BizTimes Milwaukee | July 25, 2016 by BizTimes Media

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SLOW BUT STEADY

MID-YEAR ECONOMIC FORECAST ALSO IN THIS ISSUE:

SOME LONG-AWAITED PROJECTS WILL BREAK GROUND BY END OF YEAR HEALTH CARE MOVES TOWARD PREVENTATIVE MODEL AMID INDUSTRY SHAKE-UPS WISCONSIN EXPORTERS COULD SEE ‘BREXIT’ FALLOUT FOR YEARS TO COME

100 PERCENT ORGANICALLY GROWN WISCONSIN COMPANIES

FUTURE 50 AWARDS LUNCHEON Keynote Speaker:

Christine Specht

president & ceo, cousins subs

“Cousins Subs is a Wisconsin-based brand with 40+ year-old roots in the Milwaukee community. We owe much of our success to our local heritage and the hardworking, industrious people that reside in the area we call home.” The Future 50 Program was created by MMAC’s Council of Small Business Executives to recognize top local firms that are growing in revenue and employment.

Friday, September 23, 2016

11:30 AM - 1:30 PM

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inside

July 25 - August 7, 2016 HIGHLIGHT S Made in Milwaukee

ibMilwaukee addresses unique challenges while employing the blind.

In the Neighborhood

Broadway Paper thrives on wedding invitations, return to paper goods.

Biz News

Home medical equipment suppliers dreading Medicare reimbursement cuts.

Biz News

Candidates gain leverage in hiring process as economy improves.

Innovations 13 Essential biotechnology moves toward clinical trials for cancertreating drug.

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

MID -Y E A R E CONOMIC FOR E CA S T

COV E R S T ORY

Slow but steady Mid-Year Economic Forecast

In addition to the cover story, coverage includes a Q&A with economics professor Dr. Abdur Chowdhury of Marquette University, the MMAC forecast for the third quarter, a report on local stock performance, a look at technology in manufacturing, an analysis of how the bumpy oil and gas market impacts local companies, commercial and residential real estate outlooks, an analysis of the local “Brexit” impact, a report on health care’s shift to preventative care and an update on the heavy banking merger activity.

S TR ATE GIE S Leadership Dennis Ellmaurer 30 Sales Jerry Stapleton 31 Family business David Borst 32 BIZ CONNECTIONS Calendar 33 Personnel File 34 SBA Loans 35 Glance at Yesteryear 38 Commentary 38

V I S I T B I Z T I M E S . C O M F O R A D D I T I O N A L S T O R I E S , D A I LY U P D AT E S & E - N E W S L E T T E R S Editorial . . . . . . . . . . . . 414-336-7120 Advertising . . . . . . . . . 414-336-7112 Subscriptions . . . . . . . 414-277-8181 Reprints . . . . . . . . . . . . 414-277-8181

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

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BizTimes Milwaukee (ISSN 1095-936X & USPS # 017813) Volume 22, Number 9, July 25 - August 7, 2016. BizTimes Milwaukee is published bi-weekly, except two consecutive weeks in December (the third and fourth 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 2016 by BizTimes Media LLC. All rights reserved.

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leading edge NOW

Husco to end off-highway production in Waukesha

usco International will shut down production for its off-highway business in Waukesha, moving work to other facilities and potentially eliminating 100 positions. The Waukesha-based manufacturer will continue production of automotive parts at the Waukesha facility and is moving forward with plans for a $25 million investment in the facility. The company announced an investment of $20 million last year and has since increased the size of the project. Austin Ramirez, chief executive officer of Husco, said the decision will better align operations with the market in the off-highway sector, while also allowing the automotive investment to move forward. “We regret having to say goodbye to our valued colleagues who have been instrumental in our success over the years and are committed to doing our best to ensure a smooth transition for all involved,” Ramirez said. Husco cited a protracted downturn in the energy, mining, construction and agricultural industries served by the offhighway business as the reason for the consolidation.

The company, which develops and manufactures hydraulic and electrohydraulic controls, plans to move the off-highway assembly, machining and maintenance operations to facilities in Whitewater and Maquoketa, Iowa. The move will take place in phases starting in September and is expected to be complete by early 2017. The decision leaves an uncertain future for approximately 100 salaried and hourly positions at the Waukesha facility. It is possible some positions will transfer. Husco also has manufacturing operations in China, India and England. The reduction could potentially cut the company’s workforce by 3 percent. It also means Husco may have to pay back some of the tax credits it has claimed from a 2013 award. The company was awarded up to $880,000 in tax credits by the Wisconsin Economic Development Corp. to support a multi-year, $45 million capital expansion project at its Waukesha and Whitewater facilities. Husco was eligible for $256,671 in credits to date, according to WEDC. The award required the company to create 160 jobs and invest $45 million to

receive the full credits. The company has invested $22 million and 30 new jobs have been created through the end of 2014, according to WEDC’s latest performance report for the company. The contract called for the jobs to be created between the start of 2013 and end of 2015 and then to be maintained for another two years. The company has claimed $145,000 in credits, according to a company spokesperson, with about $61,000 of those related to job creation. Companies that receive awards from WEDC are contractually required to meet objectives related to job creation, retention or capital investment. Those that do not fulfill contractual obligations are subject to clawbacks or denial of tax credit claims. The situation is complicated by the fact that Husco is maintaining its automotive-related production in Waukesha.

Husco CEO Austin Ramirez

In a statement, WEDC said the company kept the agency informed of its plans for the Waukesha facility. WEDC will monitor the company’s employment to determine what impact it will have on the tax credits the business has received. Husco’s capital investment in the Waukesha facility will remain in place, according to a company spokesperson. The company did claim a job creationrelated credit in 2013 and is working with WEDC to determine the next steps. No job-related credits were claimed in 2014 or 2015.

——Arthur Thomas

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

Beyond the headshot: Social media for the business executive As a business executive, it’s expected that you’ll represent your company with professionalism, respect and maturity. Sure, it’s easy to make sure that’s all reflected in your LinkedIn headshot, but that doesn’t mean you can’t dig into the trenches of social media and engage with your consumers. In fact, it’s encouraged that you do. When connecting with consumers on social media, it’s important to look beyond the simple appearance of your profiles and post content that’s thoughtful, valuable and engaging. Here’s a list of dos and don’ts to follow when it comes to social media for the business executive: 1. Do: Acknowledge your audience. If someone comments on a link you’ve shared, follows you on Twitter or mentions you in a post, try your best to acknowledge 4

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

it. Give the person a quick, “Thanks for the follow!” or follow the person back. You never know who you might learn from. 2. Don’t: Ignore or delete negative comments. This is a tried and true rule for companies, but it also applies to company leaders. Consumers who complain on social media aren’t always looking for a resolution – sometimes they simply want to be acknowledged. You can respond to a negative comment with a simple “I’m sorry that happened. What can we do to fix it?” and then pass it off to the communications team for follow-up. And, understand it can help make your business better. 3. Do: Remember you’re a human, too. It’s ok to stray from pure business talk on social media. Keep it clean and profes-

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sional, but feel free to share thoughts, opinions and funny things with your audience. After all, some people might find it very interesting what you ate for breakfast this morning 4. Don’t: Trash talk. The Internet is an easy place to throw shade, and some corporate business leaders take it upon themselves to use social media as a way to intimidate the competition. While it’s all fun and good to banter with your competitors, make sure you keep it lighthearted and don’t enter that “this could get me fired” territory. Focus on the value you add, not on keeping up with the rat race.

——Meghan Roesner is assistant PR/ social media specialist at Milwaukee-based Core Creative.

leading edge COFF E E B R E A K

POLITIC AL BEAT

Manufacturing tax credit could have political impact BY MATT POMMER, special to BizTimes

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

promote from within, so we are always looking for people that have the skill to move up the ladder.”

“We promoted two well-deserved long-term employees to the position of vice president. Their dedication and expertise throughout the years has enabled us to provide our clients with a high degree of quality service that remains the hallmark of our company. They have demonstrated exceptional commitment and dedication to our clients and staff through their incredible work ethic, knowledge and experience.”

Do you plan to hire any additional staff or make any significant capital investments in your company in the next year? “Throughout our 88 years in business, SelzerOrnst Co. has survived the tumultuous tides of the economy by adjusting our company size and strategies to maintain our competitiveness. This was evidenced back in 2008 when the Great Recession hit the construction industry and we had to better utilize the talents of our staff in order to remain competitive in a lean construction environment. We are always looking for qualified and talented project managers and field personnel to add to our growing team.”

What will be your company’s main challenges in the next year? “We will be very busy in the upcoming 12 months and finding qualified field carpenters could be an issue. We have great leaders in our field staff and we provide very high-quality work. We like to

Do you have a business mantra? “Listen, have integrity, work hard, be kind and success will follow.”

From a business standpoint, who do you look up to? “Throughout the years, I have had the opportunity to work with some great clients. There are two in particular that we have worked for on several projects that pay attention to detail, learn trends and treat people with respect. From each of them I have gained a tremendous amount of knowledge and insight and, in so doing, have adopted many of their business practices.”

What’s the funniest thing that ever happened to you in your career? “About two or three times a year I have a ‘secret office outing.’ I line up some activity and no one knows what it is until they get there. Recently, I took everybody to a karaoke bar and everybody took a turn. It was more than funny!”

“When becoming president, a very smart and successful man told me to ‘Be your own boss.’”

President and CEO Selzer-Ornst Co. 6222 W. State St., Wauwatosa www.selzer-ornst.com Industry: Construction Employees: 28 Family: Married to Mary, daughter Allison, son Matthew. w w w.biztimes.com

Matt Pommer is the “dean” of Capitol correspondents in Madison. His column is published with permission from the Wisconsin Newspaper Association, but does not reflect the views or opinions of the WNA or its member newspapers.

What was the best advice you ever received?

Robert A. Ornst, Jr.

BY TH E NU MBERS

What do you do in your free time? “I enjoy spending time with family. I also play tennis and racquetball and am always reading a book.” n

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Could the more than $250 million in annual income tax breaks for manufacturers and agriculture producers, now drawing headline attention, affect Wisconsin politics leading up to the November election? Fiscal experts expect the state will distribute $284 million in the 2017 tax year. Last year, 78 percent of the tax break program went to individuals making more than $1 million. The tax credit program was enacted in 2011 and called for a sixyear phase-in. It was added to the state budget in the final days of deWalker liberation and didn’t attract much attention at the time. Proponents argued it would help job creation. Actual payouts under the new program substantially exceeded projections. For their part, Democrats have assailed the tax credit program as “trickle down politics.” Such a large break for well-to-do citizens ordinarily might trigger sharp, adverse political reactions in an election year. But the gerrymandering of legislative districts seems likely to protect the large Republican legislative majorities that enacted the tax break. This also is a presidential election year and voter turnout always is higher in those years. Yet at this point, there seems to be little enthusiasm in the general electorate for the expected presidential candidates of the major parties, so turnout is an open question. The presidential election likely will overshadow any effort by Wisconsin Democrats to call attention to the $284 million tax credit payout. Gov. Scott Walker has long harbored the idea of being president. The tax credit program for farmers and manufacturers could be attractive to his Republican reputation if he were to seek the GOP nomination in 2020.

million

Jerry Jendusa, who founded and later sold New Berlin-based Emteq Inc. and is now CEO of Wauwatosa-based Stuck LLC, donated $1 million to the University of Wisconsin-Milwaukee for its new Lubar Center for Entrepreneurship. B i zT i m e s M i l w a u k e e

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MA DE I N M I LWA U K E E

ibMilwaukee addresses unique challenges while employing the blind

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When Pat Crain saw a job posting promising a chance to “do well while doing good” he was intrigued, so he submitted his resume. After interviewing at ibMilwaukee, it quickly became clear the now-former Actuant Corp. customer operations leader could apply his manufacturing and distribution background there and he wanted to be part of the nonprofit, the mission of which is to provide employment to the blind and visually impaired. “It is so inspiring to work with these folks,” said Crain, ibMilwaukee’s chief operating officer. Formerly known as Industries for the Blind Milwaukee, ibMilwaukee was started in 1948 as a way for founder Paul Fryda to provide employment for his brother. The organization now employs 230 people, 110 of whom are blind or visually impaired.

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A Midsummer Night with MBBI ABOVE: ibMilwaukee employee Timothy Adorjan operates a machine that attaches clips to pens at the company’s West Allis facility. BELOW: Julie Davis prepares boxes for packaging writing implements at ibMilwaukee.

ARTHUR THOMAS

Midwest Business Brokers and Intermediaries will host A Midsummer Night with MBBI on Tuesday, Aug. 2, from 4:30 to 7 p.m. on the roof of Hotel Metro, 411 E. Mason St. in Milwaukee. All MBBI members and non-members are invited to learn more about the organization and network with fellow professionals. Town Bank will sponsor complimentary drinks and appetizers. The event is free for members and $25 for non-members. For more information or to register, visit mbbi.org/ product/midsummer-night-with-mbbi.

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

Crain said the organization places an emphasis on giving employees an opportunity to grow, with many starting on the shop floor before moving into management positions. ibMilwaukee takes several steps to safely incorporate visually impaired employees into the manufacturing operation. Those steps include instituting a strong quality assurance program, assigning tasks that match skill and ability levels, leveraging technology where possible and keeping production near the front of the facility, away from distribution. Some employees are limited to basic assembly, while others with the ability to make out shapes or shadows operate certain machinery. The company currently operates from a 100,000-squarefoot facility in West Allis and another 4,000-square-foot facility it recently opened in Janesville, with plans to open another 109,000-square-foot facility in Hartland in the near future. It is a $100 million organization that has expanded its offerings beyond manufacturing to include assembly, kitting, office layout design and distribution. Its ibMade division manufacturers writing implements and brushes, many of which go to the U.S. government and military as part of Ability One, a federal program that encourages the purchase of goods and services from organizations that employ blind or significantly disabled individuals. In some ways, ibMilwaukee faces the same challenges as other manufacturers. Issues related to the company’s workforce, machine maintenance and productivity all come up on a regular basis. But with employees being blind or visually impaired, ibMilwaukee also has its own unique challenges that most manufacturers don’t have to deal with. With unemployment in the blind community at around 70 percent, it would seem finding workers wouldn’t be a problem. Crain said the company has kept a lower profile, so many employees have been referred by word of mouth. Having nearly half of the workforce and nearly all direct labor made up of blind or visually impaired individuals means limiting operations to one shift, because that is when public transportation is available to get employees to the facility. When the Hartland facility opens, Crain said employees will be shuttled out

BOOK REVIEW

‘The Compass and the Nail’ ibMilwaukee 445 S. Curtis Road, West Allis Industry: Nonprofit manufacturer Employees: 230 www.IBmilw.com there from West Allis because no other transit options exist. Like at any manufacturer, productivity matters at ibMilwaukee, but it is more about each employee hitting his or her own standards. “Our mission is to provide blind employment. So as long as they’re doing everything they can, we can try to challenge them and push them, but if they’re physically not able to, that’s fine,” Crain said. The limitations of some employees have also helped fuel some of ibMilwaukee’s growth. While fully blind employees may not be able to run some of the machinery, they are able to assemble tool kits that follow a set pattern. ibMilwaukee is involved in the designing of the kit. It then sources the tools and a foam insert from other companies and its employees assemble the kits. Crain said the kitting is done at a higher price point than items like pens or brushes. “We do have opportunities to expand on that as well,” he said, noting the Hartland facilities will largely be dedicated to kitting. Get the latest manufacturing news delivered to your inbox every Monday. Sign up for BizTimes’ Manufacturing Weekly at biztimes.com/subscribe.

