the most important (metro Milwaukee) retail development in a generation,” said Bruce Westling, a principal of NAI MLG Commercial, who has worked closely on the project. “It will be catalytic to the entire region and expose the Milwaukee market to retailers who typically fly over from Chicago to Minneapolis.” 84South, a mixed-use development by Cobalt Partners at I-894 between Layton Avenue, South 84th and South 92nd streets in Greenfield is expected to open its first phase in summer. It also will have a heavy retail component and tenants will include Total Wine & More and Fresh Thyme Farmers Market.

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The Corners, a mixed-use development with 400,000 square feet of retail in the Town of Brookfield, will open in April.

The Brookfield Fashion Center on Bluemound Road is a property to watch in 2017. HSA Commercial Real Estate, the Chicago-based developer of Wauwatosa’s Mayfair Collection project, purchased the strip mall in late 2016 for $43 million with plans to revitalize the center with new tenants.

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There is more than 3 million square feet of industrial space under construction in southeastern Wisconsin and the largest of those projects are in Kenosha County. Uline is building a 880,000-squarefoot distribution center in Pleasant Prairie. The next largest industrial project under construction in the region is First Park 94, building B, a 602,348-squarefoot speculative industrial building in Somers, also in Kenosha County The vacancy rate for the Milwaukeearea industrial market remains stable at 4.2 percent, which was the same figure as early 2016. The region’s industrial real estate market absorbed 127,040 square feet of space during the fourth quarter and about 4 million square feet of space for all of 2016. “Given the perceived level of tenant activity in the market, the lack of change in the vacancy rate could signal a shortage of available space in the market,” said

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Tracy Johnson, president and chief executive officer of CARW.

HOTELS

The biggest hotel news in 2017 will be how the city decides to move forward on two proposals for the development of a 2-acre, city-owned vacant site at North Fourth Street and West Wisconsin Avenue in downtown Milwaukee. Milwaukee-based hotel development firm Jackson Street Holdings LLC is proposing a $279.6 million plan, called Nexus, that would include three hotels totaling 506 rooms, 103,000 square feet of meeting space and 22,000 square feet of street-level restaurants, bars and cafés. Marcus Hotels & Resorts also submitted a $125 million proposal for the site, called eMbarKE, which calls for a 276room expansion of the existing Hilton Milwaukee City Center hotel and a tower with up to 200 apartments. A decision by city officials is expected in the spring. A 10-story, 220-room Westin being developed by Jackson Street Holdings on the east side of North Van Buren Street between East Michigan Street and East Clybourn Street will open this summer. It will feature an Italian steakhouse on the first floor and add a new luxury hotel brand to the downtown hotel market. n

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This home at 9837 Range Line Road in Mequon was sold in 2016.

AREA HOUSING SALES REACH

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he southeastern Wisconsin residential real estate market ended 2016 with more than 21,000 homes sold, a notable feat for two reasons: that benchmark has not been reached in the local housing market since 2005, and it was achieved despite historically low inventory for home buyers to choose from. “If 2015 was a good year, 2016 was a great year,” said Richard Ruvin, partner with Falk Ruvin Coldwell Banker real estate brokerage. “2017 should be a strong year as well. We’re bullish and our clients, whether they are buyers or sellers, are bullish.” There were 21,007 home sales in the four-county metro Milwaukee area in 2016, an increase of 7.1 percent compared to 2015, according to the latest report from the Greater Milwaukee Association of Realtors.

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Despite that positive momentum, GMAR president Mike Ruzicka expressed some uncertainty about the housing market for 2017. “Three months ago, I would have said 2017 would be better (than 2016), but there is so much talk about a possible recession and no one is quite sure what’s going to happen with the Republican-controlled state Legislature, federal government and new president,” Ruzicka said. “The stock market has responded favorably. But who knows about the housing market and the general public?” One of the biggest issues in the residential real estate market across the state in 2016 was the lack of homes for sale in the market. In November, inventory in southeastern Wisconsin was 2.8 months, a three-year low. Six months of inventory (the time it w w w.biztimes.com

takes to sell all of the homes on the market at a given time) is generally regarded as a “balanced” market, in which sellers and buyers are evenly matched in price negotiations. Low inventory levels favor sellers. For the past two years, the GMAR has predicted the first half of 2017 was when the entire metropolitan area would rebound from the Great Recession and home values would be back to where they were in 2007. “People don’t feel as carefree as they did in 2006 and 2007, and that’s probably a good thing; they were a little too carefree and that backfired,” Ruzicka said. Another issue is there are not as many homes being built because mortgage loan requirements from banks are much more stringent than 10 years ago and the construction industry is struggling to find qualified craft workers because of an

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overall construction boom. But more new homes are needed to sustain demand, Ruzicka said. “Younger couples want to move into good school districts and it is difficult finding homes under that $350,000 range,” Ruzicka said. “A lot of buyers have to take advantage of a home immediately. It might not be their dream home, but people are buying something now to get in and then planning to move in a few years. It’s probably a wise strategy because they are building equity and on the rental side, rents are going up.” Ruzicka said he was happy to hear a condo project is planned for Milwaukee’s Third Ward neighborhood. Developer Peter Renner is hoping to develop a 10-unit townhouse project at 610-628 E. Summerfest Place, near the South Gate to the festival grounds. Each unit would be 1,400 square feet. He presented the plan to the Third Ward Architectural Review Board in December and was asked to make some design changes. Since the Great Recession, multi-family housing developers in Milwaukee have shifted their focus from condominiums to apartments. For years, very few new condos have been built in the area. “A condo project is great and it only makes sense,” Ruzicka said. “There is so much demand for condos in this market, I don’t understand why more developers are not moving forward with these projects.” Ruvin, with Coldwell Banker, believes there are a lot of great homes ready to sell that owners are just not quite ready to bring to the market because they are worried the economy isn’t ready, or they won’t find the right home to move into. He has been working with sellers on contingencies to have 30 to 60 days to find another home once they sell, so they can feel comfortable moving. “We do that quite a bit and nine out of 10 times it works out and relieves a lot of pressure on the seller,” Ruvin said. There is also a misconception in the market that the ideal selling season is midto late spring through fall. In reality, most homes sell in January through June, with home sales slowing in July and August when people go on vacation, Ruvin said. “A lot of people wait too long and put their home on the market in March through May and half the selling season is gone already,” Ruvin said. “If they want to sell, I’ve got people in line to buy in January.” n 31

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GOP PLAN TO REPEAL OBAMACARE CREATES UNCERTAINTY FOR FUTURE OF HEALTH CARE INDUSTRY BY BEN STANLEY, staff writer

s Donald Trump’s administration takes office, one thing has been made abundantly clear: the health care industry is going to go through yet another major shake-up. How and when it will happen is less clear. The Affordable Care Act, known colloquially as Obamacare, has been at the center of a debate regarding the national health care industry since it was passed in 2010, and though the Republican-dominated Congress and incoming Republican president have vowed to repeal the health care law, experts say that may be a far more complicated, and economically dangerous, task than it may seem. So what can individuals and businesses expect for the health care industry in 2017 and beyond? “That’s the million-dollar question,” said Jon Rauser, president of the Rauser Agency, a Milwaukee-based insurance broker. “The carriers have all filed their plans and rates with the commissioners in 2017. They did that way back in May. So calendar year 2017 is kind of etched in blood. People who signed up for coverage in the open enrollment period can count on having that covered in 2017. If they repeal the ACA, there’s going to have to be some language in the repeal providing for continued coverage for this year.” There are a few different ways the debate in Congress could play out this year. The Republican-controlled Congress could vote to repeal the law without an immediate replacement, wait until it has a replacement plan it finds more suitable to put in its place and then repeal the ACA, or Congress could do nothing. Given Trump’s campaign rhetoric and promises made by Republicans, it is unlikely Congress will leave the law alone as is. “The Republicans don’t have to, in my opinion, create a new omnibus piece of legislation; they could take the existing legislation and tweak it,” Rauser said. “That would be, in my opinion, far easier. 32

