Franklin First Ticknor Report

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Franklin First Ticknor Report TICKNOR & ASSOCIATES FRANKLIN FIRST Strategies to Bring Balance to Franklin’s Tax Base The City of Franklin Economic Development Strategic Plan Phase I Office/Industrial Market Analysis Prepared by: Ticknor & Associates Economic Development Consultants 833 Elm St., Suite 203 Winnetka, Illinois 60093 Prepared in Association with: Economic Development Services Minneapolis, Minnesota March, 2000 TICKNOR & ASSOCIATES Table of Contents I. Market Performance to Date 1 The High Acceptance of the Franklin Business Park 1 Historic Franklin Business Park Absorption 1 II. The External Business Attraction Market 3 III. Summary of Key Competitors 5 South Milwaukee County 5 Nearby West Suburban 6 Racine and Kenosha Counties 7 IV. Planning for the Future 8 Forecasting Future Business Park Demand 8 Remaining Land in the Franklin Business Park 9 V. Recommendations 10 Begin Now to Develop 400+ Acres Additional Primary Business Park Land Linked to the Franklin Business Park 10 Access Determines Location 10 Market Niche and Primary Park Characteristics 10 Physical Development 10 Pricing 11 Rationale for Secondary Business Park Development 11 Office Development 13 Workforce Issues 13 Appendix Table 1. Competitive Business Parks 14 Appendix Table 2. Future Development Plans 19 Franklin First: Phase I, Office/Industrial Market Analysis March, 2000 Prepared in association with Economic Development Services TICKNOR & ASSOCIATES List of Tables Table Title Page 1 Historic Land Absorption: Franklin Business Park 2 2 Forward Wisconsin Southeast Wisconsin Business Attraction Results 4 3 South Milwaukee County Inventory and Absorption (Fall, 1999) 5 4 Nearby West Suburban Inventory and Absorption (Fall, 1999) 6 5 Racine and Kenosha county Inventory and Absorption (Fall, 1999) 7 6 Franklin Business Park Land Absorption Assumptions (February, 2000) 9 7 Lot Coverage Ratios, Small and Large Users 12 Appendix 1. Competitive Business Parks (Fall, 1999) 14 Appendix 2. Future Development Plans (Fall, 1999) 19 Franklin First: Phase I, Office/Industrial Market Analysis March, 2000 Prepared in association with Economic Development Services TICKNOR & ASSOCIATES I. Market Performance to Date The High Market Acceptance of the Franklin Business Park The marketplace regards the Franklin Business Park positively. § It is a quality business park, with strong design standards, good infrastructure and wide roads. It filled an important void in the Milwaukee County marketplace. § The city positions the park appropriately in terms of types of users. § The price is competitive § Timing has been excellent, filling a market void during the longest period of economic boom in American history. § Brokers and developers regard the city’s attitude and service positively. The city elected to work with the Mooney LeSage Group in marketing the property, but it maintains a reputation for working well with the entire brokerage community. § Developers build speculative manufacturing and distribution buildings in the Park, an important added market appeal to corporate end users. § Franklin companies, the ultimate Park customers, report that the City of Franklin is very easy to work with in terms of permitting and regulation. Historic Franklin Business Park Absorption Since opening the Park in March 1994, Franklin has sold 221 acres. (For detailed information see Table 1: Franklin Business Park: Historic Land Absorption on the following page.) § Land sales started slowly, reaching only 26 acres in the first two years. § In the three years from March 1996 through 1999, demand rose to 59 acres per year, peaking at 69 acres in the March 1997-1998 period. § The best years of land absorption included larger parcel sales to Gardetto’s (now Baptistas) and Harley Davidson. The largest single individual sale has been 26 acres. § Many users have been small. The average parcel size has been around 5 acres. § Although land sales were down significantly in 1999, Barry Chavin with MLG indicated that there was a concentration of closing before year-end in 1998-99 and that current activity on the park is also very strong. Franklin First: Phase I, Office/Industrial Market Analysis March, 2000 Prepared in association with Economic Development Services Page 1 TICKNOR & ASSOCIATES Table 1. Historic Land Absorption: Franklin Business Park Year # of Total Average Revenue: Average $ per (March ) Sales Acres # of Acres Land Sales Acre 1994-95 6 17.71 2.95 $761,125 $42,977 1995-96 2 8.35 4.17 $410,089 $49,112 1996-97 10 54.41 5.44 $1,948,349 $35,808 1997-98 10 69.38 6.94 $2,840,944 $40,948 1998-99 10 51.91 5.19 $2,632,533 $50,713 1999-00 5 19.52 3.9 $946,828 $48,505 TOTAL 43 221.28 - $9,539,778 - ANNUAL 7.2 36.88 5.1 $1,589,963 $43,112 AVERAGE Smaller and medium industrial