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In “The Compass and the Nail: How the Patagonia Model of Loyalty Can Save Your Business, and Might Just Save the Planet,” Patagonia’s former lead consumer marketing strategist, Craig Wilson, offers methods of creating consumer brand loyalty for any business. He argues that consumers truly drive and direct the economy as they buy certain products and, ultimately, choose which companies serve the public. Wilson also suggests that consumers have a strong affect on companies’ ethical, environmental and social decisions by demanding good business practices. Conversely, consumers can also encourage unethical market operations by choosing to support unethical businesses. “The Brand Ecosystem” is a model Wilson developed while working at Patagonia to help businesses attract a loyal customer base while sustaining the environment. He discusses the model throughout the book as a way to affect positive change in the economy and around the world. “The Compass and the Nail” puts a global perspective on business to consumer relationships. “The Compass and the Nail” is available on www.800ceoread.com for $19.16. n

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THE GOOD LIFE

Milwaukee Y undergoes leadership change, lands more than $1 million

Raising chickens

A coalition of local philanthropic organizations has committed more than $1 million to the YMCA of Metropolitan Milwaukee as the organization undergoes a significant leadership change. Milwaukee Y president and chief executive officer Julie Tolan, who joined the YMCA in 2013 and oversaw a dramatic restructuring plan to eliminate $30 million in debt the organization accrued over two decades, resigned June 30. Under her direction, the YMCA filed for Chapter 11 bankruptcy in 2014, sold 70 percent of its owned real estate assets and re-configured its revenue streams. Jack Takerian, the Milwaukee Y’s chief operating officer, took over as interim CEO upon her resignation. The Milwaukee Y recently announced a total of more than $1 million had been committed by a group of local nonprofits to support the Y’s community programs, partnerships and operations. The organization also announced it expects to receive a multi-year block grant from the City of Milwaukee before the end of the year.

——Ben Stanley

When Chad Beier, a senior agile consultant at Brookfield-based Centare, isn’t helping clients organize more agile business operations, he’s raising six chickens on more than four acres of prairie at his home near the Kettle Moraine State Forest with his wife and two sons. Beier grew up on a dairy farm and is no stranger to caring for chickens and other farm animals. His wife, whom Beier described as an Chad Beier with three chickens on a coup he built himself on more than animal lover, suggested four acres of prairie at his home bordering the Kettle Moraine State Forest. the family start raising chickens. Though at first he was hesitant – he remembered the work that went forward to having a steady supply of fresh eggs. into caring for animals when he was growing up – he “Chickens were something I saw value in said the after-work hobby has made his family closer. because I grew up on a dairy farm,” he said. “We “It’s brought our family together to focus on one always had fresh milk and fresh eggs. They were thing together,” Beier said. “Feeding the chickens, better than what you get in a store. I’m looking watering the chickens, moving them around.” forward to having them mostly for the food.” In August and September, Beier is also looking ——Ben Stanley

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BR EA KING G ROUN D

Broadway Paper »» What’s selling: “Wedding invitaNeighborhood: Historic Third Ward tions is our bread and butter,” Founded: 1988 owner Kate Strzok said. “People Owner: Kate Strzok, 32 will come in and buy hundreds of Employees: Nine dollars of greeting cards at a time.” Market: Paper goods and gifts »» Target customer: Female millennial »» Current project: “We’ve been thinking about doing our own bridal wedding album line. We’ve also been working on our own greeting card line. Like Milwaukee, featuring the ‘Milverine.’” »» Industry trends: “I used to worry quite a bit and then I realized that my generation and actually even generations younger than me, there’s this trend to go back to paper. We sell address books like it’s going out of style, and planners, and hard copy notebooks.”

JACKSON SPORTS COMPLEX

Jackson Properties LLC is proposing a 152,862-squarefoot sports complex north of Hasmer Lake, east of Highway P, in Jackson. The proposed project includes a full-size soccer field, 10 volleyball courts, five basketball courts, batting cages and a driving range. The development could also include a 10,000-square-foot sports medicine clinic, a 13,000-square-foot fitness center, a hotel and office space.

——Corrinne Hess

E A S T E R

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GIVING GUIDE

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Re: LinkedIn smarts “Your LinkedIn profile is a powerful social media image. Maybe your most powerful. And you choose exactly what it is and what it says. When others search for you on Google, LinkedIn is one of the first links they click on. You have a chance to make an immediate positive business and social impression.”

-Jeffrey Gitomer

Re: Wisconsin’s economy “How can Wisconsin make itself more attractive to outsiders and natives alike? By building on existing assets; telling a compelling story about its people, companies and culture; and celebrating what’s right about the state – not fixating on partisan divides and what’s wrong.”

Fifty-three newly licensed CPAs recently celebrated the accomplishment at the 9th annual WICPA New CPA Welcome Dinner at the Holiday Inn PewaukeeMilwaukee West. After the dinner and program, guests enjoyed circus-themed entertainment, including balloon creations, magic tricks, face painting, tattoos, cotton candy and popcorn.

-Tom Still, Wisconsin Technology Council

Re: UW System leaders navigate Wisconsin politics “No one should expect UWS leaders to be so bold as to launch the full menu of available reforms. But it would be disappointing — and politically naïve — not to forward some of them. They need to be, and appear to be, proactive in taking major initiatives to help themselves and their institution, arguably the state’s best asset in Wisconsin after its natural resources.”

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biz news

Home medical equipment suppliers dreading more Medicare reimbursement cuts

t the Kenosha Public Libraryâ&#x20AC;&#x2122;s southwest branch in June, Yolanda Swift, deputy national ombudsman for the U.S. Small Business Administration, sat before a room of small business owners from around southeastern Wisconsin who sought clarification on certain federal rules, regulations and policies. A group of home medical equipment suppliers voiced concerns about whether theyâ&#x20AC;&#x2122;d be able to stay in business through the end of the year because of certain 10

BY BEN STANLEY, staff writer

federal policies and cuts related to Medicare reimbursements. Swift said she had heard similar complaints from all over the country. Since the passage of the Medicare Modernization Act in 2003, local medical equipment suppliers, who provide things such as walkers, wheelchairs, medical oxygen tanks and CPAP machines for sleep apnea, have gone through multiple rounds of Medicare reimbursement cuts, with more looming on the horizon. B i zT i m e s M i l w a u k e e

There was an initial 8 percent reduction in home medical equipment reimbursements in 2003 and another 9 percent nationwide HME reimbursement reduction in 2008, with the passage of the Medicare Improvements for Patients and Providers Act. In July 2013, when a new competitive bidding program for Medicare contracts was implemented in Milwaukee and 99 other cities, home medical equipment reimbursements were reduced by 45 percent over three years.

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And those were just the cuts for all devices that fall under the umbrella of home medical equipment. Different pieces of equipment under that umbrella, such as ventilators, wheelchair components, diabetic testing supplies and in-home oxygen therapy machines, were also subjected to additional cuts. So far in 2016, reimbursement rates were cut again by nearly 30 percent for some devices on January 1, and another planned rate cut of more than 50 percent

was scheduled to roll out on July 1, but was delayed until September. On top of that, cuts of more than 50 percent have also taken effect this summer for equipment provided to patients in rural areas. “There’s big problems with this,” said Rick Adamich, president of Waukeshabased Oxygen One Inc. “The biggest is it costs me probably twice as much, if not more, to go into a rural area to service a patient,” but the reimbursement rate will now be the same as it would be if he were helping a patient a block away from his office. For the past few years, rates in rural areas have been comparatively stable and local medical equipment providers, such as Adamich and Knueppel HealthCare Services Inc. chief executive officer Cindy Ciardo, say they have been relying on them to keep their businesses afloat amid heavy losses. “Everything is truly imploding now,” Ciardo said. “We have nowhere else to go. We can’t prop up the system anymore.” West Allis-based Knueppel provides home rehabilitation equipment to Medicare patients. Ciardo said that over the past three years, reimbursement cuts have become so severe that she’s had to lay off employees and close a satellite location in Mequon. She’s worried about keeping the business alive through the end of the year. One major element driving these cuts is the implementation of Medicare’s metropolitan Competitive Bidding Program in 2013, which gave large national home medical equipment providers the ability to bid in markets where they had no local foothold or infrastructure. The problem, according to Ciardo, is that these companies can bid at unrealistically low prices in order to win contracts in local markets, which forces local suppliers to bid at lower-than-normal prices, as well, in an attempt to win contracts. And the bid prices influence the reimbursement rate the federal government will eventually set on that contract. “They artificially put in low bids, kind of to assure they’ll get in,”Ciardo said. “They’re thinking, ‘I’ll bid 20 cents on the dollar and (the actual Medicare reimbursement) will come in at 70 cents on the dollar.’ But it didn’t, because too many companies bid too low. The reimbursement rates were then deflated based on

artificially low bids.” And if the rate comes in too low for a large out-of-state company’s bottom line, it is not obligated to accept the contract it won. Adamich, who in addition to running Oxygen One serves as president of the Wisconsin Association of Medical Equipment Services board of directors, said this puts local equipment suppliers who win small-capacity Medicare contracts in the same market in an extremely vulnerable financial position. “Medical oxygen is my primary category, and in the last round of bidding we had close to 25 suppliers of medical oxygen submitting bids,” Adamich said. “Of those 25, only about four of us were actively supplying oxygen in the Milwaukee area. The rest of them were in places like Florida, Texas, Las Vegas, California. Nobody in their right mind, no beneficiary or referral source, is going to call a company out of Texas to service their patient on oxygen here.” But if the out-of-state company, which won a certain bid under the assumption it could serve a large portion of the local Medicare market, doesn’t accept the contract, the small local suppliers that accepted contracts under the assumption they would only be handling a relatively small portion of the local market are still contractually obligated to service all qualifying patients in the area. “You bid your capacity,” Adamich said. “This is how much of the market I’m able to handle. I bid my capacity. I bid responsibly. I accept a contract because, frankly, we need to in order to support our referral sources and support the patient population. Then other people exit the market. And now all of the sudden I’m expected to handle this capacity, a much higher capacity and a much larger volume of patients that I’m not set up to handle. It can run me right out of business if I have to accept these people. And by the rules of the contract, I have to accept all qualified referrals.” Adamich and Ciardo are hoping the delayed July 1 rate cut will be waived and cuts to rural service area reimbursements will be reversed for future contracts, but they’re pessimistic. “I’d be lying if I said I was optimistic that we’d get something beyond a threemonth delay,” Adamich said. “We fully anticipate that there are going to be significant ongoing challenges with this.” n w w w.biztimes.com

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biz news

Candidates gain power in hiring process Stronger economy means competition for talent

BY MOLLY DILL, staff writer

uring and after the Great Recession, the hiring process was largely employer-driven and job seekers had fewer options. But over the last couple of years, as the unemployment rate has dropped steadily, the economy has strengthened and companies have become more confident in making investments, there has been a subtle shift. Employees have more options and are applying for new roles from a position of safety – while already employed. That means employers are competing to attract the best talent, and must find ways to set themselves apart. “With the unemployment rate lowering and the market continuing to get more and more competitive, it is important for

employers to make that positive first impression with candidates and making sure that they’re having a good candidate experience,” said Liz Dotson, vice president at MilwaukeeJobs.com. MilwaukeeJobs.com recently rolled out a “Short Application” form to give candidates a quicker, streamlined application experience and help employers increase their applicant flow, she said. “More people are working and if they’re looking at making a move, they’re already employed and it’s going to have to be appealing enough to make somebody want to make that switch,” said Beth Mathison, director of employment services at Waukesha-based human resources association MRA-The Manage-

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ment Association. Seeing the shift in power, MRA has developed a new Candidate Experience Survey for its employer members to help them assess their hiring practices from the candidate point of view. “We’ll hear a lot from candidates where they’ll say, ‘I feel like every time I apply, it’s this black hole,’” Mathison said. “We know that candidates want to share their feedback, we know candidates are frustrated with the process, and so we anticipate there will be strong response rates to the survey.” Employers should treat job applicants like customers—because they could be one day, and they will tell their friends about their experience with the company, Mathison said. Work environment, corporate responsibility, flexibility and career development are the top characteristics candidates cite when evaluating whether to accept employment at a company, said Anne Nimke, CEO of The Good Jobs, a Milwaukee company that markets employer cultures. Nimke has seen a minor leaning toward candidates in the hiring process, but not a full shift. “I would not say that candidates overall have the upper hand in an interview, but I think that the conversation is becoming more equal,” Nimke said. A May ManpowerGroup white paper titled “Brand Detectives: The New Generation of Global Candidates” said employers can improve talent attraction and retention by demonstrating their company’s

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culture to candidates firsthand, involving strong employee leaders in recruitment or using outside staffing agencies to market the company to potential hires. “If you look at the Internet and how much information is there…it’s very, very transparent, and employers are not keeping up with being as transparent about how it is to work for them, what kind of promotion opportunities they have, what their culture is,” Nimke said. Internet research certainly played into Lindsay Bartelme’s decision to apply to New Berlin insurance brokerage HNI Risk Services. Bartelme, an intern at HNI, looked at LinkedIn and company review site GlassDoor to determine if the firm was a good fit for her. “I didn’t read one negative view of HNI online from anybody who’s ever worked here,” she said. Mike Natalizio, chief executive officer of HNI, said the company writes its job postings in a way that markets the position to the applicant and showcases the firm’s unique culture. “Rather than posting and hoping for candidates to apply, we’re trying to be more proactive and seeking the type of candidates we’d like to apply,” Natalizio said. “We’re trying to hire based on the individual and their ability and passion for performing and less about their experiences.” “If you are not doing a good job of recruitment marketing, you are limiting your pool to people who are not necessarily your top talent,” Nimke said. n

innovations Essential Biotechnology moves toward clinical trials for cancer-treating drug

f all goes as planned, Big Bend-based Essential Biotechnology will have its cancer-treating drug in phase one clinical trials within three years. “It’s aggressive, but it’s achievable given our clear regulatory path,” said Mike James, chief scientific officer at the 2016 Governor’s Business Plan Contest finalist. James still works as an assistant professor of surgical oncology at the Medical College of Wisconsin, which is where the startup began. The Medical College handles the intellectual properARTHUR THOMAS (414) 336-7123 arthur.thomas@biztimes.com Twitter: @arthur8823

ty, licensing it to Essential Biotechnology. The company also counts William Clarke, director of research commercialization in the college’s Office of Technology Development, among its team. Clarke serves as the company’s chief executive officer. James said it was important to put the right team together to drive toward clinical trials. The intellectual property behind Essential BiotechnolJames ogy is the discovery of a protein on the surface of tumor cells that James said is critical to the tumor’s survival. The company is developing a drug that will inhibit the protein, which James said the early data shows not only kills tumor cells, but also makes them more susceptible to other treatments. Because the company’s treatment would kill tumor cells through multiple mechanisms, rather than simply slowing their growth, James said the cancer is much less likely to evolve around the therapies. The result should be better survival rates and reduced exposure to chemotherapy or radiation. While James says the evidence suggests the treatment should be applicable to most types of

cancer, Essential Biotechnology has chosen to focus first on ovarian cancer because of the prevalence of resistance and recurrence. The National Ovarian Cancer Coalition says recurrence happens in 70 percent of cases. James said ovarian cancer offers the chance to get results quickly and also to track how well the drug is working. He sees pancreatic cancer as a subsequent target for the company. Essential Biotechnology’s drug is one of a handful of technologies coming out of the Medical College and being developed toward commercialization, James said. He noted there has long been a good environment for commercialization at institutions on either the east or west coasts and in Madison. “It’s kind of a growing environment here to support that,” he said, adding that he has received strong institutional support. Clarke said as far as he knows, the Medical College is the only institution of its kind with an experienced biotechnology expert that has time dedicated to helping faculty commercialize their work. “We actively try to facilitate interested and able faculty,” he said. “It’s a unique setup we’ve got here.” The startups launching out of the Medical College over the last few years include TAI Diagnostics Inc., which is developing genetic testing for transplant rejection and raised $8 million last year; Germantown-based Somna Therapeutics LLC, a medical device company that began selling a device for extra-esophageal acid reflux disease last year; Protein Foundry, which manufactures recombinant proteins; and several others, some of which have been acquired. Clarke cautioned that not all research ideas address large enough problems while also being protectable by patents to be commercialized. “If I get one a year, I feel like I’m doing pretty well,” he said. The challenge now, as Essential Biotechnology has moved from a research w w w.biztimes.com

project to a lean development program, is finding the right investors and partners. “It’s always a challenge when you’re in a relatively early development program to reduce the perceived risk to potential investors and partners,” James said. As a biotech company, Essential has a long road ahead of it. Clarke hopes to be able to have extended conversations with those who have expressed interest in funding the idea in the near future. He also cautioned that early stage funding for biotech companies is hard to come by in the state, and even the country. The company was able to take a step