But given all their promises, they’re kind of stuck with (a commitment to a major overhaul).” Scott Adams, a professor of economics at the University of Wisconsin-Milwaukee who served as a senior advisor on President Barack Obama’s council of economic advisors in 2008 and 2009, said he expects at least two major components of the ACA to remain in place under the new administration. “The two things that have been clearly stated by Trump with regard to his health care policy is he wants to keep protection B i zT i m e s M i l w a u k e e

for those with preexisting conditions — and if that’s true, it’s one major success of the ACA that will remain — and he also wants to keep kids on parents’ health insurance until (age) 26,” Adams said. “On the other hand, he wants to get rid of the individual mandate. That’s what keeps a lot of healthy people in the pool and health insurance costs low overall.” What Adams touched on is one example of why many experts believe a complete repeal of the ACA would be close to impossible — it’s so far-reaching and deeply ingrained that taking out one piece

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could set off a chain reaction of negative economic consequences. Using Adams’ example, if the individual mandate portion of the law disappears (the portion which compels every family or individual to have health insurance in lieu of a tax penalty), then it is possible insurance rates could spike dramatically as a result. That’s because the mandate forces young and healthy individuals who are unlikely to file an insurance claim to purchase insurance and pay premiums. Those premiums help the insurance companies compensate for the increase in claims they

will be forced to pay because of the growing number of older, sicker and poorer individuals who were able to obtain insurance through ACA exchanges. The worry is that, if the mandate disappears but other essential aspects of the law remain, then insurance companies would be forced to raise their premiums to compensate for their losses. By the same token, if the law disappears entirely, then millions of people across the country would lose their health insurance and hospitals would take a hit since they are compelled to care for patients regardless of whether they are insured — they would just stop receiving payments for much of the care they provide. That scenario could cause hospitals to raise prices for care on their insured patients to compensate for their losses, which, in turn, could cause insurance rates to rise. “My anticipation is that people, for a short period of time, maybe even a year, would remain on their coverage until something new is put in place,” Adams said. “Repealing it without replacing it,

that raises a whole host of issues. What I see is more likely is Congress using their budget reconciliation authority to chip away a few aspects of the law” that they don’t like. On the business side of things, repealing the ACA could actually benefit large companies but could put small businesses at a long-term disadvantage, even though, in the short term, it would seem they are no longer saddled with rising premiums. “It will be an illusion,” Adams said of the possible short-term benefits. “They’ll feel better off than two years ago, but they’ll be back to a system like it was eight years ago that was untenable.” Premiums would likely rise in the long run in that scenario for small businesses, he said, making coverage too expensive. In response, if a small business decided to cut its benefits packages, it would put the company at a disadvantage to larger corporations in terms of recruiting and retaining talent. Eric Borgerding, president and chief

executive of the Wisconsin Hospital Association, said that in the best case scenario for 2017, the Republicans choose to make significant improvements to the ACA. Worst case scenario, they repeal it entirely or repeal the wrong portions of it without a sufficient replacement plan, he said. “Obamacare has problems,” Borgerding said. “I think people also have to realize that. It’s not like it’s this perfectly welloiled machine that doesn’t need some significant, if not major repairs, regardless of who became president.” From his position with the WHA, he’s most anxious to see what the Republicans decide to do regarding Medicaid payment cuts to hospitals in states that did not accept President Obama’s Medicaid expansion in 2014. Wisconsin was among them. “I’ll be very much watching the Medicaid debate, (including) block grants or other sorts of limitations on funding that the federal government provides to states for Medicaid programs,” Borgerding said. “Wisconsin needs to be treated equitably

in that debate. Just because we rejected the Obamacare expansion, we shouldn’t be penalized as to the amount of funding that comes to Wisconsin under a new Medicaid formula.” From his position as a consumer, Borgerding boiled the health care debate down to a couple main issues. No. 1: Will the Republicans put forth a replacement plan that will be able to sustain the 38 percent reduction in the uninsured rate the nation enjoyed as a result of the ACA? No. 2: What will replace the ACA exchanges, tax subsidies and premium subsidies that have helped low-income people afford health insurance? “Unwinding this thing is going to be very, very complicated,” Borgerding said. “There will be a raging debate on how long it should take to replace Obamacare, and that’s going to precede the actual debate on replacing Obamacare. “The one thing that’s becoming more and more certain is that it will not disappear overnight.” n

SAVE THE DATE! WEDNESDAY, MAY 24, 2017

SHAPING THE FUTURE Manufacturing Matters! 2017 will take place at the Hyatt Regency in Milwaukee on February 23rd, 2017. The theme of this year’s conference is Shaping the Future, and the conference features 18 breakout session in six tracks including: Growth • Operational Excellence • Human Capital Management C-Suite Essentials • Technology & innovation Wisconsin Manufacturing As workforce challenges and trends are on the minds of most manufacturers, we are pleased to announce this year’s keynote presenter is Kip Wright, Senior Vice President of Manpower, North America. Kip will discuss key workforce trends and what manufacturers can do to secure and develop their current and future workforces.

RESERVE YOUR BOOTH! CONTACT LINDA CRAWFORD TODAY! (414) 336-7112 || advertise@biztimes.com

Kip Wright

Senior Vice President of Manpower, North America

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THREE WAYS TO KEEP WISCONSIN’S TECH-BASED ECONOMY ON TRACK

rystal balls can be notoriously cloudy. Just ask all the pollsters who predicted President-elect Hillary Clinton. Given that caveat, here are three of my many hopes for a happy, prosperous 2017 for Wisconsin’s tech-based economy, in no particular order: There will be peace in the (Silicon) Valley: One worry for the tech world is President Donald Trump’s war of words with Silicon Valley. Apple chief executive officer Tim Cook, Facebook founder Mark Zuckerberg and Amazon CEO Jeff Bezos were among tech titans called out by Trump during the campaign over issues such as immigration, off-shore manufacturing, taxes and terrorism. He also questioned the tech industry’s push for an increase in high-skilled H-1B immigration visas. On the other hand, Trump has generally praised entrepreneurs and innovation and spoken directly to the value of aca34

BY TOM STILL, for BizTimes

demic research and development. “Scientific advances do require longterm investment,” he told ScienceDebate. org, a coalition advocating for science to be debated in the presidential race. “This is why we must have programs such as a viable space program and institutional research that serve as incubators to innovation and the advancement of science and engineering in a number of fields.” Such statements did not come with specific positions on federal R&D funding, technology transfer and commercialization, support for startups and small businesses, Internet governance, and reform of the patent system. Trump was basically silent on each, yet all of them matter to Wisconsin. State policymakers in Madison and Washington must watch closely and weigh in. The broadband logjam will be broken in rural Wisconsin: Only California, among the 50 states, will receive more federal dollars than Wisconsin between now B i zT i m e s M i l w a u k e e

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and 2020 to enhance broadband downloads and uploads in places that are isolated and otherwise underserved. About $570 million will be allotted through the “Connect America Fund 2” to three providers – CenturyLink, Frontier and AT&T, in order of competitive grant size – to augment private investments in broadband by those same companies. About 40 percent of the money must be spent by the end of 2017 and 20 percent per year must be put to work in 2018,

