There is no guarantee Edward E. Gillen Co. will remain in Milwaukee despite a commitment by the contractor and port officials to get a deal done.
Gillen has been in Milwaukee since the marine contractor was established in 1894. The company is negotiating with the Port of Milwaukee to lease at least 15 acres on the harbor to establish a new contracting yard and headquarters.
But port officials are concerned the lease with Gillen could devalue neighboring land the port owns.
Company President Richard Zirbel said he must figure out if the company could save money by moving elsewhere. Gillen has outgrown its headquarters on the Kinnickinnic River and plans to consolidate yard operations spread among four or five other properties Gillen leases from the port, he said.
But the company runs about half of its business through its Chicago office, and Zirbel said he is considering Chicago and communities between the two cities.
The company needs to determine if it could save money on taxes by moving out of Milwaukee, he said. The city in which Gillen is headquartered determines the annual taxes the company pays on its fleet of ships and heavy equipment, Zirbel said.
“The question has to be raised,” Zirbel said. “Are we better off being based in Milwaukee, or are we better off being based in Chicago or somewhere else?”
As Zirbel considers long-term operating costs, port officials are trying to balance lease concerns with the desire to keep Gillen’s more than 200 jobs in Milwaukee.
“We certainly want to do what we can to make sure they stay here,” said Kris Martinsek, a member of the Board of Harbor Commissioners. “And, from the port’s perspective, they are such an important partner with us.”
Port officials are concerned a lease with Gillen could leave the port with less valuable property. The 15 acres Gillen would lease are on the harbor, but the property is part of a 30-acre vacant lot, and Gillen would lease the only waterside land on the property, said Port Director Eric Reinelt.
“They want the best 15 acres on the water,” he said, “and that would leave 15 acres landlocked, and it’s an issue we have to deal with.”
A Port of Milwaukee Economic Development Advisory Committee on Friday voted to negotiate some kind of easement agreement with Gillen by which companies that lease the inland portion of the property can have access to the waterfront. The port plans to send a draft lease to the Board of Harbor Commissioners within two months.
Zirbel said the company is negotiating with the port to lease more than 15 acres of the port site and build a new office and headquarters on the inland portion. Zirbel said he is not familiar with questions about waterfront access and would have to learn some details before commenting.
He also said he prefers making a final decision on Gillen’s new location this year.
“We’ve been a part of the city of Milwaukee community for 100 years,” he said. “Our goal and our preference is to stay here.”