Essential Biotechnology LLC Innovation: Cancer-treating drug Big Bend http://essentialbiotech.com/

toward reducing those risks in December, winning the inaugural Wisconsin Healthcare Innovation Pitch event organized and sponsored by Bridge to Cures, Clinical and Translational Science Institute, the Medical College and Concordia University. Essential Biotechnology won $50,000 and was named Southeast Wisconsin Healthcare Innovator of the Year. n

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real estate Twenty years after Pabst closed, The Brewery redevelopment nears completion

t’s a story that has been told for 20 years. Pabst Brewing Co. closed its Milwaukee brewery in 1996, leaving in its foamy wake a dozen abandoned buildings on a 21-acre downtown site. For a decade, very little was done with the property, until 2006, when developer and philanthropist Joseph CORRINNE HESS P: (414) 336-7116 E: corri.hess@biztimes.com Twitter: @CorriHess

Zilber acquired most of the complex for $13.6 million and began its monumental redevelopment into a mixed-use neighborhood of apartments, office space, edu-

cational institutions, a hotel and more. The City of Milwaukee helped, too, with a $29 million tax increment financing district that helped finance infrastructure and road improvements on West Juneau Avenue, North 10th Street, North Ninth Street and a roundabout at the intersection of North Eighth Street and West Winnebago Street. It has been a long redevelopment project, slowed early on by the Great Recession. But today, after several deals that brought together private and public partnerships, there is only 1 acre available in The Brewery and executives with Zilber Ltd. say that parcel is under contract to be sold. It’s a far cry from 1996, when Pabst executives left town, leaving their former

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

headquarters littered with cigarette-filled ashtrays, empty beer cans and boxes of trash, as Jim Haertel, owner of Best Place at the Historic Pabst Brewery, described in 2004. One of the first buildings converted under the leadership of Zilber’s team was the former Boiler House at West McKinley Avenue and North 10th Street. The 55,000-square-foot, three-story, Cream City brick building was purchased in December 2007 by TMB Development Co. and Dermond Properties and converted into office space. John Kersey, executive vice president of Zilber Ltd., who has been with The Brewery project since the beginning, said it has been amazing to watch Joseph Zil-

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ber’s vision come to life. “It was Joe’s vision, when he acquired the property in 2006, to create Milwaukee’s next great neighborhood based on the principals of sustainability and historic preservation,” Kersey said. “Speaking on behalf of all Zilber employees, it has been an honor and a privilege to help make that vision a reality.” Following the Boiler House was Blue Ribbon Lofts, a 95-unit apartment complex in the former Keg House building along West Winnebago Street. The apartments were developed by Oregon, Wisconsin-based developer Gorman & Co. Tenants moved in beginning in January 2009. Gorman & Co. also converted two other buildings into what is now known as The Brewhouse Inn & Suites and the attached restaurant, Jackson’s Blue Ribbon Pub. The hotel opened for business in April 2013. In 2013, another group of people who might not have visited the complex became regulars when the University of Wisconsin-Milwaukee opened its Joseph J. Zilber School of Public Health on North 10th Street. Indianapolis-based Milhaus Development is the latest group to submit plans for The Brewery. The company is proposing two five-story apartment buildings located on vacant land at 926 W. Juneau Ave. and 1003 W. Winnebago St. The first building would include 110 units and 7,000 square feet of retail along Juneau Avenue. The second would include 164 apartments, a leasing office and amenities, including a fitness center and club room. That building would have a 170-space parking structure. The proposal is working its way through the City of Milwaukee’s approval process, winning preliminary Plan Commission approval on July 11. Milhaus is hoping to break ground this fall for a spring 2018 completion date. Finishing up this fall is the Eleven25 student apartments located in Pabst Brewing’s former bottling house at 1125 N. Ninth St. The apartments will feature

B C

YOUR MONEY’S ON THE WRONG TRACK .

A Best Place B Pabst Professional Center

440 beds in 151 units on three floors. The apartments are in a mix of one- to fourbedroom apartments for students attending college in the metro Milwaukee area. Just in time for the students, Milwaukee Brewing Co. is planning to expand its operations and move to the Shipping Center building on the southwest corner of North Eighth Street and West Juneau Avenue. Moving to the two-story, 175,968-square-foot building will allow Milwaukee Brewing Co. to complete its much needed expansion. And even Pabst is coming back to The Brewery. The San Antonio, Texas-based company announced in February it would bring some of its operations back to the complex and lease 2,100 square feet in the Pabst Professional Center, an office building completed in 2014. The Pabst Professional Center, located across Juneau Avenue from the former First German Methodist Church, where Pabst plans to open a small “innovation brewery,” tasting room, restaurant and bar, has attracted some interesting tenants itself.

In addition to the Pabst satellite office, the building houses Klement Sausage Co. Inc., which moved its corporate offices from Bay View; SafeNet Consulting Inc., which consolidated its Third Ward and Wauwatosa offices into the building; TCF Bank; and IT consulting firm Logicalis Inc. Before Zilber purchased the majority of the complex in 2006, there was work being done to one of the buildings. Jim Haertel cashed in his 401(k) and raised nearly $11 million to acquire the abandoned Pabst corporate offices in September 2002. “We were the spark,” Haertel said. “We were really the catalyst that got this all started.” Haertel said Joseph Zilber took him and his wife, Karen, to Hawaii in 2007 and offered him $1 million for the Best Place buildings, which includes the former corporate office building, gift shop and Blue Ribbon Hall. Haertel told Zilber he wanted $2 million. As the week went on, the offer got up to $1.75 million, but Haertel says he didn’t budge. The deal never went through. Zilber, who died in 2010, couldn’t corroborate the story. w w w.biztimes.com

C Brewhouse Inn & Suites D Babst brewery sign

Instead, Haertel has been steadily adding on to Best Place over the past 15 years. Blue Ribbon Hall became a popular place for weddings. There was so much demand for weddings that Haertel in 2014 spent about $750,000 to renovate a 5,000-squarefoot office space outside Capt. Frederick Pabst’s former office into a second banquet hall, which is called Great Hall. Haertel is currently working on another renovation project at Best Place that will move and expand the gift shop from 800 square feet to just more than 1,200 square feet and add a coffee shop. Over the next three years, he is also considering adding yet another banquet hall and a museum. Since day one, Haertel has dreamed of opening a beer-themed bed and breakfast. Whether that will come to fruition depends on Haertel’s desire to become a 24/7 operation. He loves what has taken place at The Brewery. “There is finally enough critical mass for more retail,” Haertel said. “This is going to be just like the Third Ward.” n

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SLOW BUT STEADY 2016 Mid-Year Economic Forecast BY ANDREW WEILAND, staff writer

HERE IS CERTAINLY PLENTY OF GOOD NEWS TO REPORT ABOUT THE U.S. ECONOMY, WHICH HAS NOW BEEN IN A SEVENYEAR EXPANSION PERIOD.

THE U.S. UNEMPLOYMENT RATE IS AT 4.9 PERCENT. THE NATION’S ECONOMY CREATED 287,000 JOBS LAST MONTH, BOUNCING BACK FROM LOW JOB CREATION IN APRIL AND MAY. THE STOCK MARKET HAS RECOVERED FROM ITS 2015 DIP AND THE DOW JONES INDUSTRIAL AVERAGE AND THE S&P 500 REACHED RECORD LEVELS THIS MONTH. THE COMMERCIAL REAL ESTATE MARKET HAS REBOUNDED IN SOUTHEASTERN WISCONSIN, WITH CRANES TOWERING OVER NUMEROUS MAJOR DEVELOPMENT PROJECTS AROUND THE REGION.

Yet despite those bright spots, the overall U.S. economic picture remains one of stubbornly, if reliably, slow but steady growth. The nation’s gross domestic product rose only 1.1 percent in the first quarter this year, after a meager 1.4 percent increase in the fourth quarter of 2015. Economists expect GDP to improve in the second quarter and the rest of the year, but are only predicting modest gains of 2 to 2.5 percent. “We continue to muddle along,” said Michael Knetter, Ph.D, an economist and the president of the University of Wiscon16

sin Foundation. “It continues to be a little bit of a surreal situation, with these interest rates being so low.” The economic expansion following the Great Recession has been long, but unusually weak. “This may turn out to be the new normal, having this 2 percent, 2.5 percent growth rate on average,” said Dr. Abdur Chowdhury, professor of economics at Marquette University. “It’s just going to chug along at 2 to 2.5 percent, is what it seems like,” Knetter said. “I don’t see anything that’s going to spark breakout growth.” B i zT i m e s M i l w a u k e e

But Steve Rick, chief economist for Madison-based CUNA Mutual Group, said he prefers to focus on the “steady” pattern of the U.S. economic expansion cycle and describes its growth rate as “modest.” “It’s not slow,” Rick said. “We are approaching full employment in this country.” The recovery has been modest because American consumers built up so much debt from 2005 to 2007, it has taken years for them to deleverage, so more spending went to pay off debts instead of to purchase goods, Rick said. But now that many consumers have reduced their debts and unemployment is low, consumer

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confidence is rising, he said. The Conference Board’s consumer confidence index rose to 98.0 in June, the highest level since October 2015. At the same time, there is a pent-up demand for U.S. consumers to purchase cars and durable goods like refrigerators, washers and dryers, Rick says. Many consumers put off those major purchases while they deleveraged, but will need to replace aging cars and appliances. Many economists and business leaders are wondering when the U.S. Federal Reserve will again raise interest rates, and how that would affect the economy. The Fed raised interest rates by a quarter of a point in December, the first increase in nine years, but has lacked enough confidence in the economy since then to increase rates further. Knetter and Chowdhury said they don’t expect another interest rate hike at least until after Election Day in November. An interest rate increase would raise the risk of a recession, Knetter said. Knetter said he does not expect a recession to occur by the end of 2016, but that chances for a recession in 2017 are “50-50.” Chowdhury says he does not expect a recession for at least the next 12 months. Rick said he doesn’t expect a recession until at least 2018. “There’s still a lot of pent-up (consumer) demand,” he said. n

cover story

WANTED: MORE HIGH-PAYING JOBS

HE U.S. ECONOMY HAS BEEN IN A LENGTHY EXPANSION PERIOD SINCE THE GREAT RECESSION ENDED. BUT WHILE THE ECONOMY HAS GROWN FOR SEVEN YEARS, MANY HAVE BEEN FRUSTRATED BY THE PERSISTENT SLOW PACE OF THAT GROWTH.

LIKE IT OR NOT, THE SLOW AND STEADY GROWTH PACE FOR THE U.S. ECONOMY IS EXPECTED TO CONTINUE FOR THE REST OF THIS YEAR AND INTO 2017, ACCORDING TO DR. ABDUR CHOWDHURY, PROFESSOR OF ECONOMICS AT MARQUETTE UNIVERSITY. ONE OF THE PROBLEMS, HE SAYS, IS THAT THE ECONOMY IS NOT PRODUCING ENOUGH HIGH-PAYING JOBS. CHOWDHURY WAS INTERVIEWED BY BIZTIMES EDITOR ANDREW WEILAND FOR THE BIZTIMES MID-YEAR ECONOMIC FORECAST. THE FOLLOWING ARE EXCERPTS FROM THAT INTERVIEW.

BIZTIMES: How would you assess the state

of the U.S. economy? CHOWDHURY: “We are having a sort of slow but steady growth. In the first quarter of this year, the growth rate of GDP was very low, about 1.1 percent. What we are expecting is that will pick up in the second and third quarter. My guess is in the second quarter you will see growth (reported) somewhere between 2 and 2.5 percent. The same as we are expecting in the third quarter. “One thing that has been happening in the labor market – we have been creating a lot of jobs. If you set aside the month of May, in the last 12 months, job creation, on average, was in excess of 200,000 (per month). The problem I see is the types of jobs we are creating. We are creating a lot of jobs, but most of those jobs are in low-skill, low-pay areas. We are not creating enough jobs in high-skill, high-paying areas. As a result, wages are not growing. If you look at the wage growth in the U.S. in the last couple of years, it has been relatively flat. Recently, we have seen some wage growth and hopefully, as the labor market continues to tighten – unemployment is at 4.7 percent – we are hoping that wages will start picking up.” BIZTIMES: Why is it that the U.S. economy

has not been growing at a faster pace? CHOWDHURY: “That’s really a puzzle for everyone. Since the recession, if you look at overall economic growth it has been in that 2 percent range, plus or minus a little bit. It has not picked up. One of the reasons is we have seen a drop in productivity in the U.S. Another reason is there is a global slowdown going on. Our exports have dropped significantly. The strong dollar, that has also affected our economy a little bit. A number of factors have sort

of combined to cause this drop in growth rate. This may turn out to be the new normal, having this 2 percent, 2.5 percent growth rate on average.” BIZTIMES: What’s keeping wage growth

down? Why aren’t we creating more highwage, high-skill jobs? CHOWDHURY: “We have created a lot of jobs – for example, in the hospitality and leisure sector – but we have not created many jobs in, say, manufacturing. Recently, we have started creating some jobs in construction. Those are high-paying jobs. IT services, we have not created many jobs. Those are the areas that I think are lacking. The U.S. is a service economy right now. We are creating a lot of jobs in that service area, but not in manufacturing, construction, IT.” BIZTIMES: And what’s the reason for that?

Are we still losing the fight for many of those jobs to overseas competitors? CHOWDHURY: “With manufacturing, yes. We are losing jobs to low-paying foreign competition. Currently, we have

BIZTIMES:

Let’s talk more about the housing market. You said there are still problems. It seems improved, but what concerns do you still have?

in that sector. Because of the drop in oil price, business investment in that sector has significantly dropped. That was one of the reasons our first quarter growth rate was so low. We saw a sharp drop in business investment. The drop in oil price is having a remarkable impact on the U.S. economy. And going forward, I don’t see that changing very much. Oil is now going at around $40 (per barrel). It will stay in the $40 to $50 range for some time to come.” BIZTIMES: Why is that? CHOWDHURY: “We do see an abundance

Chowdhury

C H O W D H U R Y:

“One thing we have noticed is builders’ sentiment. That’s an indicator we look at. If it improves, that tells you builders will be building new homes and the housing market will pick up. The mortgage rate has been very low. Despite the low mortgage rate, we don’t see builders’ sentiment improving. If you look at first time homebuyers, we don’t see (a typical amount) of activity among the first-time homebuyers. Whereas you look at the rental market, we see a lot of activity over there. So people are, for whatever reason, not moving toward buying homes as much as we’d like to see.” BIZTIMES: What about the oil and gas sec-

tor? Oil prices came way down from their

of supply in the international market right now. The strong dollar is another reason why the oil price is so low. The supply glut we see in the international market will keep oil prices low. If we look at the OPEC countries, they have no intention to curtail production in order to raise price. And with the sanctions against Iran being lifted, Iran is now supplying more oil into the international market. You see an increase in supply, but you see a drop in demand, because the European economy is not doing very well, China is slowing down. All of that has reduced the demand for oil while the supply has gone up. This excess of supply will keep the price of oil low for some time to come.” BIZTIMES: Let’s talk about interest rates.