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2019 and 2020. The goal is to efficiently bring broadband, at a market price, to about 230,000 Wisconsin homes that don’t have solid access today. Adequate broadband connections can help stem the loss of rural population and jobs. It can enhance e-commerce for businesses large and small, bolster public safety, improve health through telemedicine, boost tourism by encouraging visitors to stay longer, entice millennials to stay put and connected, and improve education for kids who otherwise lose their Internet connections once they leave the school grounds. If this program doesn’t work and attract state government support, rural Wisconsin may lose its last best chance to connect. “BigCos” will invest in southeast Wisconsin: There are solid examples of major companies in Wisconsin investing directly and indirectly in startup economies close to home. In Milwaukee, the next stage should be forming what is commonly called a “fund of funds,” a vehicle for pooling capital and investing in emerging firms. One model in a comparable Midwest city is Cintrifuse. Established by the business community in Cincinnati, Cintrifuse is a nonprofit organization that has created a syndicate fund to invest in venture funds, with an interest in backing young companies in the region and beyond. It has nearly 30 corporate, foundation and academic investors, including Procter & Gamble, Kroger and Western & Southern. It grew out of business community leadership and a sense that Cincinnati’s future rested not only with legacy companies, but with new companies that might arise in their backyards. Milwaukee has that cadre of major companies. It has experienced investors in the angel and small fund end of the venture capital spectrum. Increasingly, it has the right technical talent and ideas. What’s needed is a shared sense of urgency about reinvesting in the city and the region. Wisconsin’s tech sector continues to produce value and jobs, usually at pay scales well above the statewide per capita average. As the state enters a new year, my biggest hope is for more of the same. n Tom Still is president of the Wisconsin Technology Council, which includes the Wisconsin Innovation Network, the Wisconsin Angel Network, and the annual Governor’s Business Plan Contest.

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A Milwaukee Pick 'n Save store.

WISCONSIN RETAILERS HOPE FOR REGULATORY RELIEF

isconsin’s retail businesses are a key component of the state’s economy. Consumers buy groceries, fuel, apparel, hammer and nails, pizzas, tennis shoes and more, driving sales tax collections to the state and providing wages and benefits to the hundreds of thousands of employees in the retail sector. Retail businesses, both small and large, work to provide their customers with the highest quality products at the most competitive prices. One-on-one customer service plays a huge role in building customer loyalty and repeat business. But it’s not that easy. Like many business sectors in Wisconsin, the retail component deals with local, state and federal regulations that drive up the cost of compliance and require more time from employers to deal with regu-

BY BRANDON SCHOLZ, for BizTimes

latory burdens rather than making their businesses flourish. The 2016 election results hopefully will provide some regulatory relief at the state and federal level. Based on President Donald Trump’s statements to date, we expect that Trump will get out his pen and undo most, if not all, of former President Barack Obama’s overreaching executive orders – starting with the overtime pay rule. This should be a no-brainer and a statement of how Obama’s eight-year string of mandates will be dealt with by the new president. Next, working with House Speaker Paul Ryan, Trump should tackle as many tax reform measures as he can. Wisconsin’s main street and retail businesses have many challenges. For example, the robust grocery industry in Wisconsin is known for delivering some w w w.biztimes.com

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of the lowest and most competitive prices for the products it offers. Food deflation is 2016’s biggest economic challenge for grocery stores, as it tightens razor thin margins in the industry. Nevertheless, supermarkets and grocery stores (members of the Wisconsin Grocers Association) in Wisconsin gen-

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erate more than $10 billion in sales, pay more than $825 million in wages and produce more than $700 million in local, state and federal taxes. As more stores come into the state, these numbers are pushed higher and higher. Another face of retail includes 270,200 restaurant and foodservice jobs in Wisconsin, which equals 10 percent of employment in the state. Restaurant sales in Wisconsin are projected to be $8.4 billion in 2016, a growth of 3.6 percent over 2015. Over the next 10 years, the number of restaurant and foodservice jobs in Wisconsin is expected to grow by 9.6 percent, for a total of 296,200. Wisconsin’s petroleum marketers and convenience store owners are independent, family-owned businesses that, in many cases, date back generations and operate nearly 3,000 stores across the state employing more than 50,000 people. Wisconsin convenience stores accounted for more than $11 billion in sales in 2015. While most everyone is pleased that Wisconsin’s unemployment rate is 4.1 percent, the problem retailers have is that they can’t find enough people to fill goodpaying jobs. Many retailers have starting wage rates above the federal minimum wage, competing with each other to fill their workforce needs. Wisconsin should have the right climate to streamline regulations and find ways to continue to make state agencies partners in building a better economy, rather than competitors and regulatory adversaries. The Wisconsin Legislature is wellpositioned to respond positively to the needs of the retail community to grow their businesses and workforce. Federalizing the Family and Medical Leave Act, maintaining the Unfair Sales Act and repealing the personal property tax are great starting points as we head into this 2017’18 legislative session. The state of the retail industry is good and relatively stable, but there is not a single operator who takes that position for granted. A quick downturn in the economy, unexpected increases in costs, a continued workforce drought and no regulatory relief could easily soften this sector of Wisconsin’s economy. n Brandon Scholz is president and chief executive officer of The Wisconsin Grocers Association, which represents nearly 1,000 independent grocers, retail grocery chain stores, warehouses and distributors, convenience stores, food brokers and suppliers.

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BIZTRACKER UPDATE: A

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Private sector job growth in Wisconsin

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M A R K E T

Unemployment rate

(fiscal year ends in September)

(not seasonally adjusted)

SOURCE: U.S. SMALL BUSINESS ADMINISTRATION

Number of homes sold in metro Milwaukee

SOURCE: XCELIGENT

Metro Milwaukee new car registrations

Y O U R

$ Value of SBA loans approved for SE Wis.

SOURCE: WISCONSIN DEPT. OF WORKFORCE DEVELOPMENT

SE Wisconsin commercial real estate vacancy rates

A F F E C T

SOURCE: WISCONSIN DEPT. OF WORKFORCE DEVELOPMENT

Greater Milwaukee single family & duplex building permits

SOURCE: GREATER MILWAUKEE ASSOCIATION OF REALTORS

Milwaukee-area PMI

SOURCE: MTD MARKETING SERVICES LLC

Gen. Mitchell International Airport passengers

(any number more than 50 indicates growth)

SOURCE: MARQUETTE-ISM REPORT NOTE: REPORT SUSPENDED FROM MAY THROUGH SEPTEMBER

SOURCE: WISCONSIN DEPT. OF TRANSPORTATION

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SOURCE: MITCHELL INTERNATIONAL AIRPORT

strategies an ability to receive extraordinary assistance from others and the universe when we take the following four steps:

4 Steps to Receive Help:

To reach your New Year’s goals… Ask for help

any of us have been taught that asking for help or assistance is a sign of weakness. If we haven’t been taught this belief, we have perhaps asked for help in the past and been disappointed from the lack of support we had hoped to receive. This lack of support could’ve been from others or the universe as we define it. As a result of not getting what we had hoped to receive, we felt disappointed and sometimes abandoned. This caused us to not want to be vulnerable again, covering our need for help and pulling our boot straps up. As a result, our new mindset mantra became, “If it’s meant to be, it’s up to me!” This is the battle cry of many people who are goal-oriented. Perhaps striving and driving to reach our goals independently has worked to a certain extent, but how could we have reached our goals in a more efficient and effective

way if we asked for help? Don’t get me wrong: Being strong and independent isn’t bad. In order to reach your goals this new year, it is important to be discerning about: »» When to be strong enough to stand alone. »» Smart enough to know when you need help. »» Brave enough to ask for it. There are times we need to be strong enough to stand alone. This is when we feel strongly convicted about a vision and others may not necessarily support us initially. It takes courage to own our vision anyway. However, it is also smart to know when going it alone is not going to work. Discernment tells us when we must take a deep breath, be vulnerable and ask for help. In many ways, this is harder than doing it alone. As we breathe, we must swallow our pride and humble ourselves w w w.biztimes.com

