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Business Beat: As Milwaukee goes, so goes Wisconsin

Mike Ivey  —  8/20/2008 5:36 am

For Wisconsin's economy to stay viable, it needs a strong Milwaukee, and two developments last week suggest better times for the state's largest city.

The first good news came from Johnson Controls, which announced it will research the commercial viability of plug-in hybrid electric vehicles under an $8.2 million federal grant.

Plug-in hybrids, or PHEVs, have a battery that can be recharged overnight at home for short trips the next day. After the battery runs down, the regular gasoline engine kicks in.

Chevrolet hopes to unveil its plug-in hybrid, Volt, sometime next year, with other car makers pursuing similar products for mass production. PHEVs offer the double advantage of lower air emissions while eliminating the need for fuel entirely on short commutes.

A diversified manufacturer with 140,000 employees worldwide, Johnson Controls has been working on rechargeable lithium-ion batteries under a similar contract since 2006.

The latest grant will be used on research beyond the battery itself. The goal is getting a system that will enable plug-in hybrid cars to drive up to 40 miles on the electric battery before the internal combustion engine kicks in.

Imagine the economic impact if a Wisconsin-based manufacturer could come up with a viable rechargeable battery system. Talk about a clean power leader.

Founded in 1885 by professor Warren Johnson, inventor of the first electric room thermostat, Johnson Controls has long been one of my favorite state companies -- and not just because they don't belong to Wisconsin Manufacturers & Commerce.

Earlier this summer, Johnson Controls was the only Wisconsin firm to make a list of the "40 Best Companies for Diversity," as featured in the July issue of Black Enterprise.

The company has also earned the number-one ranking in its category among Fortune magazine's America's Most Admired Companies in 2006, 2007 and 2008, along with many other domestic and international awards for corporate governance, financial performance and corporate social responsibility.

At the same time, it has achieved consistent growth, including 61 consecutive years of increased sales, 17 consecutive years of increased earnings and 33 consecutive years of dividends increases.

Who says you can't do well by doing right?

The other good news for Milwaukee involves real estate, with the city being the only large metro area in the U.S. to show a price appreciation over the past 12 months.

According to a report by New York-based Radar Logic Inc., residential real estate in the Milwaukee area was priced at $123.76 per square foot in May, a 1.1 percent increase compared with May 2007. The next closest metro area was Columbus, Ohio, which saw the price of its residential real estate fall just 0.1 percent over the period.

The biggest declines were in Sacramento (-31.0 percent), Las Vegas (-29.5 percent), San Diego (-27.2 percent) St. Louis (-26.9 percent) Phoenix (-25.8 percent) Los Angeles (-23.8 percent) and San Francisco (-23.0 percent).

Sure, Milwaukee didn't experience a huge real estate bubble like a lot of other cities -- including Madison and Minneapolis -- which helps to explain the latest figures. But in this market, price stability counts for something.

Allied accessibility, take 2

Kate Stalker of Schreiber Anderson, project manager for the city's redevelopment of the Allied Drive neighborhood, takes exception to criticism about handicapped accessibility for the $9.2 million first phase of the project (Business Beat, Aug. 13).

Stalker says that 43 of 49 units in Phase I are fully accessible, a higher standard than just making them "visitable" for people in wheelchairs.

"We were held to a very high standard" in qualifying for WHEDA tax credits for the project, she says.

Perhaps a bigger issue for the project is early cost overruns. The city budgeted $167,000 for final designs, but Eppstein Uhen Architects has estimated costs will approach $900,000. Changing firms at the last minute doesn't appear possible because the city wants to start construction by October in order to have units ready in time for leasing next year.

But Stu Levitan -- chairman of the Community Development Authority, which is heading the project -- said other positive developments there haven't received much attention. They include a strong pricing for the tax credits from the National Equity Fund.

"It's attributable to strong value in the project and the city's strong support," Levitan says.

Also, the actual costs for relocating current tenants on city-owned property came in well under budget, according to city staffer Percy Brown. The city had budgeted $45,500 for relocating 18 tenants but spent just under $26,000.

Brown said most of the savings came from residents electing to self-move for $1,000.

"That's a win-win in that we saved on the project cost and the residents had a chance to earn some cash," Brown explains. "Many of the residents used the self-moving monies and rent credits to catch up on their rents."

A Royle investment

Times have been tough in the printing industry, and not just because of competition from the Internet. Soaring prices for paper and transportation have presented challenges that aren't likely to disappear.

But Sun Prairie-based Royle Printing is investing more than $10 million in its operation, including a new web press equipped with a variety of systems to minimize waste and energy consumption. Royle is also in the midst of adding 40,000 square feet to its production facility in Sun Prairie.

Royle Printing was founded in 1951. Chris Carpenter bought the company in 2002 from Rich Royle. It has been designated a "Best of the Best Workplace in America" for the past four years by the Printing Industries of America.

Mike Ivey  —  8/20/2008 5:36 am