The Fed finally did a small rate increase in December, but has not done another since then. Will it raise rates anytime soon?

“ I don’t see any rate increase before at least December.” — Dr. Abdur Chowdhury, Marquette University

about 12 million manufacturing jobs in the U.S. The peak was about 19 million jobs. We have been going down over the last 10 years in terms of manufacturing jobs. If you look at construction, the housing market still has a lot of problems. New homes are not being built at the rate they used to be.” w w w.biztimes.com

high. A lot of companies in the region say their results are down because of weakness in the oil and gas sector. CHOWDHURY: “This is having a significant impact. If you look at, for example, employment in … mining and energy, you see a huge drop in employment. I think now they have negative growth

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CHOWDHURY: “There was some talk in

March, April that (the Fed) might raise the rates in June. That didn’t happen. The next meeting is scheduled for the end of this month. I’m positive they are not going to raise interest rates then. Then comes the next meeting in mid-September, which is close to the election period. 17

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So, I don’t think they would raise rates so close to the election. I don’t see any rate increase before at least December.” BIZTIMES: Is that a sign that the Fed lacks

confidence in the economy?

— Dr. Abdur Chowdhury, Marquette University

CHOWDHURY: “Yes. They want to wait

Nominate Today! www.biztimes.com/npawards Nomination Deadline: September 9, 2016 GOLD SPONSOR:

a little bit longer to see if there has been any structural change in the labor market. I think there is some nervousness within the Fed. They don’t want to raise rates and push the economy into a slowdown or a recession. I think they will wait a little bit more before they raise rates.” BIZTIMES: What is your take on the Wis-

consin economy, particularly in the Milwaukee area? 18

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

things happening in the Milwaukee area, and some not-so-good things. The unemployment rate in Wisconsin is very low, 4.2 percent. But we see the same trend here as we see nationally; we are creating a lot of

“ I don’t see any recession, at least in the next 12 monthe, unless something unusual happens.”

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CHOWDHURY: “There are some good

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jobs but we are not creating high-paying, high-skill jobs. In the Milwaukee area especially, the jobs that are being created are those low-paying, low-skill jobs. As a result, you don’t see much income increase in the local economy. “One thing that we have failed to do in the Milwaukee area in particular and in the state in general is, I don’t think we have been able to attract new businesses the way we thought we would be able to. Remember the Walker administration, in his first

cover story

term, they were talking about attracting businesses from other states…it hasn’t happened. One of the reasons for that I think is the lack of proper infrastructure in the state. And here I compare Wisconsin with Iowa. If you look at Iowa, they have been able to develop their infrastructure very well, especially the IT infrastructure. As a result, they were able to attract a lot of new businesses. We have not been able to do that in Wisconsin. The other thing I see is a lack of diversification in the Wisconsin economy. If you look at our major industries – for example, paper products – nationally and globally… we don’t see an increase in the demand. It is maybe flat or going downwards. The way out of that would be trying to diversify.” BIZTIMES: Looking ahead, nationally, how

much longer will this slow but steady expansion period continue? Is there a recession looming? CHOWDHURY: “I don’t see any recession, at least in the next 12 months, unless something unusual happens. But it will (continue to) be slow growth. The growth rate will be at most 2 to 2.5 percent. It won’t exceed that in the coming months.” n

MOST AREA BUSINESS LEADERS OPTIMISTIC ABOUT Q3 But fewer predict profit gains, employment growth BY ANDREW WEILAND, staff writer

OST AREA BUSINESS LEADERS ARE OPTIMISTIC about how their companies will perform in the third quarter, according to the latest business outlook survey conducted by the Metropolitan Milwaukee Association of Commerce. The survey includes responses from 113 Milwaukee-area firms, both large and small, that employ more than 43,250 people. Of those surveyed, 65 percent predict third quarter sales gains, 58 percent predict increased profits in the quarter and

44 percent say they expect to increase employment in the third quarter. Only 10 percent predicted sales declines in the third quarter and only 10 percent predicted a decline in profit, while 13 percent said they planned to reduce staff in the quarter. These third quarter sales expectations matched the second quarter outlook survey results, while profit expectations were down from the 61 percent who predicted second quarter gains. “These results suggest that while growth is likely to continue, the pace of

growth may be slower than average,” said Bret Mayborne, the MMAC’s economic research director. Job growth expectations for the third quarter are Mayborne down slightly from the 46 percent who expected job growth in the second quarter outlook survey. The number of jobs in the metro Milwaukee area has grown for 68 consecutive months.

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

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In a separate MMAC report, the metro Milwaukee economy showed improved performance in May as 17 of the 23 economic indicators tracked by the association posted year-over-year increases, up from just 13 improved indicators in April. The May report is the most recent of the MMAC’s monthly economic indicator reports. “The aggregate number of positive indicators rebounded in May to its highest total in seven months, but overall job growth remains lackluster,” Mayborne said. Non-farm employment in the metro Milwaukee area rose to 862,300 in May, up just 0.6 percent compared to a year ago. Over the same time frame, jobs nationally grew at a 1.7 percent rate and rose 1.5 percent in the state. “Year-over-year job increases in the metro (Milwaukee) area have fallen under 1 percent in six of the past seven months and rank significantly below both national and state level growth rates,” Mayborne said. The local unemployment rate is now down to 4.2 percent (not seasonally adjusted), down 0.8 percentage points from a year ago. Other highlights of the May MMAC report: »» The number of unemployed in the metro area fell 16.6 percent in May (compared to a year ago), to 34,600. New unemployment compensation claims for the Milwaukee area were down 9.2 percent in May. »» Existing home sales for the metro area rose 12.1 percent in May, to 1,717. The number of mortgages in Milwaukee County increased for the first time in five months and was up 8 percent in May, compared to a year ago. »» The number of air passengers using Mitchell International Airport rose 2.7 percent in May, to 570,643, the eighth year-over-year increase in the past nine months. n

QUAD STOCK SURGES

FTER SUFFERING LOSSES IN 2015 AND A LOUSY start to 2016, the U.S. stock market recovered to post modest gains in the first half of 2016. The Dow Jones Industrial Average fell 2.23 percent in 2015, its first negative year since 2008, to finish the year at 17,425. Then the Dow plunged in the early part of 2016, bottoming out at 15,660 in February. Since then, the Dow has recovered and for the first half of the year was up 2.9 percent. The S&P 500 rose 2.7 percent in the first half of the year. Stock prices rose during the first half of the year for most of the publicly traded companies in southeastern Wisconsin. Of the 39 publicly-held companies based in the region, 22 saw their stock price rise during the first half of the year. Leading the way, by far, was Sussexbased Quad/Graphics Inc., which saw its stock price shoot up 150 percent during the first half of the year, from $9.30 a share on Jan. 1 to $23.29 per share at the end of June. That is a major reversal for Quad stock, which fell 59 percent in 2015. The first half increase in Quad’s stock price completely wiped out the 2015 decline. Investors are responding favorably to big changes made by Quad. In November, the company announced a $100 million cost reduction plan. As part of that plan, the company closed plants in Colorado, Connecticut, Pennsylvania and Georgia last year. Quad reported a $3.8 million profit in the first quarter of 2016, a huge improvement from the first quarter of 2015, when the company reported a $35 million loss. For all of 2015, Quad reported a net loss of $641.9 million. The first quarter of 2016 was the first quarter since the end of 2014 for which Quad had reported a profit. Another local company that has endured major losses and had to make big cost cuts also saw its stock price surge during the first half of the year. Milwaukee-based mining equipment manufacturer Joy Global Inc.’s stock rose 68 percent during the first half of the year, to $21.14 per share.

BY ANDREW WEILAND, staff writer

BIZTIMES STOCK INDEX

RESEARCH COMPILED BY ROBERT W. BAIRD & CO. INC.

2016 MID-YEAR PERFORMANCE TICKER COMPANY NAME 12/31/15 PRICE 6/30/16 PRICE QUAD QUAD/GRAPHICS INC. 9.3 23.29 JOY JOY GLOBAL INC. 12.61 21.14 BRC BRADY CORP. 22.98 30.56 WEC WEC ENERGY GROUP INC. 51.31 65.3 BMI BADGER METER INC. 58.59 73.03 DOC PHYSICIANS REALTY TRUST 16.86 21.01 BGG BRIGGS & STRATTON CORP. 17.3 21.18 PLOW DOUGLAS DYNAMICS INC. 21.07 25.73 FISV FISERV INC. 91.46 108.73 GNRC GENERAC HOLDINGS INC. 29.77 34.96 JOUT JOHNSON OUTDOORS INC. 21.89 25.7 AOS A. O. SMITH CORP. 76.61 88.11 SXT SENSIENT TECHNOLOGIES CORP. 62.82 71.04 JCI JOHNSON CONTROLS INC. 39.49 44.26 ROK ROCKWELL AUTOMATION INC. 102.61 114.82 MCS MARCUS CORP. 18.97 21.1 WSBF WATERSTONE FINANCIAL INC. 14.1 15.33 WBB WESTBURY BANCORP INC. 18 19.5 RXN REXNORD CORP. 18.12 19.63 WEYS WEYCO GROUP INC. 26.76 27.78 TWIN TWIN DISC INC. 10.52 10.74 KOSS KOSS CORP. 1.997 2.03 HOG HARLEY-DAVIDSON INC. 45.39 45.3 BKMU BANK MUTUAL CORP. 7.8 7.68 ESNC ENSYNC INC. 0.38 0.37 MOD MODINE MANUFACTURING CO. 9.05 8.8 JASN JASON INDUSTRIES INC. 3.78 3.61 ATU ACTUANT CORP. 23.96 22.61 ARIS ARI NETWORK SERVICES INC. 4.5 4.2 SNA SNAP-ON INC. 171.43 157.82 KSS KOHL’S CORP. 47.63 37.92 RRTS ROADRUNNER TRANSPORTATION SYSTEMS INC. 9.43 7.46 APAM ARTISAN PARTNERS ASSET MANAGEMENT INC. 36.06 27.68 MAN MANPOWERGROUP INC. 84.29 64.34 STRT STRATTEC SECURITY CORP. 56.49 40.77 MTG MGIC INVESTMENT CORP. 8.83 5.95 BONT BON-TON STORES INC. 2.1 1.41 CNXR CONNECTURE INC. 3.61 2.26

2016 YTD % CHANGE 150% 68% 33% 27% 25% 25% 22% 22% 19% 17% 17% 15% 13% 12% 12% 11% 9% 8% 8% 4% 2% 2% 0% -2% -3% -3% -4% -6% -7% -8% -20% -21% -23% -24% -28% -33% -33% -37%

ALL DATA TAKEN FROM FACTSET RESEARCH SYSTEMS.

Joy Global reported it lost $1.2 billion in 2015, $40 million in the first quarter of 2016 and $9.8 million in the second quarter of this year as the decline of global commodity markets devastated the mining industry. The company has responded by making major changes to cut costs. In March, president and CEO Ted Doheny said the comw w w.biztimes.com

pany planned to make more than $100 million in cost reductions this year. In May, the company announced plans to discontinue its heavy fabrication and welding departments in Milwaukee, eliminating 130 jobs. Last year, Joy Global closed its Orchard Street plant, eliminating 51 jobs. On the bright side, in June Joy Global reported it had received an order for two

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mining shovels headed to the Canadian oil sands and another for a longwall system in India. The two projects are worth almost $150 million. While the stock prices for Quad and Joy Global surged during the first half of the year, after huge losses in 2015, the ............................... QUAD continued on page 23

WISCONSIN EXPORTERS COULD SEE ‘BREXIT’ FALLOUT FOR YEARS TO COME Investors also likely to feel effects BY MOLLY DILL, staff writer

N THE WAKE OF THE UK’S VOTE TO LEAVE THE EUROPEAN Union, known by most as Brexit, local manufacturers with exposure to the UK market are watching the fallout closely. Among them is Waukesha-based Hydro-Thermal Corp., which makes steam heating products and systems often used in food processing. Hydro-Thermal does a lot of business in the UK, and could be impacted by four key factors, said Jim Zaiser, president and chief executive officer. The company may have to change the manufacturing code on its products from the European to the British code. Another possibility is that foreign companies doing business in the UK, such as HydroThermal customer Heinz, may not make investments in their UK plants. Or, multinational firms may limit their business operations in the UK. Zaiser also worries UK-based company leaders could lose their pull and influence. Any one of these scenarios playing out could cost Hydro-Thermal 10 percent of its business, Zaiser said. The company has about 100 employees in the Zaiser U.S. It is represented by five contractors in the UK. “It’s so early in the process, you don’t know exactly what’s going to happen,” he said. “It depends on how companies and governments respond to different scenarios.” Area economists also are parsing out how Brexit will impact Wisconsin companies and investors long-term. UK exporters like Hydro-Ther22

mal are likely to continue struggling with a strengthened dollar and its impact on earnings, said Sara Walker, senior vice president and senior portfolio manager at Associated Private Client & Institutional Services in Milwaukee. “Even small companies, more and more, are exporting,” she said. “If this uncertain environment contributes to renewed strengthening in the dollar or, and this is a big one, a stoppage of the dollar’s fall…that keeps our exports expensive.” “There won’t be any direct effect on Wisconsin because our trade with Britain or Europe is a small part of Wisconsin’s total trade,” said Dr. Abdur Chowdhury, professor of economics at Marquette University. “But, what is going to happen, the indirect effect, because of the Chowdhury Brexit uncertainty you see the dollar is gaining in value. If the dollar stays strong that affects Wisconsin’s exports. A strong dollar will make our exports less competitive globally.” “Companies that do business in the UK or who export to the UK, they might be more impacted because I think there’s an expectation that economic growth in the UK, specifically, will slow down,” said Brian Andrew, chief investment officer at B i zT i m e s M i l w a u k e e

ONE OF HYDRO-THERMAL’S STEAM HEATING SYSTEMS.