SUSAN W EHRLEY SUPPORT so others can contribute to us, without us feeling less than or out of control because we did not have all the answers. When we get in the habit of thinking “If it’s meant to be, it’s up to me!” we cut off our ability to receive and ask for help. When we cannot trust anyone else to be there for us or do it as well as us, we develop a Grandiose E.G.O., which Edges our Greatest self Out. This “greatest self ” has

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1) Ask: When we ask specific questions like, “How might I ________?” and stay open-minded, we receive help. Help may come to us in the form of others helping or inspiration. 2) Seek: When we are curious and openminded for your answer to appear, synchronicity occurs. 3) Believe: When we believe wholeheartedly what we asked for will appear in one form or another, we attract to us what now is coming our way. 4) Receive: When we believe, without doubt, we allow possibilities to come our way because we are open-hearted and open-minded. While receiving can be difficult for people who are used to having all the answers or being in charge, it can also make the journey to our goals less stressful. When we learn how to humbly receive help, we create a space for others to play a role in helping us reach our goals. This requires leadership because it is the leader’s task to create the vision, encourage, and engage others to participate in the execution towards the vision and goals. Nothing is more motivating for people than to feel they are a contributor to a vision bigger than themselves. As we learn to ask for help, we begin to realize that asking for help is not a sign of weakness. It takes a confident and humble person to understand that he does not have all the answers, nor can he do it alone. Creating a space for others to step in and demonstrate their greatness means we have gone to the next level of leadership. As a result, we are not only receiving help, we are leading others to reach their full potential by allowing them to contribute their greatness. Challenge: Where could you benefit from receiving help? Are you willing to let go of your “right way” of doing it so others can contribute? n Susan K. Wehrley is a business consultant and coach helping leaders and teams to align to the goals with her ALIGN Business Builder Process. She is also an author of six leadership and empowerment books. Her website is www.BIZremedies.com. She can be reached at: (414) 581-0449 or info@BIZremedies.com.

strategies 9. Who else is the prospect talking to

about this project? 10. Has the project been funded? If not,

when will it be?

Reconnaissance selling

Ask strategic questions to gain valuable information

s a trainer, I’ve learned that sales professionals want to have a competitive edge. They want to help their clients succeed, and faster, but aren’t quite sure what to do differently. Company onboarding programs are often ill designed, and by default, condition sales people to believe that selling is telling. Typical onboarding processes involve product and service training, as well as time to memorize and practice delivering the general capabilities presentation; but little information is provided regarding what questions to ask and what to do with the information that is received. After graduation, sales people are directed to meet with prospects, qualify them and present some portion of the general capability presentation. Unfortunately, this makes for a nice company advertisement, but results in little sales traction. In fact, in some situations, this backfires when the buyer “tunes out” the sales professional and categorizes him as “just another salesman.” Successful sales people know that to differentiate themselves, they must ask thought-provoking questions that cause 38

the buyer to see his situation from a different perspective. This shifts the conversation from the standard sales-speak to focusing on operational bottlenecks, inefficient workflow processes, missed customer expectations and internal politics. The sales person gains important insights into the inner workings of the organization that may include: »» What’s working well at the company? »» Where is the business falling short of expectations? »» Where are the bottlenecks in the organization? »» What’s causing the bottlenecks? »» Who will challenge a change to the status quo? »» What solutions has the organization tried in the past? »» What viable options have been or will be considered? »» What does the organization need to move forward? »» What is the budget? Over the years, I’ve synthesized pages of questions into 10 simple categories. I B i zT i m e s M i l w a u k e e

CHRISTINE McMAHON SALES call these “Reconnaissance Questions” as they are designed to gather strategic information that helps the sales professional assess the situation. Here are the 10 reconnaissance categories: 1. Assess the prospect’s business situation. 2. Determine the scope of the opportunity. 3. Define the desired outcomes. 4. How willing is the prospect to change from what she is doing now? 5. Where is he in the buying process? 6. Who makes the decision and what is the approval process? 7. What is her sense of urgency and timeline? 8. Does your company have the capacity to deliver what the prospec wants/ needs?

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Under each category, develop your list of questions. For example, under “Assess the Business Situation” you might write, “What top two business decisions will you need to make this year and how will this impact the organization?” or “If you could improve one aspect of your business that will immediately create value for your clients, what might that be?” It’s advantageous for the entire sales team to complete this activity by themselves initially, and then come together as a group to share their respective lists. Simple case studies that reflect your range of clients will help turn this exercise into a realistic activity by asking them to create the list of questions that they would ask on the first call. Then, working in smaller teams, ask the group to anticipate what responses they might receive from prospects and how to handle that response. If they are uncertain, the sales manager should offer guidance. This will help the sales person retain their cadence during a live prospect meeting. By asking reconnaissance questions, sales professionals gain insider’s information, they learn the prospect’s language, and better understand how decisions are made. This leads to one of the most important outcomes, which is the speed in which trust is built. The refreshing and sometimes profound dialogue that unfolds can cause a buyer to assume your competency and even ask for assistance in how to position your offering to the committee and how to respond to committee member inquiries, resistance points and comparison to competitive offers. When possible, it’s good practice to conduct a dress rehearsal or mock discussion to prepare your buyer so he can respond with grace. If your goal is to fill your sales pipeline with viable qualified prospects and accelerate the buying process, become a master at asking reconnaissance questions. You will differentiate yourself in the best possible way while getting the inside scoop on how your customer buys. This will help accelerate the sales process and position you as the true trusted advisor. n Christine McMahon provides strategic sales and leadership coaching and training. She is co-founder of the Leadership Institute at Waukesha County Technical College’s Center for Business Performance Solutions, and can be reached at (844) 369-2133 or ccm@christinemcmahon.com.

strategies

Stop, start, continue A model for beginning the new year

anuary is upon us. The first month of a new year always triggers my thinking about Janus, that Roman god of beginnings and transitions. He is pictured as having two faces, one looking to the past and one looking to the future. A new year is a time that many, if not most, of us reflect on the past year and think about the changes we want to incorporate into the new one. When coaching teams, it is helpful to use tools to organize this reflection process. The 360 feedback system can facilitate positive change if administered in the right environment and with the right care. It takes a big investment of time and money to do it right. Even then, it can cause more anxiety than inspiration for professional growth. As one employee said, “Oh great, now I have 15 people telling me how I screwed up.” Looking forward to 2017, I thought about changes I want to make in my own life, professional and personal. I chose to use the “quick and dirty” Stop Start Continue model, which has been very helpful in working with teams. I thought, “Let’s see how this works for shaping my own choices for behavioral change.” It was helpful and brought simplicity and focus to the process – which is still going on as I write. So, I thought I’d pass it on to you. I began with giving myself some reflection time to think about what I’ve been doing in my coaching practice. What is not working so well? The answers will form the list of what I should stop. You can always ask for feedback from your reports or your clients, but I think if we are honest with ourselves, we can come up with the list on our own. It might be something simple and something you’ve told yourself to stop many times before. It might be