and distribution operations from within metropolitan Milwaukee have been the park’s predominate marketing niche. The Park has gained strong acceptance among Milwaukee area firms, especially expanding firms already located in the southside market. Community leaders and Franklin citizens express interest in attracting more office development to Franklin. This is logical, because office development typically yields the highest tax base per acre and because Franklin has a rapidly growing white-collar population. The metropolitan Milwaukee broker/developer community does not perceive Franklin as an office market. § They cite the difficulties encountered in filling the speculative office space that has remained vacant in the Franklin Business Park for several years. § They still perceive Franklin as a blue-collar area, despite significant demographic shifts. § Office operations typically expand near their existing operations. This pattern biases development away from Franklin. § Office operations typically locate near support services such as restaurants, hotels and shopping. Changing the image of Franklin over time will be important in order to attract office operations over time . Franklin First: Phase I, Office/Industrial Market Analysis March, 2000 Prepared in association with Economic Development Services Page 2 TICKNOR & ASSOCIATES II. The External Business Attraction Market Although the 1992 Franklin Economic Development Strategy prepared by Fantus Consulting anticipated that the majority of Business Park land absorption would come from companies outside of metropolitan Milwaukee rather than those within, the opposite has been true. But only one Park tenant, Elgin Molded Plastics, has come from beyond the metropolitan area. This heavy reliance upon the internal economy is the typical pattern for other Milwaukee-area communities and for most of Wisconsin. Kenosha County, which is part of the Chicago market, and St. Croix, Pierce, and Dunn Counties, which are part of the Twin Cities markets, are major exceptions. Larger economic development organizations serving mid-sized Wisconsin regions, such as Wausau, Beloit, Fond du Lac, or Appleton, have occasional success at external business attraction, bringing in a new company every second or third year. A loose consortium of players, including Milwaukee and Racine Counties, the City of Milwaukee, several metropolitan area communities, the Metropolitan Milwaukee Association of Commerce, and Wisconsin Electric Power participate in REP, the Southeastern Wisconsin Regional Economic Partnership. They have a brochure, sponsor a reception for Chicago-area commercial and industrial real estate brokers, and make episodic marketing trips to metropolitan Chicago to call on site selection consultants, brokers, and interested companies, but neither REP’s budget or its results indicate strong market success. Forward Wisconsin, a statewide marketing partnership supported by both the state and the private sector, provides sustained business attraction marketing that might potentially impact Franklin. § It has an economic development recruitment professional in its Milwaukee office, who concentrates on the metropolitan Chicago market. She maintains a second office in the Loop, calls frequently on Chicago area site consultants, brokers, and target companies. § Forward also maintains a regular marketing program through trade shows and direct mail to target companies in target industries. § Lastly, Forward serves as the information fulfillment arm and site tour coordinating point for out- of-state prospects considering location in Wisconsin. Although it has a very small staff and budget compared to most other state marketing functions, Forward’s track record also points out the limitations of the external marketplace. Franklin First: Phase I, Office/Industrial Market Analysis March, 2000 Prepared in association with Economic Development Services Page 3 TICKNOR & ASSOCIATES Table 2. Forward Wisconsin’s Southeast Wisconsin Marketing Results Year Company Location Jobs 1999 American General Milwaukee 300 Sunstrand Pleasant Prairie 90 Rockwell International Milwaukee 150 Eco-Tech Burlington 30 1998 Elgin Molded Plastics Franklin 12 Interstate Glass & Metal Kenosha 1997 ARTE, Inc. Williams Bay 5 Asyst Technologies Kenosha 65 Cherry Electric Pleasant Prairie 700 Midwest Auto Clubs Milwaukee 45 R&L Spring Lake Geneva 78 The one major Southeast Wisconsin success story in terms of external business attraction has been Lakeview Corporate Park. This 1,650-acre WISPARK development focuses upon the Lake County and greater metropolitan Chicago marketplace, taking strong advantage of its border location, approximately 20 miles south of Franklin, right on I-94. Its marketing staff, which includes the former head of economic development
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