Racine-based Johnson Bank. It will be a several years before the full impact of Brexit is known, since the UK will have to renegotiate how goods and services move from the country to other parts of Europe, Andrew said. On the investor side, sentiment has improved from the initial strong reaction, Walker said. “I think it is indicative of general health in the capital markets and in the investment environment,” she said. “This is certainly nothing to dismiss, but it Walker doesn’t seem to be carrying over into a financial-type crisis.” But that doesn’t mean the undercurrent of uncertainty that has plagued investors over the past eight years has gone away. Brexit only served to add to unease, and could influence Wisconsin business executives’ decisions on whether to invest in equipment, people and acquisitions. “At the margin, incrementally, it’s a negative for the world economy,” said Joel

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Huffman, senior portfolio manager at U.S. Bank in Milwaukee. “(But) this is not a Lehman event, as people were coining it.” With or without Brexit, investors are in an anemic growth environment, said Kathy Klein, senior consultant and vice president at Park Place Capital Management Inc. in Milwaukee. “We do think that investors are going to have to get comfortable being uncomfortable. Not only market returns in the U.S., but across all asset classes and really all regions, are going to Klein be lower,” Klein said. Mistakes to avoid, she said, are being too short in bond duration and pulling out of international markets in reaction to the Brexit fallout. It’s important to think long-term. “The key is just to keep focused on what it is you want to do with your investments and stay disciplined and stay diversified and these things tend to work their way out in the markets,” Huffman said. n

BANK MERGER ACTIVITY REMAINS STRONG INTO SECOND HALF

BY MOLLY DILL, staff writer

HE WISCONSIN BANKING INDUSTRY ENTERS THE second half of the year profitable and healthy, with strategic opportunities on the horizon. The state’s 238 FDIC-insured financial institutions reported first quarter net income of $265 million up from $259 million in the first quarter of 2015. The second quarter data has not yet been released. Lending was up in the first quarter, with $76.1 billion in total loans and leases, compared with $71.6 billion in the same period last year. And Wisconsin’s 144 state-chartered credit unions also saw profits and lending increase in the first quarter. Net income totaled $72.3 million in the first quarter, up from $67.8 million in the same period last year. Credit unions lent $22.5 billion in the first quarter, up 10.2 percent from $20.4 billion in the first quarter of 2015. Wisconsin Bankers Association president and chief executive officer Rose Oswald Poels said lending activity will continue to be strong in the second half of the year. Wisconsin bank mergers continued at a rapid pace in the first half of 2016, and many of them involved banks based in

southeastern Wisconsin. Oswald Poels in February predicted a five to seven percent increase in Wisconsin bank merger activity this year, but the robust activity levels have exceeded her expectations already, she said. “We’ll probably end up closer to 12 percent (increase in state bank merger activity) for the whole calendar year,” Oswald Poels said. This is in keeping with the trend toward increasing merger activity; 2015 saw nine Wisconsin bank mergers, up from six in 2014 and two each year from 2011 to 2013. “Part of that is probably because banks are much stronger today,” Oswald Poels said, noting higher earnings, increased loan demand and stable deposits. In addition, succession concerns, shareholder liquidity needs and the increasing expenses devoted to banking technology and compliance have driven much of the community bank merger activity, she said. In the first half of 2016, Racine-based Johnson Bank parent Johnson Financial Group closed on its acquisition of Milwaukee-based Cleary Gull Advisors Inc. and Rosemont, Illinois-based Wintrust Financial Corp. completed its $25.1

QUAD............................................. from page 21

In June, S&P Global Ratings downgraded Bon-Ton from CCC+ to CCC and said it has weak liquidity and increasing refinancing risk for a debt that matures in mid-2017. A default could be in the near future for the retailer, S&P credit analyst Mathew Christy predicted. Brookfield-based health care software developer Connecture Inc. suffered the biggest first half drop in stock price among southeastern Wisconsin’s publicly held firms, falling 37 percent to $2.26. The company reported a first quarter net loss of $7.3 million. However, Connecture in May announced it had received a $52 million investment from a California-based private equity firm. n

stock price for Bon-Ton Stores Inc. continues to drop rapidly. Bon-Ton’s stock price fell 33 percent during the first half of the year, to $1.41 at the end of June. Bon-Ton, the parent company of Boston Store, with dual headquarters in Milwaukee and York, Pennsylvania, reported a first quarter net loss of $37.8 million. The company announced a plan to sell and then lease back stores in Roseville and Duluth, Minnesota and Aurora, Illinois to Florida-based United Trust Fund Limited Partnership, but the deal, which would have saved Bon-Ton nearly $45 million, fell through.

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million acquisition of Pewaukee-based Foundations Bank parent Generations Bancorp Inc. Several of the announced mergers will close in the second half of 2016. Brookfield-based North Shore Bank’s acquisition of West Allis-based Layton State Bank parent Layton Park Financial Group Inc. is expected to close in the fourth quarter. The $105 million purchase of Brookfield-based Ridgestone Bank by Chicagobased Byline Bancorp Inc. is expected to close late this year. Fond du Lac-based NEB Corp., which owns both American Bank and National Exchange Bank & Trust, plans to merge the two banks, which have southeastern Wisconsin branches, under the National Exchange name in the second half of the year. There were a few darker spots for the local banking industry in the first half of the year, though. Activist investors took aim at Brown Deer-based Bank Mutual

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Corp. and Waukesha-based CIB Marine Bancshares Inc. North Milwaukee State Bank was closed by the Wisconsin Department of Financial Institutions and a North Carolina bank assumed its deposits. Also, JPMorgan Chase announced it would lay off 135 employees in Milwaukee—because of the improved economy resulting in fewer mortgage defaults. Looking ahead, banks will continue to be challenged by low interest rates and will seek yield in other parts of their business, such as trust services, insurance or investments, Oswald Poels said. “With the actions over in Great Britain, it looks like The Fed is changing their mind about interest rate increases the rest of the year, so that certainly will affect banks in Wisconsin and across the country, as well,” she said. “Some of what they’re seeing, because of the loan volume growing, they’re helping their bottom line out by putting more loans on the books.” n 23

WISCONSIN MANUFACTURERS HAVE ROOM TO ADOPT NEW TECHNOLOGY BY ARTHUR THOMAS, staff writer

NDERSTANDING WHERE THE MANUFACTURING industry is headed depends on the question you ask. Poll manufacturers on how their business is doing and they’ll likely be fairly optimistic, said Buckley Brinkman, executive director and chief executive officer of the Wisconsin Center for Manufacturing and Productivity. Ask the same group what they see for the industry and the responses will be much more pessimistic, Brinkman said. The industry is facing a number of challenges, including increasingly global competition and a fight to attract talent as older workers retire. Robotics, automation, 3-D printing and connected devices are also increasingly changing production processes. Other forces have divided manufacturing, as those serving end markets like mining or oil and gas have struggled, while others have boomed. Brinkman added that manufacturers in general have seen increased volatility, especially when it comes to orders. One month might be full of activity, only to have the next be quiet. “They don’t have a lot of visibility to what’s happening longer-term,” he said Kelly Rudy, president of Wauwatosabased manufacturing professional development organization The Paranet Group, said there is irregularity in the industry. She pointed to a cycle in which companies have a hard time finding the help they need to meet increased demand and then aren’t able to sustain the higher level of orders because it takes too long to fill open positions. While many of her members are expecting sales to be up or at least steady, Rudy said they are being cautious about expanding their workforce. “A lot of people are nervous about hiring,” she said. The volatility has also shown up in monthly jobs reports, as the nation lost more than 10,000 manufacturing jobs in three of the first six months of the year 24

WAUKESHA COUNTY TECHNICAL COLLEGE RECENTLY DOUBLED THE AMOUNT OF SPACE DEDICATED TO ROBOTICS WITH THE OPENING OF A NEW INTEGRATED MANUFACTURING CENTER.

and gained more than 10,000 manufacturing jobs in two of those months. Manufacturing employment is down 24,000 through June. Wisconsin has seen ups and downs as well, gaining 4,100 manufacturing jobs in March, only to lose 3,600 in April. The latest data available through May shows the industry is flat, with gains in durable goods offset by losses in nondurable goods. There is reason for optimism though, as the Institute for Supply Management’s purchasing managers index reached its highest level since early 2015 in June and has been trending upward for four straight months after declining at the end of 2015. Tim Wiora, executive director of the Wisconsin Manufacturing Extension Partnership, said he has seen companies increasingly focused on growth instead of reducing costs to improve their margins. “There seems to be a little more positive energy over the last year-and-a-half,” B i zT i m e s M i l w a u k e e

Wiora said. Rudy, Brinkman and Wiora all agreed there’s room for the state’s manufacturers to capitalize on growth in robotics, automation, 3-D printing and connected devices. A survey released in June by Appleton-based Schenck SC found the use of robotics and 3-D printing was limited in the state, particularly among small and medium manufacturers. “There’s still a struggle to find an ROI,” Brinkman said. Wiora said there is increasing interest in new technology, but the Midwest is not matching the speed of adoption seen nationally. As costs continue to fall, he predicted more firms would take advantage of the new technology, much like flat screen televisions or other consumer items. Companies looking for small opportunities to utilize new technology – maybe adding robotics to one line or automating a single operation – would be well-positioned to avoid major risks while moving

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forward, Brinkman said. Rudy said price and risk are the two main factors stopping some manufacturers from adopting new technology. That’s particularly true at family-owned companies, where the technology has the potential to disrupt the workforce, she said. For medium to large manufacturers, innovation is increasingly important, Rudy said. Many are realizing they cannot compete only on price and need to add value. Manufacturers who are doing well have put a process in place to create innovation and are okay with having some failures along the way. The challenge is that many companies look at talent, technology and techniques in isolation, Brinkman said. As more baby boomers retire, he said, companies will have to look at all three together to survive. “The thing that scares me about the base here in Wisconsin is a lot of manufacturers aren’t looking out past next week’s orders,” Brinkman said. n

EFFECTS OF OIL DOWNTURN REACH FAR AND WIDE

HE PRICE OF OIL HASN’T BEEN MORE THAN $65 per barrel since late 2014, and while that’s good news for drivers at the pump, it spells trouble for companies with products that support the oil and gas industry. Menomonee Falls-based Actuant Corp. is among those companies, with about 25 percent of its revenue coming from oil and gas. The $65 figure matters because that’s the price Randy Baker, Actuant chief executive officer, sees as the trigger point at Baker which oil companies will return to making capital investments and increase demand for Actuant’s hydraulic, mechanical and joint integrity tools and connectors. Demand for new equipment used

BY ARTHUR THOMAS, staff writer

upstream in exploration and extraction came to a “crawling halt,” but Baker said the company has had some success with products used downstream, where oil is converted to gasoline. The company reported an almost 5 percent drop in revenue in the quarter ended May 31, after a 15 percent drop during the same period in 2015. Even with diversified offerings, Actuant still sees secondary and tertiary impacts from the oil downturn. The slump has been caused by fairly straightforward economics. A surplus of oil was created as a glut of U.S. oil hit global markets, thanks to advancements in fracking opening up new fields. “The demand just didn’t keep up with supply,” Baker said. Even though there have been two significant drops in the price of oil, there are signs of improvement. Baker said dew w w.biztimes.com

mand has been steadily increasing and the oil surplus is half of what it was a few quarters ago. If the trends continue, supply and demand should come back in-line sometime in 2017. “It is absolutely contingent on a very controlled production environment,” Baker said, cautioning that can be easier said than done in the oil industry. To get through the downturn, Baker said Actuant must manage its cost structure, making cuts where necessary, while also focusing on any positive sales potential to capture market share. At the same time, the cuts can’t be so deep as to hurt core competencies like engineering, field sales and service. “You’ve got to protect those so you don’t damage the business,” Baker said. The challenges in the oil and gas industry have also popped up in other places in Wisconsin’s economy.

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Milwaukee-based Harley-Davidson Inc. reported in April that it missed out on the sale of about 530 motorcycles because of reduced consumer spending in the slumping U.S. oil patch. Waukesha-based Generac Holdings Inc. moved work in its mobile heating business from Bismarck, North Dakota to Berlin, Wis. because of continued weakness in the market. Racine-based Twin Disc Inc., which makes power transmission equipment, reported no new orders or shipments into the oil and gas market during its most recent quarter. The company’s revenues were off 38 percent for the first three quarters of fiscal 2016, largely because of reduced demand for oil and gas-related products. Lower gas prices have also contributed to record auto sales. That’s allowed Waukesha-based Husco International Inc. to invest in its automotive business, even as it has had to scale back in other areas. Adient, the planned spinoff of Glendale-based Johnson Controls Inc.’s automotive seating business, will benefit from increased sales of SUVs, which have more seats and more complex seating systems compared to passenger cars, incoming chief executive officer Bruce McDonald said earlier this year. Germantown-based MGS Mfg. Group, which makes a significant portion of its revenue on plastic injection molding, hasn’t been able to capitalize on lower oil prices as much as might be expected. While the lower prices drive down the cost of resin, fluctuations are expected and most contracts already include priceaveraging, said John Berg, director of marketing at MGS. Lower prices don’t hurt, but the benefits come in transportation and other areas companies not exposed to oil and gas would also see. “When the cost of our services and supplies goes down as part of a visible trend, our customers expect an appropriate reduction,” Berg said. The investment required to transition parts from one material to another means that original equipment manufacturers aren’t likely to switch just because of lower resin prices, Berg said. MGS also can’t stockpile resin to take advantage of lower prices. “We would need to pay for it and hold it until it is needed in production,” Berg said. “That would expose us to the risk of our customers’ business being interrupted by forces out of our control.” n 25

HEALTH CARE MOVES TOWARD PREVENTATIVE MODEL AMID INDUSTRY SHAKE-UPS

N THE FIRST HALF OF 2016, TWO NATIONAL TRENDS have been driving changes in the state health care industry: expanded coverage under the Affordable Care Act and aging baby boomers. As demand for medical care increases, experts expect a shortage of between 60,000 and 95,000 physicians to emerge over the next decade. To adapt, hospital systems and insurance companies are redrawing industry lines, giving rise to consolidation, as well as experimentation with different types of insurance and care models — many designed to reduce costs. Vitals, a health care startup based in New Jersey that recommends highly-rated and inexpensive medical care to customers, examined data from major cities across the country and recently ranked Milwaukee the second-best city in terms of health care access. This year, Wisconsin was named the sixth-best state for health care access in the country in a study by New York-based financial planning firm SmartAsset. But it was also one of the most expensive places in the country in which to receive health care. The results of a study conducted by the Health Care Cost Institute that analyzed claims data from three of the nation’s largest insurers found medical services for commercially insured patients under the age of 65 cost 81 percent more in Wisconsin than the national average. The only state with higher health care costs was Alaska, where the relatively sparse population’s distance from suppliers makes shipping more difficult and more expensive. To reduce administrative costs and pick up larger shares of a growing market, hospital systems have started consolidating. St. Louis, Missouri-based Ascension Health this spring acquired of Wheaton 26

BY BEN STANLEY, staff writer

Franciscan Health Care, which operated eight hospitals, three long-term care facilities and several clinics with nearly 11,000 employees in the Milwaukee area. Insurance companies have adapted to changing market forces in year three of the ACA by either consolidating — industry giants Aetna Inc. and Humana Inc. could close a $37 billion merger this year — or withdrawing from public exchanges and cutting plans. UnitedHealthCare announced in April it would pull out of most public health care exchanges by 2017, giving rise to concerns over limited competition in certain public exchanges. The company cited losses related to claims filed by participants in its plans offered on public exchanges. Louisville, Kentucky-based Humana announced in May it would discontinue individual major medical insurance plans in Wisconsin after encountering what company spokesperson Mark Mathis called “persistent issues” with enrollment. Analysts said at the time of the announcement it was possible increased competition from plans on public exchanges may have contributed to a drop in enrollment. Lines between hospitals and insurance companies also are blurring. Aurora Health Care formed a joint venture company with Anthem Blue Cross and Blue Shield this spring called Wisconsin Collaborative Insurance Co. that will begin offering a commercial insurance plan to employer groups this year. Aurora has also entered into a partnership with UnitedHealthCare to share data B i zT i m e s M i l w a u k e e

on patients enrolled in United’s Medicare Advantage plans. Wauwatosa-based Children’s Hospital and Health System owns an insurance plan that oversees care for people covered by BadgerCare Plus, the state’s largest Medicaid program, and in 2017 plans to begin selling that plan on the federal marketplace set up through the Affordable Care Act. Industry analysts and insiders such as Scott Weltz, a principal and consulting actuary at Milliman’s Brookfield office, see hospital systems entering the insurance market as a possible positive development for consumers. Weltz co-authored this year’s Milliman Medical Index, which estimated the total cost of health care for the average family of four covered by a typical employer-sponsored health plan will exceed $25,000. It’s the highest projected cost since

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the index began tracking annual health costs in 2001, but the jump happened at a lower rate than in previous years – costs are expected to increase by 4.8 percent, compared to 6.8 percent over the past decade. Weltz told BizTimes in May it’s difficult to explain the relatively low year-to-year price increase, but an industry shift toward insurance models that encourage preventative care is one possible explanation. Hospital systems with a financial stake in insurance plans would theoretically have an incentive to keep patients enrolled in their plan as healthy as possible for as long as possible to reduce their number of expensive emergency care claims. Promoting healthy lifestyles and getting patients in for frequent checkups to catch certain medical problems early on, when they are relatively inexpensive to treat, would help the bottom line. n

SOME LONG-AWAITED PROJECTS WILL BREAK GROUND BY END OF YEAR

HE ONGOING SAGA OF THE COUTURE DEVELOPMENT near Milwaukee’s downtown lakefront looks like it will finally begin a new chapter this fall. The potentially catalytic project is expected to break ground in September and the 44-story skyscraper will begin to rise from the ground. Since 2013, when Milwaukee County chose Barrett Lo Visionary Development owner Rick Barrett to develop the project on the site currently occupied by the Downtown Transit Center, the Couture has conjured visions of excitement with its more than 300 apartments, 50,000 square feet of retail and a stop on the Milwaukee streetcar line. Following several years of delays and threats of litigation by parks advocacy group Preserve Our Parks, the group’s lawsuit was dropped last fall, clearing the way for the $122 million development to finally move forward. Another long-discussed and contentious project will also kick off soon, with construction on the mainline of the Milwaukee streetcar expected to begin by the

BY CORRINNE HESS, staff writer

end of summer. The 2.1-mile long mainline will connect the lower East Side, East Town and the Historic Third Ward with the Milwaukee Intermodal Station. Service is expected to begin in 2018. Work is also being done on the streetcar’s lakefront extension, which will add fourtenths of a mile and run from North Milwaukee Street to The Couture along West Clybourn and West Michigan streets. The city is waiting to hear if it is approved for a federal grant that would extend the streetcar line approximately 1.2 miles north from the Intermodal Station to the site of the new Milwaukee Bucks arena. And those aren’t the only major construction projects slated for the second half of the year. Christine Korjenek, associate director of Marquette University’s Center for Real Estate, said nearly every community she can think of in the area has a major project going on, which she credits to successful public/private partnerships. “The boom in commercial real estate in southeastern Wisconsin and Milwaukee is absolutely staggering,” Korjenek said. “The results are easy to see: econom-

ic development, tax base, temporary and permanent jobs. It’s amazing.”