talking too much and listening too little. Next, reflect on what you should start. You probably can answer this on your own as well. In my case, I want to start beginning each coaching call with a healthy review of the last call. I believe that will serve my clients better and provide continuity in the coaching. You will have your own list, probably generated from slips of thoughts you’ve had many times but never turned into action. What do you want to continue? These are probably your best practices. Perhaps you believe you have no need to reflect on these. The thing is, most of us are not really good cheerleaders for ourselves. If someone excels in metrics, she thinks it is easy and everyone could do as well. We do need self-recognition. This is where you pat yourself on the back and recognize your strengths, with honesty and pleasure. Do not be afraid of becoming conceited – it won’t spring up from your honest evaluation. As I mentioned above, I used the same Stop Start Continue model in looking at my personal life also, looking at relationships, family and social activities as well as self-care. In team coaching, I always directed individuals to write out the lists for each other and pass them through to me for “sanitizing” so the feedback was delivered with anonymity. Members were encouraged to avoid getting hung up on who said what, and they usually focused on the value of the feedback instead. I did not know how it would work with one individual giving and receiving the feedback. I found it useful and more structured than creating a list of New Year’s resolutions – which has never been an efw w w.biztimes.com

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it helpful for you as you enter the new year. Feel free to change the model into one that fits the outcomes you want in 2017 and beyond. n

COACHING fective change mechanism for me. I hope you play around with the model and find

Jo Gorissen is a certified transition coach and a former Milwaukee-area resident. She can be reached at jgorissen1@gmail.com.

MARQUETTE UNIVERSITY CENTER FOR REAL ESTATE

2017 WISCONSIN RESIDENTIAL REAL ESTATE SUMMIT

Join us for an overview of economic conditions in the housing industry across the United States. Speakers: Dr. David Clark, Marquette University Keynote — Dr. Robert Dietz, National Association of Home Builders

Panel: A professional take on buying and renting decisions moderated by David Stark, Stark Company Realtors, with panelists Jonathan Lawless, Fannie Mae; John Horning, Shorewest Realtors; David Belman, Belman Homes; Robert Dietz, NAHB.

Thursday, Feb. 2, 2017 8:30 – 11:30 a.m. Wisconsin Club, 900 W. Wisconsin Ave. Register online by Jan. 30 at go.mu.edu/resummit2017.

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Gold sponsors: TM

Wisconsin REALTORS Association ®

Media sponsor:

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biz connections CA L E NDAR

NONPROFIT DIRECTORY

The West Bend Area Chamber will host Business After Hours on Wednesday, Jan. 25, from 4 to 6 p.m. at Commerce State Bank, 1700 S. Silverbrook Drive in West Bend. The networking event is free for chamber members. For more information or to register, visit www.wbachamber.org/events.

SPOTLIGHT

The Menomonee Falls Chamber of Commerce will host its Annual Awards Banquet on Thursday, Jan. 26, from 5 to 8 p.m. at Marcus Menomonee Falls Cinema’s Take 5 Lounge & Auditorium, W180 N9393 Premier Lane in Menomonee Falls. Cost is $50 per person or $400 for a reserved row of eight. For more information or to register, visit www.fallschamber.com/events. The Waterford Area Chamber of Commerce will host its Annual Recognition and Awards Event on Thursday, Jan. 26, from 5:30 to 8:30 p.m. at Marty’s Restaurant, 201 W. Main St. in Waterford. The event will recognize the business members and volunteers who contributed to the overall betterment of the chamber in 2016. The Entrepreneur of the Year, Community Impact Award, Leadership Award, Volunteer of the year, President’s Award and Special Director’s Award will be given out. Cost is $25. For more information or to register, contact the chamber at 262-534-5911. The Muskego Area Chamber of Commerce & Tourism will host Business After Hours on Tuesday, Feb. 7, from 5:30 to 7 p.m. at Allstate Insurance-Steve Schreck Agency, W189 S7765 Racine Ave. in Muskego. The event will include networking, food, drinks and a door prize. Cost is $5 for chamber members and $7 for non-members. For more information or to register, visit See the complete calendar of www.muskego.org/events. upcoming events & meetings.

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BIZ NO T ES Jannsen Wealth Management Waukesha-based Jannsen Wealth Management was recognized as a Two Diamond Eagle firm for its extraordinary achievements throughout the year at the 2016 1st Global National Conference. The Diamond Eagle award is based on business volume across the firm and is given to those firms that have consistently demonstrated 1st Global’s purpose of enabling intentional living and have cultivated their practices in ways that help their clients seek to live intentionally in their own lives, as well. Jannsen Wealth Management was honored for its devotion to serving its clients through comprehensive financial planning advice. 1st Global is a research and consulting partner that provides CPA, tax and estate planning firms with the education, technology, business-building framework and client solutions that make these firms leaders in their professions through dedicated professional client relationships built around wealth management.

TEKLYNX International Milwaukee-based TEKLYNX International, the world’s leading barcode and RFID labeling software developer and solutions provider, has earned a place on Food Logistics’ esteemed 2016 FL100+ Top Software and Technology Providers list for the second consecutive year. The selective list, included in the November/December 2016 issue of Food Logistics magazine, features software and technology providers whose products and services are critical for companies in the global food and beverage supply chain. For decades, TEKLYNX has helped food and beverage companies streamline labeling operations while staying

ahead of current industry specific regulations such as the Produce Traceability Initiative, Food Safety Modernization Act, and Food Information for Consumers, as well as emphasizing nutrition facts and allergens.

Kondex Corp. Lomira-based Kondex Corp., a manufacturer of cutting and wear-resistant components, was recently recognized by the Association of Equipment Manufacturers (AEM) as a recipient of its 2016 Pillar of the Industry Award, a merit that highlights companies’ gold-level status participation in AEM’s I Make America program. Winning this award for the fifth consecutive year further distinguished Kondex as a legacy supporter, a recognition shared with only five other companies. To achieve gold status, Kondex participated in various activities throughout the year to help support the people and communities of the equipment manufacturing industry. In addition to meetings and correspondence with elected officials regarding pro-manufacturing legislation, the company hosted two on-site events with AEM: a community I Make America tour stop in July, as well as a visit from U.S. Rep. Glenn Grothman on Manufacturing Day. AEM is the North American-based international trade group providing innovative business development resources to advance the off-road equipment manufacturing industry in the global marketplace.

First ever direct flight to Portland, Oregon added at Mitchell Alaska Airlines is adding a seasonal direct flight between Milwaukee and Portland, Oregon that will

To have your business briefs published in a future issue of BizTimes Milwaukee send announcements to briefs@biztimes.com.

B i zT i m e s M i l w a u k e e

Community Warehouse Inc. 521 S 9th St., Milwaukee WI 53204 414-383-7792 | thecommunitywarehouse.org Facebook: www.facebook.com/Community-Warehouse-146314992080074/ Year founded: 2002 Mission statement: Community Warehouse exists to glorify the Lord Jesus Christ by serving the neighborhoods and nonprofits of Milwaukee. We provide people in the Milwaukee community with home and facility improvement materials, significantly improving the quality of life in our neighborhoods. Primary focus of your nonprofit organization: We are a membership organization with members consisting of residents, property owners and nonprofit organizations near our locations. We currently primarily serve the Milwaukee Designated Redevelopment Zone. Other focuses of your nonprofit organization: We provide background-challenged individuals employment opportunities. Number of employees at this location: 18 Key donors: Lynde and Harry Bradley Foundation; Bader Philanthropies; Zilber Foundation; M&I Foundation; Kaztex Foundation; WE Energies Foundation.

