State, City Of Milwaukee Promise Sizable Help For Komatsu To Move To Harbor District

Sep 27, 2018

The state of Wisconsin and City of Milwaukee are promising more than $60 million in financial incentives to help the Komatsu Mining Corporation move from West Milwaukee to land along Miwaukee’s inner harbor.

Komatsu, which took over the former Joy Global and P&H plant in West Milwaukee about two years ago, says its $285 million South Harbor Campus will include new offices, manufacturing and training facilities, a company museum and store, and a public RiverWalk along the Kinnickinnic River.

Komatsu / P&H mining equipment on display.
Credit Chuck Quirmbach

The international firm, part of Tokyo-based Komatsu Ltd., says it currently employs around 600 people in the Milwaukee area.  Company leaders say they hope to increase that number to around 1,000 within the next 12 years.

Wisconsin Gov. Scott Walker attended a Thursday morning ceremony announcing the project. He told reporters that the Wisconsin Economic Development Corporation (WEDC) will provide Komatsu with $59.5 million in state income tax credits by the year 2030, if certain benchmarks are met - including preserving the firm's current local workforce.

“Plus, new jobs, Walker added. “It's tied into the $285 million investment. It's tied into what their requirements are for supply chain (suppliers) and all the other components. So, it's a very detailed, performance-based mechanism, and they have to hit or exceed those metrics to fully get the tax credits.”

Komatsu plans to build on this 54-acre lot, just south of E. Greenfield Ave.
Credit Chuck Quirmbach

The Republican governor, who is in a close re-election battle against Democratic nominee Tony Evers, said he and the WEDC Board of Directors have approved the contract with Komatsu now because, "We thought it would be critically important to put a stake in the ground, to let the (Komatsu) employees know, the (mining) industry know, and let others know that Wisconsin and Milwaukee is the place Komatsu's going to keep their focus and headquarters when it comes to mining equipment."

“We wanted to make sure that wasn't going anywhere else in the world, " Walker said.

The land Komatsu is eyeing still needs environmental clean-up. Nearly 100 years ago, it was the site of a manufactured gas facility – Solvay Coke & Gas Company. The clean-up plans are being reviewed by the U.S. Environmental Protection Agency and Wisconsin Department of Natural Resources.

READ: What Once Stood On The Vacant Acres In Milwaukee's Harbor?

The company says groundbreaking won't take place until next year, and the complex won't be completed until 2022.

Walker said the state will have continuing discussions with West Milwaukee officials about what will replace the Komatsu facility at 4400 W. National Ave.

Milwaukee Mayor Tom Barrett speaking at the Komatsu announcement.
Credit Chuck Quirmbach

At the announcement, Milwaukee Mayor Tom Barrett said he wants Milwaukee's assistance for the South Harbor Campus to come in two ways: $15 million in Tax Incremental Financing (TIF), which would pay for the Riverwalk, and a $13-25 million TIF for the site development.

"That's going to depend on several things,” he said. “How many jobs there are, and what the tax capacity is of this site, once it's developed. The more the company develops, the more tax capacity there is.”

According to a city document, under Tax Incremental Financing, Milwaukee can capture increased tax revenues generated by economic development projects and use the money to pay back city funds spent at the front end of the development - most often for streets, sewer, environmental remediation, or other site improvements.

Support is provided by Dr. Lawrence and Mrs. Hannah Goodman for Innovation reporting.

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