OFFICE Milwaukee-based The Marcus Corp. and Brookfield-based Hammes Co. will likely each submit plans in the coming months for new downtown Milwaukee buildings. Baltimore-based architectural firm InPlace Design had renderings on its website for a 780,000-square-foot downtown development planned by Marcus, which includes a movie theater, housing and offices. Marcus has not yet commented on the project, which would be located northwest of Water and Knapp streets. Hammes also has submitted a request to the city for a zoning change to build an office building and parking structure on vacant land it owns in the Park East corridor, northeast of Water and Knapp. In the Third Ward, Milwaukee-based developer Irgens has purchased a 0.8-acre site at 143 N. Milwaukee St. and is planning to develop a five-story office building as soon as it secures its first tenant. “I can’t predict who the tenant will be,

A RENDERING OF THE COUTURE.

but I think it’s a really interesting idea,” said Jack Jacobson, principal at NAI MLG. “There is demand for that kind of space.” Two large towers that won’t be completed this year but will continue to transform downtown are Northwestern Mutual Life Insurance Co.’s 32-story Tower and Commons office building and 33-story parking and residential tower. The $450 million, 1.1 million-square-foot headquarters office building is expected to be complete in 2017. The apartment tower is expected to be complete in 2018. Overall, the region’s office market ended the second quarter with a vacancy rate of 18 percent and absorbed 90,980 square feet of space, according to data from Xceligent.

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A RENDERING OF THE STREETCAR.

AN AERIAL PHOTO OF 84SOUTH.

For the class A market in the downtown east submarket (the central business district), which includes 11 office build-

ings, the total vacancy rate in the second quarter was 12.8 percent. Absorption was negative 98,554 square feet, which is a di-

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rect result of the FBI moving out of 99,718 square feet of space at 330 E. Kilbourn Ave. and relocating to St. Francis. Outside the central business district, in Schlitz Park, Assurant Health vacated 80,000 square feet during the second quarter. That space is already being backfilled. Jacobson said it is a little worrisome to see such large blocks of office space on the market, but added that the space is being filled within 12 to 18 months. “This is turning out to be a really solid year,” Jacobson said. “It’s not 2015, which was spectacular for everybody, but in talking to other brokers, the mood is good. No complaints.”

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Dirt has been moving for several months in Greenfield on Cobalt Partners’ project, 84South, a 48-acre mixed-use development located along I-894 between 84th and 92nd streets, but by the end of this year the project will become visible. Construction of the new Steinhafels store on the site will commence in late summer and two buildings comprising more than 200,000 square feet of retail, including a Fresh Thyme Farmers Market, are expected to break ground in late summer or early fall. By early 2017, 84South will break ground on three concept restaurants and the first phase of more than 300 apartments, plus a second phase of the project that will be announced later this year, said Scott Yauck, president and chief executive officer of Cobalt Partners. Cobalt Partners will also begin the final phase of White Stone Station, a

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mixed-use development on 60 acres in Menomonee Falls. Phase two will begin in spring 2017 and include several more restaurants and retailers that have not yet been announced, housed in up to six buildings on five acres. Work continues on The Corners project in the Town of Brookfield, which will feature the state’s first Von Maur store. With construction about one-third complete, the mixed-use development at West Bluemound Road and I-94, just east of West Barker Road, is expected to open in spring 2017. Irgens continues to work on The Corridor, a 66-acre mixed-use development at Calhoun and Bluemound roads in Brookfield. Portillo’s opened this month and Dick’s Sporting Goods is expected to open Aug. 3. An office building, hotel and conference center will follow.

INDUSTRIAL During the second quarter of 2016, the southeastern Wisconsin industrial market absorbed 848,163 square feet. Despite the positive net gains, the total vacancy rate climbed 0.1 percent from last quarter, to 4.2 percent, due to the completion of 1.16 million square feet of new inventory, according to Xceligent data. Nathan Winkel, director of research at NAI MLG, said the biggest issue with the current industrial space availability is the low quality. “Currently, there are approximately 45 blocks of available space over 100,000 square feet, with a majority of those blocks being in outdated facilities with either low clear heights, inadequate power or inconvenient freeway access,” Winkel said. “The upcoming round of deliveries and developable sites should help relieve a very tight market.” n

HOUSING MARKET EXPECTED TO FINALLY FULLY REBOUND BY 2017 BY CORRINNE HESS, staff writer

OME SALES IN SOUTHEASTERN WISCONSIN have been steady all year, but inventory has remained tight, with people feeling too comfortable to sell and still not seeing home values back to the peak of 2006. By the end of 2016, however, inventory will loosen and at some point next year, home values should finally return to where they were before the Great Recession, said Mike Ruzicka, president of the Greater Milwaukee Association of Realtors. In fact, for the first time this year, inventory began to loosen slightly in June, increasing 3 percent from June 2015 in the four-county region of Washington, Ozaukee, Waukesha and Milwaukee counties, according to GMAR. Ozaukee County saw the largest increase in inventory, up 20 percent from 174 listings in June 2015 to 209 listings in June 2016. Milwaukee County was up 3 percent year-over-year, from 1,606 homes for sale in June 2015 to 1,654 homes for sale last month. This trend is likely to continue through the end of the year, although people are still cautious about selling their homes, Ruzicka said. “If you’ve lived through the recession and now you’ve refinanced and are in your house for cheap, you probably figure you might as well wait it out until you can sell at a price point you are comfortable with,” Ruzicka said. “It has bottlenecked the market, so even though home prices are up, people are not ready to downsize into a condo or upsize just yet.” Milwaukee County was hit the hardest in the Great Recession and home prices there are still 14.7 percent below what they were when prices peaked in 2006. Comparatively, Washington County is 3 percent below its peak, Ozaukee County is 3.7 percent below and Waukesha County is 5.9 percent below peak values. Still, Ruzicka is optimistic, based on what he has been seeing in Milwaukee County and the City of Milwaukee. The city did very well in the second

A HOME FOR SALE IN WHITEFISH BAY.

quarter, with sales up 11 percent over the second quarter of 2015 and the average home sale price up 5 percent year-overyear. The number of days a house in the city stayed on the market was also down. All three factors are good indicators that the Milwaukee home market is hot, Ruzicka said. “I think we will see some good price appreciation by the end of the year and into next year,” he said. “I imagine by one of the quarters next year we will be above the pre-Recession point, which will be a boost to the psyche as well.” Homes priced at less than $350,000 are “flying off the shelves,” Ruzicka said, selling within a week provided there is not a major problem with the home. While all of the lending options that existed prior to the recession, including putting 0 to 3 percent down, still exist, lending standards have changed. Lenders are stricter about who can qualify for loans. “Lenders learned a valuable lesson – the recession wasn’t caused by cheap money, it was giving cheap money to the wrong people,” Ruzicka said. “You could make the argument that the banks are being too restrictive, but we don’t have enough houses (on the market) so that is a discussion for a later debate.” n w w w.biztimes.com

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strategies Better CEOs, better human beings Lessons learned from TEC

ver the course of my 21 years as a TEC chair, I participated in more than 6,000 member-to-chair sessions we refer to as “one-on-ones.” I heard more than 300 presentations by nationally recognized TEC resource specialists. I facilitated more than 600 TEC meetings where we tackled countless senior leadership issues. Now that my career has somewhat unexpectedly placed me back in a corporate leadership position, I have a few thoughts on the model and the process that was designed to help CEOs run their businesses more effectively and have better lives. My first thought is “it works.” I was able to re-enter business with a toolbox stocked with best practices gleaned

from members and resource specialists. I saw the problems people were having running their businesses, and the solutions suggested by their TEC groups. I saw ideas that worked and those that failed. Here are some highlights from my TEC experience: »» A member excitedly joins his TEC meeting and wants to share something he’s just learned. It’s called the Internet. He suggests his fellow members get on board. What had largely been an academic and military application to date has the potential to be significant to business. The year is 1994. »» TEC resource specialist Ole Carlson is known for taking the mystery out

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of strategic planning. He suggests it’s simply the most attractive route between where you are and where you want to go. Expect a few mid-course adjustments along the way. Best piece of advice: When riding a dead horse, get off. »» Kraig Kramers was TEC Speaker of the Year in 2005. Kraig authored a marvelous handbook for business leaders called “CEO Tools: The NutsN-Bolts for Every Manager’s Success.” He introduced thousands of TEC members to invaluable tools such as trailing 12-month totals and averages. Best advice: Buy his book. »» James Newton, trainer of trainers, may have done the most across the entire spectrum to help enhance the lives of our members. Newton’s views on addictive behavior states, personal mastery and cumulative long-term stress helped members lead better lives, I am sure. Best quotation: “We were recruiting CEOs (to be members) and a bunch of human beings showed up.” »» Jim Cederna, a local treasure, brought his toolbox to TEC as well. He taught members how to measure trust and team performance within organizations. He included a process for continuous improvement, as well. Best piece of advice: Get rid of the annual performance review. Managers and employees hate them. Reviews don’t generate behavior change. They are largely counterproductive. Replace them with an individual development plan that comes from the individual being developed. »» Bob Prosen spoke to TEC groups on accountability. Our members learned that we have been asking the wrong questions relative to accountability and poor performance. Most managers use some form of management by objectives. When the objective is not accomplished, we generally ask, “What is the problem?” This line of questioning opens the discussion to all man-

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DENNIS ELLMAURER LEADERSHIP ner of excuses. Best piece of advice: Don’t ask what or why. Ask “when?” When will the project be back on plan? Take good notes. Let individuals hold themselves accountable for the accuracy of the “on plan” time estimate. No excuses. »» Brian Beaulieu, a favorite speaker throughout all of TEC, is an economist with a remarkably accurate macroeconomic track record. He predicted the recession of 2008 three years before it occurred. He told members what to do in advance of the downturn. Members who listened to the advice weathered the storm far better than those who ignored it. Best advice: Buy Beaulieu’s book, “Prosperity in The Age of Decline,” and read about his prediction for another Great Depression in 2030. Also, read Beaulieu’s advice in Chapter 14, specifically for your children. These are only a few examples of helping leaders be more effective and learning to live a better life. There are many more out there and many more to come. Best advice: Hail a TEC chair and ask for an audio file of any of these speakers. You can find a list of chairs at www.TECMidwest.com/expert-facilitators. Or ask for an invitation to attend a TEC meeting as a guest. You will have more and better tools for your business and your life. n

Dennis Ellmaurer is president of Milwaukee-based Central File Inc. Prior to accepting the assignment at Central File, Dennis was a management consultant working primarily as a TEC chair in southeastern Wisconsin, leading three CEO mastermind groups. For more information, contact him at (414) 202-0190 or dennis@CentralFileInc.com.

strategies process it automatically using thousands of “mindless” mental shortcuts and stereotypes. The problem is, this natural mental shortcutting is so automatic that we tend to blow right past it as we evaluate our customer interactions. But do so at your peril. For example, watch the customer’s defenses go up if you use the words “information” or “ask you some questions” to frame up a meeting wherein you plan to ask questions to get information. You’ve just – most unintentionally – triggered the “probing, snooping salesman” stereotype.

Five takeaway tips

A collision in sales

What’s really happening in your customer interactions

o you ever wonder why you feel the way you do about selling? For example: »» You probably want customers to think of you as anything but a “salesperson.” »» Your prospects’ defenses seem to go up almost before you say “Hello” on cold calls. »» You can’t seem to shake the feeling that the customer is doing you a favor just by meeting with you. »» You try to be real and authentic, but customers seem to take it the wrong way. »» Customers react to things you ask or say (sometimes even just a single word) in a way that seems way out of proportion with what was asked or said. If you experience any of those, you’re not alone! They’re just a few of the more common feelings expressed to me by thousands of salespeople through the years.