Executive leadership: »» Nick Ringger, CEO »» Britt Ayling, VP Procurement and Development Board of directors: Roz Babener, board chair emeritus and founder; Jeffrey Weitz, board chair, North Rim Partners; Wick Ashley, Ashley Realty Works with ReMax Equity Group; Bill Benjamin, Pacific Crest Securities; Bill Bourque, The Greenbrier Companies (retired); Frank Grady, Grady Britton; Marc Jolin, A Home For Everyone; Catherine Myers, University of Portland; Darrell Nelson, NW Natural; Nicholas Shepherd, Irvine and Company CPA's; Megan Smith, Bradley Angle; Mark T Waller, BridgeWorks Capital; Claudia Wilson, nurse consultant; John Witherspoon, Buckley Law P.C. Is your organization actively seeking board members for the upcoming term? No. Ways the business community can help your nonprofit: Provide employment opportunities to Community Warehouse employees ready to transition to a full-time position. Donate new goods or provide funds for our mission. Key fundraising events: TTT (Tale, Truck, Tour)

Get the latest nonprofit news delivered in your inbox every Friday. Sign up for BizTimes' Nonprofit Wekly at biztimes.com/subscribe operate between June 5 and Aug. 26. It’s the first nonstop flight ever to be offered between the two airports, according to Milwaukee County Executive Chris Abele. “Oregon is a dynamic destination, and these new nonstop flights will be a big hit among travelers from Wisconsin and northern Illinois,” Abele said in a statement. “Portland has never been offered nonstop from MKE before, and this announcement

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is a testament to the outstanding partnership between Milwaukee County and Alaska Airlines.” The flights, which will depart General Mitchell International Airport at 7:15 a.m. and arrive at Portland International Airport at 9:47 a.m., will operate daily during the summer months on Wi-Fiequipped Embraer E175 jets. The jets can seat as ....................... BIZ NOTES continued on page 42

biz connections PER SO NNE L F I L E

■ Building & Construction PPC Partners Inc., New Berlin, announced the addition of Matt Lutz as executive vice president. In his new role, Lutz will lead strategic planning for the organization, as well as oversee mergers and acquisitions and business and administrative support needs.

■ Banking & Finance Stephanie Omdoll was named the chief administrative officer of Milwaukee-based Potawatomi Business Development Corp. the investment arm of the Forest County Potawatomi Community. Omdoll has been with PBDC for more than two years, previously serving as director of communications.

Amina Penasa was named a new broker at Sunbelt Business Brokers-Milwaukee. She has more than 15 years of experience in business management, sales management, sales, negotiations, relationship management and finance.

■ Food Service Menomonee Falls-based Davians announced that it has named Ben Hudson its first executive chef. Hudson joined Davians in 2014 as executive chef of the re-opened Brown Bottle restaurant at Schlitz Park in Milwaukee. Brown Bottle sous chef Bergen CarlsonPrice succeeds Hudson as executive chef at the restaurant. Carlson-Price joined Hudson at the Brown Bottle in 2014.

■ Insurance Margie Raguia was added to the team at Milwaukee-based Robertson Ryan & Associates, Milwaukee. She has 20 years of commercial lines insurance experience. She has her Certified Insurance Services Representative designation and is active in the Professional Insurance Agents of Wisconsin through committee work and special projects. She is a customer service representative in

Submit new hire and promotion announcements to www.biztimes.com/submit/the-bubbler

RRA’s Waukesha office.

■ Legal Joshua M. Engelkemier, Ph.D., joined Michael Best’s Milwaukee office as a patent scientist in the firm’s Intellectual Property Practice Group and Life Sciences Industry Team. Engelkemier assists clients with the preparation and prosecution of patent applications in the chemical, material and life sciences, as well as contributing to freedom to operate and patentability opinions. Godfrey & Kahn S.C., Milwaukee, has elected Peter Wilder to shareholder. Wilder is a member of Godfrey & Kahn’s Banking & Financial Institutions Practice Group. He assists banks, mortgage banks and other finance companies with mergers and acquisitions, branch sales, vendor contract negotiations, capital raises, mortgage regulation, consumer finance laws, and other regulatory and compliance matters. Hansen Reynolds LLC, Milwaukee, announced that Mike Lueder has joined the firm’s Milwaukee office as a partner. Prior to coming to Hansen Reynolds, Lueder was a partner at Foley & Lardner LLP, where he founded and chaired that firm’s Consumer Financial Services Litigation practice group.

■ Marketing & Public Relations Scott Carlson joined Milwaukee-based Zizzo Group as art director. In his new role at Zizzo Group, Carlson will be working collaboratively with the creative and integrated marketing teams to create innovative, targeted solutions for a wide range of clients. Previously, Carlson worked in Madison and Milwaukee in a number of art direction and design roles. The Roberts Group promoted Erin Wainscott to account manager. In her new role, Wainscott will support the account executive and facilitate projects by serving as a w w w.biztimes.com

liaison between account executive and creative, production and media.

ville, Florida.

EPIC Creative, West Bend, hired Erin Puariea to its account management team. In her new role as senior account manager, Puariea will be responsible for managing marketing programs for agency clients – focusing on strategic planning, budgets and timelines. Prior to joining EPIC, Puariea served as the managing director for Taste of Home LIVE, where she developed and oversaw consumer-facing strategies, communications and event programs.

named the new president of Inspiration Ministries in Walworth. He will provide strategic leadership and vision to all aspects of the ministry for the residential care community of physically and cognitively disabled adults. Barber previously worked for Holy Family Memorial and the Aurora Health Care Foundation.

■ Nonprofit

Rainey

Allen

YWCA Southeast Wisconsin appointed Steve Stall, business segment leader at Rockwell Automation; Manadra Rainey, community relations manager for the Milwaukee Center for Independence and Deborah Allen, former president of Nevada Corp., to its board of directors. Near West Side Partners Inc., Milwaukee, hired Lindsey St. Arnold Bell as an associate director. She will assist NWSP executive director Keith Stanley in implementSt. Arnold Bell ing programs that benefit the seven Near West Side neighborhoods in the areas of housing, safety, commercial corridor development and overall neighborhood perception. The Milwaukee Art Museum hired Casie Simpson as creative director. In this newly created role, Simpson will work with the museum’s leadership team to develop a comprehensive brand identity that will captivate and engage museum audiences and deepen community connections. Simpson was previously the creative director for the Museum of Contemporary Art in Jackson-

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B i zT i m e s M i l w a u k e e

Erik Barber has been

■ Professional Organizations The Waukesha County Business Alliance announced the addition of Kathleen Schwind as a new inside sales associate. Schwind’s role will be to grow the Alliance as a memberdriven organization. Responsibilities include outreach to organizations that want to do business in Waukesha County.

■ Professional Services Jon Clapper joined Hastings Air Energy Control Inc., New Berlin, as project manager. Hastings designs custom engineered air quality solutions that allow clients to conserve energy, reduce costs and increase worker safety. His responsibilities include developing business processes around equipment installations and managing large project installations with the Hastings team, contractors and clients. He has an extensive career in facility engineering, project management and business/operations management.

