How Wauwatosa and other cities compete for development
Businesses like ABB are in the driver's seat
Zilber Ltd. won the right to develop a site for ABB at Innnovation Park in a competitive process involving a number of developers, said Dan McCarthy, Zilber's director of urban development.
The Zilber proposal was site-specific, and, according to Zilber vice president Mike Mervis, the ABB process was atypical, with the choice based at least partly on a set of relationships between Zilber, the University of Wisconsin-Milwaukee and ABB and on ABB's preference for university-affiliated sites, most evident in the United States in their facility at Centennial Campus in North Carolina.
For municipalities including Wauwatosa, winning a development - ABB or otherwise - is a game of unknowns in which incentives, sites, utility costs, transportation and other factors all may play roles. It's like shooting in the dark.
Wauwatosa City Administrator Jim Archambo said that commonly a city will be asked to respond to a sometimes very general information request from a commercial real estate firm that doesn't disclose the name of its client.
The city responds, assuming other municipalities got the same request but not knowing who they are. And if the project goes to someone else, "you don't know for sure what in the end tipped it in your favor or against you," Archambo said.
"Through all this process," he added, "I think (developers) try to keep it as quiet as they possibly can, for as long as they can."
In the case of ABB, it wasn't until sometime in December that the city knew it was likely to land in Innovation Park, he said. It was announced in early January.
Cost is a central factor in site selection. In the example of ABB, this means a lease-rate agreement with Zilber it can live with. Also important to the company was sufficient parking, about 400 slots.
"ABB has a requirement of X number of parking spaces, so you put those together in whatever way you need to," Archambo said.
Providing structured parking under the ABB building was largely a city priority, even though the cost, at about $18,000 a slot, borne by the city, is much higher than surface-level parking.
"The structured parking is important for a couple of reasons in this particular case," Archambo said. "One is that we don't have huge acreages on which to put surface (parking) … but also because in Innovation Campus, we're trying to balance the conservation of green space in the development."
It's also a matter of "how competitive we are with our competition," who may provide acres of cheap, surface-level parking, he said.
For a company seeking to build or expand, the city it chooses is a non-factor, beyond what it might provide in incentives or a desirable site, said ABB spokesman Ken Graber.
The site the company wanted just happened to be in Wauwatosa, Graber said.
"I think once Innovation Campus was pitched as a resource," he said, "it's just one of those choices that became so self-evident immediately, in terms of the pairing between ABB's interest and engineers, engineering technology and the university offering at that site."
One that got away
Wauwatosa hasn't always won at this game, and the example of Eaton Corp. is another instance of how municipal boundaries matter little.
Eaton was looking to expand outside the city of Milwaukee and Wauwatosa proposed a location in the Research Park, next to Highway 45.
"It's one that we really tried to get," Archambo said. "Part of the package that was being put together for them included some tax credits, federal tax credits."
The credits were based on location, and when, in the end, the federal government declined to issue them, Wauwatosa lost Eaton.
Tosa's loss was Menomonee Falls' gain.
"With Eaton, they just came out and went through a broker," said Matt Carran, director of community development for Menomonee Falls. "They hired different design teams that then made a pitch to Eaton, independent of each other."
He agrees with Archambo that "the municipalities aren't taking the lead."
The projects are "never quite the same," Archambo said.
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