Three human behaviors collide Your experience is the result of three forces of human behavior colliding – second-by-second – in your customer interactions. And while those colliding forces largely control the salesperson’s outcomes, most salespeople aren’t even

aware of their action simply because of the hidden, automatic and almost subconscious way in which they operate, even though books have been written about each of them. Here they are in a nutshell: 1. We start in a hole: One of the most eye-opening activities in my training has participants answer the question, “What, if anything, do you wish were different about the way customers view salespeople in general?” Everyone responds, then we aggregate with hundreds of others. Finally, participants look for trends among the responses. Turns out, they see only one trend and they see it immediately: customers don’t trust salespeople (surprise, surprise). We then go into exercises that illustrate the anthropology (believe it or not) of that reality. The bottom line is that in their primal minds, customers view an interaction with a salesperson as a threat to their lives. It’s a parallel to our minds not being able to distinguish the stress of an encounter with a tiger from the stress of an encounter with a bad boss. 2. We wear our labels: It is wellknown that stereotyped people w w w.biztimes.com

JERRY STAP LETON SALES themselves react differently when they are aware of the label they are forced to wear. Duke University’s Dan Ariely wrote the book on this subject and I’ve confirmed his findings for years in my company’s survey. One quick example: all salespeople (statistically, it is 100 percent) automatically operate with a “customer-as-master” mindset. Unfortunately, this reinforces the salesman stereotype. 3. Our customers are “mindless”: This is the most important of the three, and it’s simply this: We humans don’t analyze conversation; we

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Here are five things to get you started harnessing the power of the collision: 1. Eliminate the word “needs.” Wherever you would normally say “needs,” use instead, “what you’re trying to accomplish.” Huge difference in response. 2. Be very aware of how – not how well – you listen. Once you do, you’ll quickly realize that you are almost completely focused on transactional information (the deal, the opportunity, the timing, the requirements, etc.) to the exclusion of almost everything else. Customers pick up on this transactional mode of operating. 3. Find ways to use the phrase, “Explore the fit that I think might exist between our two companies” when dealing with prospects. 4. Try to incorporate the language: “I wonder if we could step back so I can get a little better feel for the big picture.” 5. Don’t say: “Thanks for your time,” “I know you’re busy,” “I appreciate the time,” “I’ll get right to the point,” “I’ll let you get back to work,” “I’ll get out of your hair.” Try this instead: “I’ve been looking forward to our meeting; glad we could make our calendars connect.” Once you see the collision in action, you will never look at your conversations the same way. n Jerry Stapleton, owner of Milwaukee-based Stapleton Resources, has spent most of his adult life looking at real customer interactions through the lens of a microscope and loves to share what he’s learned. He can be reached at jstapleton@stapletonresources.com.

strategies

Love your children unconditionally Even if you disagree with their choices

ost of you reading this business column will be surprised to find a column about love. When one works with families as an avocation, especially those in family businesses, you would be surprised at what you run across. As an educator, I know the issues we don’t discuss are likely to be the ones that cause us the most trouble. Issues get filled with emotion, statements are made and chasms are formed. As an example, I live in a home where a previous owner had a daughter. They were Protestant and she married a Catholic. They died while still owning the home and she refused to step foot in the house as they had so alienated her for her choice. When we moved into the home, you could

tell the home was empty, as it had been devoid of love – family love – for many years. Sadly, this family was not alone in that schism. In those days, a “mixed marriage” was when one of your family members married someone of a different religion. As I grew up, that phrase was used to describe people who married someone of a different race. And today? Perhaps the phrase should be passé. Six years ago, I moved my daughter into her college dorm. She made the choice of colleges largely due to athletics and partially to get away from Mom and Dad. Okay, Dad. Sometimes we are too alike, but I digress. When I moved her in to Seattle University, I was surprised by the pictures on the dorm hall

What does

doors. Adam Lambert. Melissa Etheridge. Elton John. Freddie Mercury. I asked her if this was some sort of musical floor. She laughed and said, “No Dad, this is the ‘tolerance floor.’” “And what are we tolerating?” I asked. “This is the homosexual floor, Dad.” Stupefied, I asked if she was telling me something. She said, “yes.” She said she needed to be more tolerant of others with different opinions than her own, so she took up this opportunity. Then she asked, “Would it make a difference?” Quickly, I gathered myself and said, “no.” It was a question that stuck with me for a long time. Recently, my wife and I were dining with some friends. They recounted a

DAVID B O R S T FAMILY BUSINESS

“yes.” Yes, if you are gay, you can’t be my daughter. If you are gay, my love for you will change. Ask yourself, before the cock crows twice and you are confronted with the same question, “What would your child need to do for you to stop loving him or her?” My answer was simple. Nothing. I love her and her two brothers unconditionally. She is moving back to Milwaukee after six years away. I am very happy about her decision. She is bringing her boyfriend

“ What would your child need to do for you to stop loving him or her?”

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Tom Savio, Owner & CEO, Caliendo-Savio Enterprises, Inc. (CSE) – customer since 1984 Member FDIC

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painful family situation in which a marriage was taking place and they were not invited. The devoutly Christian family had answered the above question differently than I did and excluded this lesbian couple from the ceremony. They excluded family because they disagreed with who the family member fell in love with. This is a common theme in family businesses. The next generation chooses a spouse of a different religion, color, nationality or yes, someone of the same gender. The choice does not go over well, sides are drawn and alienation takes place. Even if that next generation is more than capable of taking over the family business, the choice dooms them to separation from the family and the family to separate from them. Is this what we want? As the owner of the company and the head of the family, do we want alienation and separation on our watch? What if the answer to my daughter’s question would have been

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home with her, too – and yes, they are going to live together. And no, I am not happy about THAT decision. We had a talk and she knows my mind on the subject, but am I going to disown and alienate her because of a choice I disagree with? I like the guy, but even if I didn’t, I would still love her. My suspicion is that someone will object to this column. Expectations are that some will say I am a sympathizer, while others that I suffer from some phobia. The truth is, I am tired of all the separation in our society, all the anger and venom which polarize us. My message is a simple one. Love your children, be they in business with you or otherwise, unconditionally. n

David Borst, Ed.D., is executive director and chief operating officer of the Family Business Legacy Institute, a regional resource hub for family business. He can be reached at davidb@fbli-usa.com.

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FUEL Milwaukee will sponsor Purely Social @ Red Lion Pub Rooftop on Thursday, July 28, from 6 to 9 p.m. at Red Lion Pub, 1850 N. Water St. in Milwaukee. Attendees can network with other young professionals while enjoying complimentary appetizers, drink specials, icebreakers and trivia. The event is free. For more information and to register, visit www.fuelmilwaukee.org/events.

SPOTLIGHT

Wisconsin LGBT Chamber of Commerce will sponsor Milwaukee Lunch & Learn: How Small Businesses Can Lower Health Care Expenses on Thursday, Aug. 4, at 11:45 a.m. at Town Bank, 140 S. First St., Suite 100 in Milwaukee. The event features Jim Yinko of Total Administrative Services Corp., who will discuss ways small businesses can reduce health care expenses using a specific tax deduction. The event, which includes lunch, is free for chamber members and $10 for non-members. For more information and to register, visit business.wislgbtchamber.com/events. Tip Club Inc. will sponsor a Milwaukee Metro Business Networking Event on Thursday, July 28, from 7:30 to 9 a.m. at Sandler Training, 17975 W. Sarah Lane, Suite 160 in Brookfield. Event attendees will participate in spotlight introductions and a networking “lightning round” to make professional connections. The event is free to first-time attendees. For more information and to register, visit tipclub.com/events.aspx. Spina Bifida Wisconsin will sponsor the 23rd Annual Sprint for Spina Bifida 2016 on Saturday, Aug. 13, at 8:15 a.m. at Hart Park, 7300 W. Chestnut Lane in Wauwatosa. The event includes refreshments, resources and vendor displays, games, mural and face painting, Kids’ Dash, awards and a raffle, with proceeds benefitting individuals in Wisconsin living with Spina Bifida and their families. Cost is $20 for the 5K race and $15 for the 2-mile walk. For more information and to register, visit sbwis.org. See the complete calendar of upcoming events & meetings.

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BIZ NO T ES Paul Davis National Milwaukee-based emergency and restoration services provider Paul Davis National received top national honors for leading total sales volume in contents cleaning and loss mitigation for large-scale disaster work. Part of the Paul Davis Restoration franchise network, the company received the honor at Paul Davis Restoration Inc.’s national conference on May 21 in Palm Springs, California. Project managers Jason Bean, Rich Davis, Jon Hallmark, Dustin Huska, Bruce Powell, Steve Provost and Greg Vest also received honors for top sales in the franchise network. Paul Davis’ franchise system is made up of more than 375 full-service general contractors and local franchise office owners in the U.S. and Canada. The Paul Davis National franchise was founded in 2005 in Milwaukee.

Wipfli LLP Wipfli LLP, a Wauwatosa-based CPA and consulting firm, was ranked No. 17 in Bob Scott’s Insights Top 100 VARs (value-added reseller) for 2016. The company is one of 100 organizations honored for accomplishments in reselling and implementing enterprise resource planning and accounting software. With 33 U.S. offices and two India offices, Wipfli has provided private and public companies with assurance, accounting, tax and consulting services for more than 86 years. Accounting technology writer Bob Scott has published his email newsletters, “Bob Scott’s Insights,” for the midmarket financial software community for 17 years.

He has ranked the top 100 VARs since 2009 and published the rankings via his email newsletters and website.

Quarles & Brady Quarles & Brady partners Jack Cook and Greg Everts have been honored in Acquisition International’s 2016 Intellectual Property Awards. Jack Cook, Milwaukee partner and national chair of Quarles & Brady’s Intellectual Property Practice Group, received the “Best IP Portfolio Management Company” award. Greg Everts, Madison partner and a member of Quarles & Brady’s Litigation & Dispute Resolution Practice Group, received the “Best Trade Secrets Dispute Attorney” award. Acquisition International has honored the industry’s top intellectual property professionals with Intellectual Property Awards since 2013.

Milwaukee Downtown, BID #21 The Wisconsin Economic Development Corp. recently accepted Milwaukee Downtown, BID #21 into its Connect Communities Program, a downtown and urban corridor revitalization initiative. BID #21 was one of 15 new municipalities accepted into the now-67 participant program, including the Town of Boulder Junction, the Jefferson Chamber of Commerce and the Village of New Glarus. The Connect Communities Program, launched in 2013, assists downtown organizations in redeveloping existing businesses and creating new businesses and jobs in urban commercial districts.

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

Prevent Blindness Wisconsin

759 N. Milwaukee St., Suite 305, Milwaukee (414) 765-0505 | wisconsin.preventblindness.org Facebook: Prevent Blindness Wisconsin Twitter: @PrvntBlindnssWI Year founded: 1958 Mission statement: To prevent blindness and preserve sight by identifying early signs of vision disorders, facilitating early and effective treatment, and preventing eye injury. Primary focus of your nonprofit organization: Prevent Blindness Wisconsin vision screenings identify children at risk for vision problems and set them on the road to healthy vision. We train and equip volunteers, nurses and community partners to conduct comprehensive vision screenings in their own communities. The Children’s Vision Screening program incorporates education for children, parents, teachers and caregivers on the importance of eye health, eye safety and regular vision screening. Children who do not pass their screening are referred for care; children in need may apply for a voucher for care. Vision problems affect one in four children; those who are screened early and receive effective follow-up can be treated successfully. Number of employees at this location: 7 Key donors: S.C. Johnson & Son; Milwaukee Admirals; Robert W. Baird & Co. Inc.; Walker Forge; Everett Smith Group; Professional Fiduciary Services; RFP Commercial; Anthologie; Park Bank; Satisloh; Milwaukee Capital Inc.; Executive Benefits Networks; Healthier Wisconsin Partnership Program Executive leadership: Tami Radwill Board of directors: »» Charles B. Groeschell , chairman, Robert W. Baird & Co. Inc. »» F.R. Dengel III, vice chairman, Emory & Co. »» Sarah “Sally” Fry Bruch, treasurer, Crivello Carlson S.C. »» Kristin Severson, secretary, The Lemon Tree »» James Bauman, Milwaukee Capital Inc.

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»» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »» »»

David Bier, Merrill Lynch Dale R. Buettner, O.D., Wisconsin Vision David G. Carroll, CFA, Cleary Gull Inc. Kristin Ellsworth, Peeps Eyewear Suzy Frazier (Mrs. William H.), community volunteer Trent Graham, Pricewaterhouse Coopers Mary Gross, community volunteer Dennis P. Han, MD, Froedtert & the Medical College of Wisconsin Thomas J. Hauske, Jr., Everett Smith Group Ltd. Ellen Laubusch, community volunteer John Michael “Mickey” Maier, Professional Fiduciary Services Inc. Jeff McClellan, Anthologie Inc. Amy Mihelich, community volunteer Monica Parchia Price, Mt. Zion Assembly & Early View Academy of Excellence Maria Patterson, MD, FAAP, Children’s Eye Center Ned Purtell, RFP Commercial Inc. Rebecca Goldsmith Romano, Milwaukee Golf Co. Daniel J. Schneck, Robert W. Baird & Co. Sue Stroupe, R.N., MSN, Racine Unified School District Thomas N. Tuttle, Jr., JD, Provident Trust Co.

Is your organization actively seeking board members for the upcoming term? Yes Ways the business community can help your nonprofit: Prevent Blindness Wisconsin is always seeking community and corporate volunteers to become certified vision screeners or to sponsor vision screenings through school partnerships. Corporate sponsorships are available for our annual special events in October and June. Key fundraising events: Swing for Sight Golf Outing, Celebrity Waiters Dinner

biz connections PER SO NNE L F I L E

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

management function and proofreading.

■ Accounting Brookfield-based Vrakas CPAs + Advisors announced several promotions at its firm. They include: Paul Rothering, audit manager; Melissa Karis, audit manager; Melinda Johnson, senior accountant; Nick Heckenkamp, senior accountant; and Nicole Gabriel, senior accountant.

■ Architecture

■ Health Care The Medical College of Wisconsin, Wauwatosa, appointed Integrated Health Network of Wisconsin chief medical officer Ken Bertka, MD, to its faculty as assistant clinical professor of family medicine. Dr. Bertka, who leads IHN’s clinical initiatives, will precept residents and students in MCW’s family medicine residency clinics.

Stephanie Lenzner

Doerner

Lieu

Chris Doerner and Mike Lieu have been hired at Wauwatosa-based AG Architecture. Doerner has a specific interest in senior living, multifamily and affordable housing. Lieu’s electrical expertise broadens the focus of the team. Continuum Architects + Planners of Milwaukee hired Maggie Kuhn Jacobus as marketing director. Kuhn Jacobus has more than 25 years of experience in marketing, public relations, journalism, fundraising and community relations.

■ Engineering Maria Kealey joined Waukesha-based Ruekert & Mielke Inc. as a project engineer. Kealey is a graduate of the University of Wisconsin-Madison with a bachelor’s degree in civil engineering and a certificate in environmental studies.

■ Graphic Design Olivia Bohringer joined Milwaukee-based McDill Design as an intern. She will primarily focus on client services, shadowing account executives and taking ownership of various projects. Her responsibilities include social media writing and monitoring, competitive analyses, estimating, learning about project

joined Integrated Health Network of Wisconsin to serve as vice president of clinical integration, leading the teams that oversee clinical integration across IHN and driving population health for participants in its care management programs.

Dr. Rachel Oosterbaan joined the Madison Medical Affiliates team, working in the internal medicine department at the Mequon office. Oosterbaan offers comprehensive care, which includes regular physical examinations, as well as diagnosing and treating injuries or illnesses for adults.

■ Legal Services Carrie Caan joined the estate planning team at Milwaukee-based Weiss Berzowski LLP as a paralegal.

her practice on advising and representing employers in most aspects of the employeremployee relationship. Gimbel, Reilly, Guerin & Brown LLP, Milwaukee, promoted Steven McGaver and Erin Strohbehn to partner. McGaver is a 2003 graduate of the University of WisconsinMadison. Strohbehn is a 2003 graduate of Marquette University. Both are 2006 graduates of Marquette University Law School. Michael Best & Friedrich LLP, Milwaukee, named Sean Van Eysden and Abigail Griffin patent engineers in the firm’s intellectual property practice group. Both will be based in the firm’s Milwaukee office. Sorrentino Burkert Risch Kalter LLC, Waukesha, hired Melissa S. Blair as an associate attorney. Blair’s primary focus is business litigation and banking and creditors’ rights. She earned her undergraduate degree from the University of Wisconsin-Green Bay and graduated magna cum laude from Marquette University Law School.

■ Manufacturing Regal Ware Inc., Kewaskum, named Dave Lenz chief operating officer. He now oversees day-to-day operations. Since joining Regal Ware in 2002, Lenz has served in numerous leadership roles with increasing responsibility.

■ Nonprofit Mary Nurse has been Meissner Tierney Fisher & Nichols S.C., Milwaukee, added

Volunteer Engagement Award. The award recognized Andrews’ leadership on volunteerism in Milwaukee.

■ Professional Services Sunbelt Business Brokers, Brookfield, named Patti Wenzel marketing and PR manager and sales support administrator. Wenzel has more than 20 years of experience in journalism, marketing and administration, in both the public and private sector. She previously worked for ThirdCoastDigest.com, Southeastern WI PATCH, and RightWisconsin.com.

