An interstate boomlet south to the border is adding commerce to southeastern Wisconsin.
The Interstate 94 corridor from Milwaukee to the Illinois state line has become a sweet spot for development. Over the past three years, farm fields have yielded to industrial parks filled with warehouse distribution centers, trucking companies and corporate headquarters.
One of the most prominent wins along the corridor is Amazon’s unmissable 1.5-million-square-foot complex in Kenosha. The enormous building is the same size as the National Security Agency’s data center in Utah. Once fully operational, it will employ 1,600 people.
Smaller successes are happening, too. After being rejected by more than 25 banks, Hitters Training Academy owner RJ Fergus moved out of his cramped space in Caledonia. On Sept. 1, he opened a two-story, 42,000-square-foot building in the town of Raymond, northwest of Racine.
The biggest boom has been in Kenosha County. In addition to Amazon, companies like Uline, Kenall Manufacturing, Konecranes and Meijer have set up shop. Although some companies have brought existing employees with them, 4,000 jobs have been brought to the area, 70 percent of which are new. The Kenosha County Jobs Center expects to post about 1,700 open job orders during late February and early March.
“All of the development happening in the near future will greatly help reduce the unemployment numbers not only for Kenosha, but the surrounding counties,” says Doug Bartz, manager of the Kenosha County Jobs Center. The building frenzy has resulted in more jobs. The unemployment rate in Kenosha County has dropped from 11 percent (in December 2009) to 5.9 percent (in December 2014). Racine County’s unemployment rate has also dropped from 10.5 to 6.3 percent during the same time period.
“A lot of the development in Kenosha County is because of its geographic proximity to Chicago,” says Jim Paetsch, vice president of corporate relocation, expansion and attraction for Milwaukee 7, a multicounty economic development group. “Companies want to deal with suppliers that are close by, and they want to do it in a car ride versus a plane ride.”
Paetsch explains to developers how the region has invested in training skilled workers, and how the state has lower income, sales, and property tax rates than Illinois, with tax incentives for manufacturers – one of the M7’s biggest focus. “I’ve been with the M7 for nine years,” says Paetsch, “and when I first started, we never had these conversations. Now, I’m having them every week.”
While Kenosha County is leading the charge, Racine County is playing catch-up, says Jim Ladwig, executive director for Racine Area Manufacturers and Commerce, and former Racine County executive. Some of the county’s smaller municipalities, like Raymond, Yorkville and Caledonia, don’t have sewer and water infrastructure.
“We’ve been behind the eight ball,” says Bob Bradley, village president for Caledonia, which has initiated a project to bring sewer and water from Mount Pleasant. “We’ve just lost so many opportunities.”
Pleasant Prairie and Kenosha have been more aggressive about setting the table for development, says David Braun, a real estate agent specializing in industrial properties with RE/Max Newport. “Pleasant Prairie did a lot of the right things,” he says. “They are more forthcoming in the development approval process.”
Case in point: Kenall. The lighting manufacturer’s $25 million, 354,000-square-foot building project was put on the fast track. The company held its groundbreaking ceremony in May 2014, was in full production by December, and expects to hire 600 people over the next five years.
With vacancy rates shrinking in the region, developers are buying up property and building on speculation. Chad Navis, director of Industrial Investments for Zilber Property Group, said his company has built six industrial buildings on spec and the company is readying development on its seventh.
Navis points to a recent deal with FNA Group, which makes hoses and distributes pumps and replacement parts for pressure washers. The company plans to relocate its headquarters from Elk Grove, Ill. to one of Zilber’s buildings at LakeView Corporate Park in Pleasant Prairie. The project nets 100 new jobs.
The regional boomlet has been “described as an overnight story,” says Navis, “but it’s been 20 years in the making.”