■ Senior Living

Bandkowski

Panzer

Luther Manor, Wauwatosa, hired Amanda Bandkowski as manager of adult day programs, including The Academy @ Luther Manor and the Lakefield Adult Day Program. Additionally, Betsy Panzer was hired as a marketing specialist.

biz connections SB A L O AN S The U.S. Small Business Administration approved the following loan guarantees in December:

Kosher Meat Klub Inc., 4731 W. Burleigh St., Milwaukee, $378,000;

Ananda Marketing LLC, 916 Mulberry Lane, Kohler, $342,000;

Kosher Meat Klub Inc., 208 E. Capitol Drive, Milwaukee, $156,000;

Anita's Gardens of Grafton, 1900 Arborview Drive, Plymouth, $250,000;

Jefferson County

Lynn Precious Moments LLC, 5629 N. 91st St., Milwaukee, $250,000;

Fleurette LLC, 1112 Plankview Green, Sheboygan Falls, $20,000;

Maaco Collision, 7516-7528 N. Teutonia Ave., Milwaukee, $212,000;

Walworth County

Galioto Towing LLC, 205 Wilmont Drive, Waukesha, $100,000;

B.J. Gill’s Enterprises LLC, Walworth County Tax Parcel K, Elkhorn, $3.6 million;

Gehrke Transport LLC, W328S4025 Llanfair Court, Dousman, $63,000;

Oakfire Pizzeria and Restaurant, 831 Wrigley Drive, Lake Geneva, $1.2 million;

JMB & Associates LLC, N50 W13906 Overview Drive, Menomonee Falls, $5 million;

Washington County

Jx2 Inc., 127 E. Wisconsin Ave., Oconomowoc, $150,000;

Rock River Laboratory, Inc., 710 Commerce Drive, Watertown, $350,000; Specialized Freight Solutions LLC, 110 E. Lake St. Ste. 5, Lake Mills, $20,000;

Kenosha County Ghulem LLC, 52nd St., Kenosha, $440,000; Lakefront Fitness LLC, 14th Ave., Kenosha, $100,000; Leeward Holdings Corp., 7528 Pershing Blvd. Ste. B, Kenosha, $75,000; Mars Cheese Castle Inc., 2800 W. Frontage Road, Kenosha, $2.6 million; Mielke Stair Company LLC, 1203 Pryor St., Silver Lake, $75,000; Terry Atwater II, 5718 52nd St., Kenosha, $956,000;

Milwaukee County 4616 W. Hampton Holdings, LLC, 4616 W. Hampton Ave., Milwaukee, $1.1 million; Agility Holdings LLC, 7839-7901 W. Clinton Ave., $2.2 million; Agility Holdings LLC, 1555 Rivercenter Drive, Milwaukee, $3 million; AM Construction Services Inc., 4600 W. Mitchell St., West Milwaukee, $289,000; Carlson & Kagan LLC, 249 E. Hampton Road, Milwaukee, $20,000; DP Dough MKE LLC, 1515 E. North Ave., $714,000; Homesealed LLC, S. 108th St., West Allis, $250,000; JCP Construction LLC, Martin Luther King Drive, Milwaukee, $500,000;

RokkinCat LLC, 299 E. Wisconsin Ave., Suite 1200, Milwaukee, $150,000; Spring City Aviation East LLC, 9305 W. Appleton Ave., Milwaukee, $785,000; Vega’s Drywall, 5368 S. 25th St., Milwaukee, $91,000; World Care Transit Service LLC, 4685 W. Bradley Road, Milwaukee, $131,400;

Ozaukee County Hometown Car Care LLC, 1220 Washington Ave., Cedarburg, $401,000; Sullivan Food Service Inc., 323 N. Franklin St., Port Washington, $575,000; The Bireley Family Cars Inc., 8825 W. Daventry Road, Mequon, $75,000; Traditions Pub, 501 County Road H, Fredonia, $234,000;

Racine County Blazei Investments, Inc., 7910 S. Loomis Road, Wind Lake, $60,000; Eagle Disposal Inc., 21107 Omega Circle, Franksville, $300,000; Hitters Baseball LLC, 2915 6 1/2 Mile Road, Caledonia, $178,000; Skyline Landscape Design LLC, 34111 Oak Knoll Road, Burlington, $121,500; Skyline Landscape Design LLC, 34111 Oak Knoll Road, Burlington, $25,000; Union Grove Piggly Wiggly Inc., 67th Drive, Union Grove, $450,000;

Sheboygan County

Accord Manufacturing Inc., N172W20950 Emery Way, Jackson, $300,000; East Side Lumber Co. Inc., 200 1st St., Hartford, $120,000; Karthauser & Sons Inc., W147 N11100 Fond du Lac Ave., Germantown, $100,000; Pure Aveda Salon & Spa of Slinger Inc., 1183 E. Commerce Blvd., Slinger, $150,000;

Waukesha County Baumgartner Holding Inc., W249N5245 Executive Drive, Sussex, $203,000; Brookfield Dental Care, 17600 W. Capitol Drive, Brookfield, $943,000; Dealer First F&I Advocates LLC, N287W6236 Blackhawk Drive, Hartland, $75,000; DeMars & Associates Ltd., 507 N. Grand Ave.,

Waukesha, $397,000; EJP Corp., 2566 Sun Valley Drive, Delafield, $208,800; Galioto Collision LLC, 205 Wilmont Drive, Waukesha, $725,000;

LaBelle Golf Club LLC, W389 N6996 Pennsylvania St., Oconomowoc, $150,000; Newest LLC, 531 W. Newhall Ave., Waukesha, $645,000; Small Ocean LLC, 1217 W. Washington Ave., Oconomowoc, $50,000; Snow Patrol, 1950 S. Springdale Road, New Berlin, $510,000; SunAnt Interactive LLC, 13414 Watertown Plank Road, Elm Grove, $127,500; The Mosaica Group LLC, N53 W24615 S Corporate Circle, Sussex, $3.6 million; The Rankin 4 Inc., 300 High St., Brookfield, $256,000; Thomas Orthodontics, S.C., N94W17900 Appleton Ave., Menomonee Falls, $100,000.

BIZ NOTES................................. from page 40 many as 76 passengers. Return flights will leave Portland at 11:10 p.m. and arrive in Milwaukee at 5:02 a.m. “Until now, Milwaukee was one of the top 10 markets to which Portland didn’t have nonstop service,” said David Zielke, director of air service development for the Port of Portland, which oversees the Portland International Airport. “As a University of Wisconsin graduate, I am particularly

excited by this new nonstop route. “Go Badgers!” he added. The added flight comes as traffic at Mitchell International continues to climb. Through Nov. 30, 2016, passenger traffic at the airport had increased 3.27 percent to 6,244,680 compared to the first 11 months of 2015. The airport’s passenger traffic statistics for December have not yet been released.

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B i zT i m e s M i l w a u k e e

biz connections

n GLANCE AT YESTERYEAR VOLUME 22, NUMBER 22 JANUARY 23 - FEBRUARY 5, 2017 126 N. Jefferson St., Suite 403, Milwaukee, WI 53202-6120 PHONE: 414-277-8181 Fax: 414-277-8191 WEBSITE: www.biztimes.com CIRCULATION E-MAIL: circulation@biztimes.com ADVERTISING E-MAIL: ads@biztimes.com EDITORIAL E-MAIL: andrew.weiland@biztimes.com REPRINTS: reprints@biztimes.com PUBLISHER / OWNER

Dan Meyer dan.meyer@biztimes.com DIRECTOR OF OPERATIONS

Mary Ernst mary.ernst@biztimes.com DIRECTOR OF STRATEGIC INITIATIVES

Jon Anne Willow jonanne.willow@biztimes.com

EDITORIAL EDITOR

Andrew Weiland andrew.weiland@biztimes.com MANAGING EDITOR

Molly Dill molly.dill@biztimes.com REPORTER

Corrinne Hess corri.hess@biztimes.com REPORTER

Arthur Thomas arthur.thomas@biztimes.com REPORTER

Ben Stanley ben.stanley@biztimes.com

SALES & MARKETING DIRECTOR OF SALES

Linda Crawford linda.crawford@biztimes.com BUSINESS DEVELOPMENT EXECUTIVE

Maribeth Lynch mb.lynch@biztimes.com ACCOUNT EXECUTIVE

Molly Lawrence molly.lawrence@biztimes.com ACCOUNT EXECUTIVE

Maggie Pinnt maggie.pinnt@biztimes.com ACCOUNT EXECUTIVE

Christie Ubl christie.ubl@biztimes.com

PRODUCTION & DESIGN GRAPHIC DESIGNER

Alex Schneider alex.schneider@biztimes.com ART DIRECTOR

Shelly Tabor shelly.tabor@biztimes.com

Glass blowers This photo is believed to show glass blowers at William Franzen & Son around 1900. The company was originally called Northern Glass Works. Located at 2300 S. Chase Ave. on Milwaukee’s south side, the business made glass bottles primarily for Milwaukee breweries. It went out of business during Prohibition. — This photo is from the Milwaukee Public Museum’s Photo Archives collection. Additional images can be viewed online at www.mpm.edu.