Atom Slaby has joined Blizzard Lighting LLC, Waukesha, as particle accelerator. In this new role, Slaby will aid in process improvement and data analytics. A graduate of the University of Wisconsin-Milwaukee, Slaby has seven years of experience working in sales, business development and business intelligence.

■ Public Relations & Marketing

Curtis

Kasombo

Keystone Click, Milwaukee, hired Matt Curtis as marketing coordinator. In this role, he will oversee marketing strategies. Additionally, Josh Kasombo has been named marketing project manager. Kasombo previously served as a content specialist. In his new role, he will oversee marketing productivity to assure the members of his marketing team are able to fulfill requests of new and existing clients.

attorney. Little comes to Meissner Tierney after graduating cum laude from Marquette University Law School. Prior to joining the firm, Little served as a law clerk for the Wisconsin Bar Association, as a summer honors intern at the U.S. Securities and Exchange Commission in Washington, D.C., and most recently, as a research assistant for Marquette University Law School.

hired as director of development at Waukesha’s Hebron House of Hospitality, a shelter serving Waukesha County’s homeless population. She has a successful track record in nonprofit fund development and strategic marketing, advocating for affordable housing in Hartford, Connecticut, the Chicago area and Waukesha County. Nurse will assist Hebron House in providing shelter and services to help individuals and families overcome homelessness.

Bethany McCurdy has joined Milwaukee-

Bonnie Andrews, volunteer Milwau-

Zizzo Group, Milwaukee, added Becky Binns as a digital media planner/buyer. Binns has expertise in digital media and is joining ZG in order to support the rapid growth in designing digital ecosystems for companies throughout the United States.

based Petrie + Stocking’s Labor and Employment practice group. She has concentrated

kee manager for the Nonprofit Center of Milwaukee, received the 2016 Governor’s

............ PERSONNEL FILE continued on page 35

Christopher “Chal” R. Little as an associate

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biz connections SBA L O ANS The U.S. Small Business Administration approved the following loan guarantees in June:

Jefferson County Highland Ridge Stables LLC, Hillside Drive, Watertown, $815,700; Loos Custom Homes LLC, 435 Village Walk Lane, Johnson Creek, 150,000;

Kenosha County Backyard Dream Studio & Soundstage LLC, 5819 Sixth Ave., Kenosha, $867,400; Care Animal Hospital of Pleasant Prairie, Prairie Ridge Boulevard, Pleasant Prairie, $570,000;

Milwaukee County 1211 Holdings LLC, 3920 W. National Ave., Milwaukee, $150,000; Adept Manufacturing and Gauging LLC, West Burnham Street, Milwaukee, $100,000; Black Tuna LLC, North Water Street, Milwaukee, $92,500;

PERSONNEL FILE.......................... from page 34 The Roberts Group, Waukesha, hired Kelly Christiansen as an account executive. Christiansen has worked in health care for multiple Chicago-based advertising agencies, including Corbett, Havas Life and Laughlin Constable.

■ Technology Vince Bisesi is the newest member of Milwaukee-based CivicSmart’s product support team. He has seven years of experience in office management. James Roth was also hired as an operations manager. Roth comes to CivicSmart following a year’s experience as an operations manager in the transportation industry and five years of operations experi-

Blair Commercial Painting LLC, 1230 S. 60th St., West Allis, $507,000; Distinctive Group LLC, 2505 S. Howell Ave., Milwaukee, $50,000; Distinctive Group LLC, 2505 S. Howell Ave., $876,000; DPJJZ LLC, 5171 S. 108th St., Hales Corners, $150,000; Foamation Enterprises LLC, 1120 S. Barclay St., Milwaukee, $100,000; Kella Bella LLC, 1442 Underwood Ave., Wauwatosa, $150,000; Kwik Stop of Milwaukee Inc., 700 W. Wisconsin Ave., Milwaukee, $30,000; Medo Trucking LLC, 8010 S. Wildwood Drive, Apt. 101, Oak Creek, $5,000; MOR Foods LLC, 6228 W. State St., Milwaukee, $50,000; MOR Foods LLC, 6228 W. State St., Milwaukee, $30,000;

ence in the U.S. military. In addition, Jarrell Williams joined CivicSmart Inc. as a junior sales representative.

Wise

Behlke

Bill Wise has been hired as a quality engineer by TLX Technologies, Pewaukee. Wise has more than 16 years of experience in quality control, process and manufacturing engineering, as well as lean manufacturing. Bradley Behlke has also been hired as a sales engineer. He has more than 20 years of experience in mechanical engineering, service, programming and systems engineering.

Nevey’s LLC, 6315 W. Fond Du Lac Ave., Milwaukee, $1.18 million; O & Z Eye Care LLC, 6412 W. North Ave., Wauwatosa, $212,500; Roots D Salon LLC, Drexel Avenue, Howell Avenue, Oak Creek, $150,000; Smart Innovations LLC, 1177 W. Northbranch Drive, Oak Creek, $614,300; Wauwatosa Dental Group Inc., 2600 N. Mayfair Road, Suite 7, Wauwatosa, $222,000;

Lake, $172,000; Siebkens LLC, 284 S. Lake St., Elkhart Lake, $75,000; Siebkens LLC, 284 S. Lake St., Elkhart Lake, $1.2 million;

Ozaukee County

Washington County

Finn Mcgoo Entertainment LLC, North Cedarburg Road, Mequon, $585,000; I Can Fix That, 1727 W. Fiesta Lane, Mequon, $5,000; Lumber Sales & Products Inc., N168 W2157021580 Main St., Cedarburg, $200,000; Muscle & Movement Therapy LLC, N69 W5289 Columbia Road, Cedarburg, $25,000;

Racine County Corsa Technic LLC, 1520 S. Sylvania Ave., Ste. 316, Sturtevant, $60,000; Luluayy LLC, 333 Milwaukee Ave., Burlington, $1.03 million; Nick Diane Investments LLC, 6617 Merganser Drive, Racine, $35,000; Sustachek Jewelers Inc., 6220 Washington Ave., #A, Racine, $187,800; Union Grove Piggly Wiggly Inc., 4400 67th Drive, Union Grove, $350,000; Wells Brothers Italian Restaurant LLC, 2114 Mead St., Racine, $163,500;

Sheboygan County Diverse Tooling Inc., 1590 Pilgrim Road, Plymouth, $100,000; Diverse Tooling Inc., Pilgrim Road, Plymouth, $1.4 million; Midstar Printing and Marketing Services LLC, 1209 Pilgrim Road, Plymouth, $25,000; Midstar Printing and Marketing Services LLC, Pilgrim Road, Plymouth, $149,000; Mueller Therapy Inc., 402 First St., Random

Office Space

Walworth County Distinctive Designs by Peggy LLC, W8804 Kilkenny Road, Delavan, $40,000; Halverson Door LLC, Madaus Street, Lake Geneva, $342,000; Easy Living Home Health Care Agency Inc., W175 11117 Stonewood Drive, Germantown, $1.32 million; Flattop Transport LLC, 4932 Wildlife Road, Unit 7, Hartford, $80,000; JMF Delaney LLC, W218 N17476 Delaney Court, Jackson, $2.1 million; Kohn’s Filling Station Inc., Fond du Lac Avenue, Kewaskum, $613,900; Kohn’s Filling Station Inc., 890 Fond du Lac Ave., Kewaskum, $539,000; Lake 5 Farms LLC, 206 Highway 164, Colgate, $5 million; Lake 5 Gardens LLC, 206 Highway 164, Colgate, $5 million; Mahalko Family Chiropractic LLC, N112 W 15237 Mequon Road, Germantown, $180,000; Serenity Hospice Care LLC, W175 N11117 Stonewood Ave., Germantown, $195,000; Sterman Services LLC, 4903 Hwy U, Hartford, $400,000; Two Ponies LLC, Jackson Drive, West Bend, $705,000; ABAA LLC, 220 Regency Court, Brookfield, $250,000; Aqua-Doc International Ltd., W224 S8660 Industrial Drive, Big Bend, $50,000; Ask Enterprises LLC, 17495 W. Capitol Drive, Brookfield, $280,000; Blair’s True Value, 15300 W. National Ave., New Berlin, $150,000.

Banking & Finance: Wealth Management Advertise in these upcoming special reports and get your message in front of area business executives.

August 22, 2016 Space Reservation: August 3, 2016

Contact Linda Crawford today! p: 414.336.7112 e: advertise@biztimes.com

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ADVERTISE IN THE LUXURY HOMES AND PROPERTIES SECTION TODAY! Contact Kevin Gaschk for rates and specs. kevin.gaschk@biztimes.com or 414-336-7132 36

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BIZTIMES AROUND TOWN n

biz connections

Dave & Buster’s Golf Outing for Make-A-Wish Dave & Buster’s recently sponsored a golf tournament at Silver Spring Golf Club in Menomonee Falls to benefit Make-A-Wish Wisconsin, followed by a cocktail and hors d’oeuvres reception at Dave & Buster’s in Wauwatosa. Individuals and companies sponsored course holes and player contests by donating $200 to $1,000 to Make-A-Wish. The reception featured a silent auction, with proceeds also benefiting Make-A-Wish.

Ed Gagnon, Marcus Parent and Chuck Weclowski of Dave & Buster’s.

Paul Szymczak of Climatemp Cooling & Heating and Dave Sellnow of Make-A-Wish.

Brian Farbisz of Samuel Adams and Mike Vlachos of Dave & Buster’s.

Krystin Gridley and John Gridley of USPS.

Mike McCormick and Rick Sackleh, both of Dave & Buster’s; Wendy Cozzens, director of development for Make-A-Wish Wisconsin; Ben Kaebisch, Paul Voelz, Nikky Breijak, Amanda Grennewald and Ed Gagnon, all of Dave & Buster’s.

Tina Kurzinski, Blaine Hastings and Tracy Hastings, all of Dave & Buster’s.

Golfers and guests enjoyed hors d’oeuvres displayed on a Make-A-Wish ice sculpture at the reception.

Proceeds from the event’s silent auction benefitted MakeA-Wish Wisconsin.

Silent auction items included Green Bay Packers and Chicago Bears memorabilia.

Photos by Maredithe Meyer w w w.biztimes.com

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n GLANCE AT YESTERYEAR VOLUME 22, NUMBER 9 JULY 25 - AUGUST 7, 2016 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 ADMINISTRATIVE ASSISTANT

Sarah Sinsky sarah.sinsky@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

George Hambach Building

REPORTER

This photo, taken circa 1935, shows the George Hambach Building, built in 1895, which contained Roundy’s Branch No. 1. Located at 221 N. Broadway in the Historic Third Ward, the building now houses Hospitality Democracy restaurant Onesto. Roundy’s went on to open many more grocery stores in Milwaukee under the Pick ‘n Save and Metro Market brands, which are now owned by Kroger.

REPORTER

Arthur Thomas arthur.thomas@biztimes.com

— This photo is from the Milwaukee Public Museum’s Photo Archives collection. Additional images can be viewed online at www.mpm.edu

SALES & MARKETING DIRECTOR OF SALES

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

Maribeth Lynch mb.lynch@biztimes.com ACCOUNT EXECUTIVE

Kevin Gaschk kevin.gaschk@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

Ben Stanley ben.stanley@biztimes.com INTERN REPORTER

Maredithe Meyer maredithe.meyer@biztimes.com

Independent & Locally Owned — Founded 1995 —

COMME NTA R Y

Superman! Where are you?

“W

aiting for ‘Superman’” was a 2010 documentary film that criticized the American public education system. But I can’t get that title out of my head when I listen to Milwaukee aldermen criticize Department of City Development Commissioner Richard “Rocky” Marcoux. The Milwaukee Common Council recently refused to approve Marcoux’s reappointment by Mayor Tom Barrett, sending the matter back to committee for further ANDREW WEILAND Editor BizTimes Milwaukee

review. After 12 years in the post, Marcoux’s job status is uncertain. Why? Downtown Milwaukee is booming with numerous development projects and everyone is happy about that. “I think it’s fair to say we’ve had an unprecedented amount of development 38

in this city in the last four years,” Alderman Jim Bohl said. But while downtown is booming, many of Milwaukee’s low-income neighborhoods are Marcoux still seeing little to no economic development activity. With that disparity in mind, some aldermen say Marcoux and the DCD are paying too much attention to downtown and aren’t doing enough to attract jobs and development to the city’s neighborhoods. “When I hear statements to the effect of what a great job is taking place (by Marcoux), I just have to stand up and say, you’ve got to be kidding,” said Alderman Tony Zielinski, one of Marcoux’s biggest critics. “We have, if not the highest, one of the highest African-American male unemployment rates in the country. What has been advanced to address that issue in 12 years? You talk about development… look at the central city. What kind of deB i zT i m e s M i l w a u k e e

velopment have we seen in the central city in the last 12 years? With the development we have had, it’s been downtown. Instead of addressing those most in need in our community, we are focusing on other areas, and we are not even doing a good job at that.” But the boom in downtown development, while certainly assisted by the DCD and the city with subsidies like tax increment financing, is mostly market-driven. People want to live downtown and more businesses want to move downtown. The lack of economic development in the central city is also market-driven. The high violent crime rate, poverty and poor performance of Milwaukee Public Schools creates an environment the marketplace wants to avoid. The DCD can’t change that fact. Marcoux and the DCD work with economic development opportunities that come to the city from the private sector. Primarily, those opportunities have been presented downtown. The DCD has its own programs

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throughout the city that seek to attract much-needed development to lowincome areas. Many of them, such as Bronzeville and the 30th Street Industrial Corridor, have had little success, but not for a lack of effort. Marcoux and the DCD cannot reduce crime or fix education in Milwaukee. These are big societal problems that everyone needs to work to solve. Until progress is made on the big picture, there is no way the DCD on its own is going to turn the central city into a development hotbed. But some aldermen seem to think somebody out there somewhere could come in and wave a magic wand. “If we want to turn things around in this city, we need to do a national search and get somebody in this position who is going to be aggressive, who is going to be talented, who is going to work with the business community, who is going to work with us,” Zielinski said. Conduct the national search if you want…but Superman isn’t coming through the door. n

ERICH SCHROEDER PHOTOGRAPHY

the last word

Embrace change to create a successful future Doug Hastad is president of Carroll University in Waukesha. Leaders should be proactive in addressing small changes while also thinking long-term, he says. “An acknowledged reality in today’s world is that the only constant is change. This is particularly applicable for leaders whose organizations are routinely subjected to scrutiny and influence from consumers, media, employees, regulators, government agencies, etc. Suffice to say, the changes that organizations experience are driven by a multitude of internal and external factors. “Admitting that change is a constantly moving part of our organizational culture is one thing; however, responding to it with creativity and timeliness is something

Doug Hastad

we need to master. An organization’s ability to transform long-term and adjust quickly will greatly improve your chances to advance your business amidst change. “There is no element of an organization that is exempt from this process. Transformative initiatives are usually large in scale and long-term in implementation. They take many forms, such as renovation or construction of new facilities, significant alternations to workplace policies or key components of a strategic plan. “Leaders who are proactive in identifying small adjustments that can be made daily have the ability to positively impact their organizations on a regular basis. Easy changes that are implemented quickly will demonstrate your ability to listen and react to an evolving landscape.

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President Carroll University 100 N. East Ave., Waukesha Industry: Higher education Employees: 485 full-time faculty and staff www.carrollu.edu

“As leaders, it is our responsibility to continually monitor the pulse of our organization and all of its stakeholders. Inevitably, we will learn of opportunities that require transformation or adjustments. Handling these changes in a timely manner will show that your organization pays attention to the expectations of those you serve.” n

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