In a huge boost to Milwaukee’s redeveloping Harbor District, Komatsu Mining Corp. will create a new corporate campus on a desolate former industrial site — with around 1,000 jobs that include 600 local employees who will move there.
Komatsu's future $285 million development will house manufacturing operations now based at 4400 W. National Ave., West Milwaukee, as well as corporate offices at Honey Creek Corporate Center, 135 S. 84th St., on Milwaukee's far west side.
They will move by 2022 to a 60-acre site overlooking the inner harbor at the end of East Greenfield Avenue, it was announced Thursday by company executives and state and local officials.
It’s the largest development site in the Harbor District, where work is underway to convert vacant lots and underused buildings into a hub of industrial jobs, housing, retail space and other new uses.
Komatsu hopes to break ground by fall 2019.
The corporate campus, which could eventually total 2.5 million square feet, will provide room for Komatsu to have around 1,000 full-time employees within 12 years — and possibly 1,300 jobs in the long term.
Wisconsin Economic Development Corp. has agreed to provide the company $59.5 million in state income tax credits over 12 years.
The amount of those tax credits will depend on the number of jobs created and retained, the amount of capital investment, and the amount spent on purchasing equipment, goods and services from Wisconsin-based companies, the WEDC said.
Meanwhile, the city is proposing to provide up to $40 million in funds through new property tax revenue generated by Komatsu's corporate campus. That would come through a tax incremental financing district, which would need Common Council approval.
Around $15 million would pay for a long stretch of public RiverWalk, extending from the end of Greenfield Avenue up the Kinnickinnic River to South Kinnickinnic Avenue.
Also, $13 million to $25 million would go to Komatsu to help reduce its development costs.
The amount of those funds would depend on the value of the buildings, as well as the number of jobs created, said city Development Commissioner Rocky Marcoux.
The proposed agreement calls for Komatsu to have 946 jobs within 12 years of moving to the Harbor District, he said.
That job count could someday total 1,300 workers, Marcoux said.
"It's one of our most challenged sites," Marcoux said. "It's worth the investment."
Also, the development will create construction jobs as well as additional jobs at Komatsu's suppliers, said Gov. Scott Walker.
"It's not just the people working at Komatsu," Walker said.
The new buildings at the complex, which Komatsu calls its South Harbor campus, will include:
- Machine, heat treat and fabrication shops, as well as technology, research and development, and robotics labs.
- An office complex and data center, along with a training and conference center.
- A museum and store that sells toy mining equipment, Komatsu-logo shirts and other items.
That initial phase will feature 170,000 square feet of office space and a 500-stall parking structure on what is now a city-owned site overlooking the harbor, Marcoux said.
It will include 420,000 square feet of manufacturing space to be built on the adjacent former Milwaukee Solvay Coke Co. site, he said. There also will be a 20,000-square-foot museum and training building.
Executives at Komatsu, which bought the former Joy Global Inc. in 2017, chose the Harbor District in part because it provides enough open space for "state-of-the-art facilities that expand our capabilities on a global scale,” said Jeff Dawes, president and chief executive officer.
"All of this is made possible by mining," Dawes said.
The campus will be built with a goal of near-zero carbon emissions.
Solar panels, wind spires, a geo-thermal heating system, green spaces, LED lighting and other sustainable solutions are designed to reduce energy consumption by 75 percent and water consumption by 80 percent from the current facilities, Dawes said.
The development site combines the city-owned harbor property, 13 acres formerly used for coal storage, with the 47-acre former Solvay Coke site, 311 E. Greenfield Ave.
The former Solvay site lies primarily south of Greenfield Avenue, roughly two blocks east of South First Street.
Komatsu's development will be the largest project in the Harbor District, where city officials have been focusing over the past few years.
Harbor District development
The Harbor District is about 1,000 acres bordered roughly by South First Street, the lakefront, the Milwaukee River and Bay Street/Becher Street.
The district land and water use plan, approved this year by the Common Council and Mayor Tom Barrett, calls for converting empty lots and other sites into such new uses as light industrial buildings, offices, housing, retail space and parks.
"We had a vision to transform this part of the city," Barrett said.
The district received another big boost in August.
That's when utilities and infrastructure contractor Michels Corp. announced plans for River 1, a $100 million mixed-use development that would overlook the Kinnickinnic River west of South First Street and north of West Becher Street.
River 1's $49 million first phase will feature an eight-story building with about 130,000 square feet that Michels will eventually anchor with around 400 employees for its Milwaukee operations.
Other phases could include additional office buildings, as well as a hotel and an apartment building with street-level restaurant space.
Michels executives said the new office will help keep and retain younger employees who want to work in an urban environment. They also cited the relatively short drive to Mitchell International Airport.
For Komatsu, the Harbor District site provides space for future growth as well as improved logistics.
Currently, when Komatsu ships out large pieces of mining equipment by Great Lakes freighters, those products travel between the West Milwaukee factory complex and the harbor by a slow, circuitous route to handle wide loads.
With the South Harbor campus, the equipment can be more efficiently loaded on to freighters.
The Solvay site does face a challenge involving truck access.
That's now limited by a low railroad overpass above East Greenfield Avenue, making it impossible for large trucks to reach the area.
However, the portion of the street below the overpass will be lowered by about a foot to make truck access possible, Marcoux said.
Also, Komatsu will build an access road to Kinnickinnic Avenue at the site's southern end, he said.
Komatsu's plans drew praise from business leaders.
“We’re delighted that Komatsu is making this significant investment in Milwaukee’s Harbor District,” said Gale Klappa, co-chair of the Milwaukee 7 regional economic development group and chairman and CEO of WEC Energy Group.
However, it will leave a void to fill in West Milwaukee, where the company has buildings totaling 1.1 million square feet on 44 acres.
Komatsu executives have been talking to village officials about creating a redevelopment plan for the National Avenue site, said Caley Clinton, manager of marketing communications and public relations.