Komatsu Mining Corp. announced plans on Thursday to build a $285 million facility in Milwaukee, moving from the western suburbs to a site in the city’s Harbor District.
The 2.5 million-square-foot building is to be built at a 54-acre site near where the Solvay Coke company had once had a machine shop, off South First Street. The new headquarters is to be used for manufacturing and training and to have heat-treatment and fabrication shops; research-and-development and robotics laboratories; an office complex and a data center; and a training and conference center.
“This is not just about keeping a company here, this is about them making more than a quarter of a billion dollar investment,” said Gov. Scott Walker, who delivered remarks at an event marking the company’s announcement on Thursday.
The project, which is scheduled to wrap up in 2022, could create some 2,000 construction jobs. Komatsu expects to break ground sometime next year. It has yet to name a construction manager for the project, said Jeff Dawes, president and CEO of the company.
“We’re still in the very early stages,” he said.
The building will have 170,000 square feet of office space, a 20,000-square-feet museum and 410,000 square feet of manufacturing space. Two of Komatsu’s current operations in the Milwaukee area will be consolidated into the new headquarters, including one at a site in West Milwaukee, along West National Avenue.
It’s the second big investment in Milwaukee’s recovering Harbor District in recent months. The Brownsville-based utility contractor Michels Corp. announced plans in early August to build a $100 million multi-phase complex at an underused site at West Becher Street and 1st Street, bordered on two sides by the Kinnickinnic River.
The Komatsu project could also receive some $85 million worth of incentives from the state and city.
The Wisconsin Economic Development Corp. is offering the company as much as $59.5 million worth of state income-tax credits over the next 12 years, and Milwaukee is offering tax incentives that could be worth up to $25 million over the next 25 years. The company’s ability to claim those credits will depend on how many people it hires and how much it spends on its headquarters and on equipment, goods and services it buys from companies in Wisconsin.
Komatsu estimates the project could lead it to hire as many 443 employees. The company now employs about 600 in Milwaukee. The company also spends about $150 million yearly with Wisconsin companies.
Milwaukee Mayor Tom Barrett said the city will create a tax-increment-finance district for the property and plans to use $15 million worth of bonding to build a riverwalk around the property. The city would also provide the company with between $13 million and $25 million worth of tax incentives, the final amount depending on its performance.
Milwaukee owns about 13 acres long-used for coal storage on the north side of the property and We Energies owns about 46 acres. The utility, through its Wisconsin Gas affiliate, is conducting an environmental cleanup at the site and plans to sell the property to Komatsu for about $7 million to recover its costs.
“Everybody has come into this with eyes wide open as to the condition of the property and what needs to be done,” Barrett said. “This was not something that was cooked up on a weekend.”
We Energies faces a lawsuit filed in April by Ohio-based Cliffs Mining, accusing the utility of cutting it out of a remediation study it was supposed to perform at the direction of the Environmental Protection Agency. Cliffs argues We Energies pursued a costlier-than-necessary remediation plan “motivated by its desire to quickly redevelop the Site, from which WE Energies intends to profit,” according to Cliffs’ complaint.
The utility has filed to dismiss the lawsuit, and Gale Klappa, CEO of WEC Energy Group, said on Thursday that the lawsuit wouldn’t affect Komatsu’s redevelopment plans.
Komatsu Mining Corp., a subsidiary of Tokyo-based Komatsu Limited, came to have its North American headquarters in Milwaukee in 2017 with the purchase of the international mining company Joy Global.
“Together we are investing in Milwaukee’s future as a manufacturing stronghold and valued employer,” said John Koetz, president of surface mining at Komatsu Mining Corp. “We are preserving existing jobs, laying the groundwork for new employment opportunities, investing in the workforce of tomorrow, and helping attract talent to the area. Milwaukee is a great place for manufacturing. We are proud of our history here and excited to start building our future.”Follow @natebeck9