Independent & Locally Owned — Founded 1995 —

COMME NTA R Y

No end in sight to Bon-Ton’s struggles

hope you didn’t buy stock in Bon-Ton Stores Inc. in March of 2007. At the time, the company’s stock price was $56.24. As I am writing this, Bon-Ton’s stock price is at $1.36. That’s about what the stock was priced at in January of 2009, in the midst of the Great Recession. BonTon’s stock price rebounded to $21.29 in April of 2013, but has pretty much been in steady decline since. Bon-Ton is the parent company of Boston Store, an iconic department store brand in the Milwaukee area. The company has dual corporate headquarters in downtown Milwaukee and York, Pennsylvania. Bon-Ton operates 267 stores in 26 states under the Bon-Ton, Boston Store, Bergner’s, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates. Like many department stores these days, the Bon-Ton stores are struggling in a changing retail environment in which consumers are increasingly doing their shopping online, especially at Amazon. 44

com, and are spending less time and money at traditional brick-and-mortar stores. Bon-Ton has not turned an annual profit since 2010. The company reported a net loss of $7 million in 2014 and it got much worse in 2015, with a net loss of $57.1 million. It reported $108.1 million in net losses through the first three quarters of 2016. Its 2016 performance will no doubt look better after the fourth quarter results come in. The fourth quarter is when retailers make hay and Bon-Ton reported a fourth quarter profit of $57.1 million in 2015, but that was down from $71.7 million in profit for the fourth quarter of 2014. It’s no surprise, then, that the company’s stock price is so low. Bon-Ton brought on a new CEO, Kathryn Bufano, in 2014 in hopes that she could turn around the company. Bufano has an impressive retail background. Previously, she was president and chief merchandising officer of Belk Inc., a CharB i zT i m e s M i l w a u k e e

lotte, N.C.-based department store chain. But the company’s struggles continue. Bon-Ton recently reported a $32.3 million drop in total sales during the holiday season. I bring all of this about Bon-Ton up because City of Milwaukee officials are proposing a $1.9 million subsidy to BonTon if the company will maintain its downtown Milwaukee headquarters operations and keep the downtown Boston Store open through 2028. The city in 2014 provided a $1.2 million subsidy to the company to keep the headquarters and store open downtown through 2018. It is understandable that city officials want to keep Bon-Ton and Boston Store downtown, because they provide 750 jobs there. But you have to wonder if this is a good long-term investment of public funds, considering the company’s obvious struggles. Despite the incredible growth of Amazon and the losses suffered by Bon-Ton

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ANDREW WEILAND Editor BizTimes Milwaukee

and other traditional department stores, brick-and-mortar retail clearly is not dead. Numerous new retail developments are under construction throughout the Milwaukee area. In the digital age, retailers need to find new ways to get shoppers in the doors of their brick-and-mortar stores. They must enhance the in-store shopping experience. Last year, Bon-Ton renovated the downtown Boston Store and added a furniture department. But when are more shoppers going to return to that store? The downtown area is booming, with several new apartment developments. If downtown residents want shopping options nearby, they need to support the stores in the neighborhood, like Boston Store. n

BIZTIMES AROUND TOWN n

biz connections

Professional Women’s Development Network

9 w w w.biztimes.com

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Laura Pagel, Kelly Christiansen and Katie Stensberg of The Roberts Group.

Kim Stephens of Remedy Now and Krista Morrissey of Choices Coaching & Consulting LLC.

Suzanne Kelley of the Waukesha County Business Alliance with Maria Pandazi, Jennifer Andrews and Sally Kahlfeldt, all of the City of Waukesha.

Amanda Balistreri, Amanda Wondra and Emily Swiecichowski, all of Schenck SC, with Jan Grimm of Ixonia Wealth Management.

Jenny Walmer of Wisconsin Title, Closing & Credit Services, Patti Kennedy of Confident Shooting Instruction LLC, Maggie Lipski of Bank Mutual and Maggie Guynn of Bank Mutual.

Liz Schickles of The Novo Group, Sharon Boudro of Weather-Tek Design Center and Connie Siebenaller of The Novo Group.

Kathy Price of the University of Wisconsin-Milwaukee and Lisa Raebel of The Novo Group.

Kristin Knitter of U.S. Cellular and Rachel Lloyd of Glenroy Inc.

The Professional Women’s Development Network motivates and encourages women by celebrating the unique contributions women bring to business.

B i zT i m e s M i l w a u k e e

Photos by Molly Dill

The Waukesha County Business Alliance recently hosted a Professional Women’s Development Network luncheon at Western Lakes Golf Club in Pewaukee. Barbara Thompson, president and chief executive officer of The Roberts Group Inc., gave the address, “Spark the Chain Reaction of Gratitude,” about using gratitude to generate a healthier organizational culture.

ERICH SCHROEDER PHOTOGRAPHY

the last word

How to create an engaged workforce More than ever, businesses need to go the extra mile to keep their best employees engaged and retain them as a part of the organization long-term. Here, West Bend Mutual president and CEO Kevin Steiner shares his company’s strategies to build a culture of employee engagement. “Every year at West Bend Mutual Insurance, we honor our ‘legacy’ employees who have chosen to stay with the company for an extended period of time. There are currently 235 members of what we call our “25 Year Club.” These are employees who’ve been with the company 25 years or more and include retirees. We recently added 12 new members to the club, bringing the total number of members currently employed to 160. “The reasons for why someone chooses to stay with an organization more than 25 years may vary among individuals. However, there are basic principles we strive to 46

maintain as a company in an effort to build a culture of employee engagement, which include: »» Maintaining transparent top-down communications: This means effectively communicating with employees and fostering an understanding of their role in the organization’s overall success. »» Community engagement: Being involved in the community through philanthropic or volunteer efforts is a great way to engage employees with coworkers and the community. »» Mentoring: Setting up a formal mentor program underscores our commitment to developing and keeping talent. »» Fostering a family environment: It’s important to make the office a place that people want to come to, which means fostering a welcoming environment that celebrates personal and group achievements.

B i zT i m e s M i l w a u k e e

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Kevin Steiner President and CEO West Bend Mutual Insurance Co. 1900 S. 18th Ave., West Bend Industry: Property and casualty insurance Employees: More than 1,000 www.thesilverlining.com

“The result of our efforts to take these steps at West Bend has been retention of long-tenured associates with valuable knowledge and experience. It’s also contributed to our successful recruitment of new associates. Both contribute to our success and it can do the same for your organization.” n

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