Top Ten of 2007We've scavenged the B2B library to put together out Top 10 business stories in the region for 2007Compiled by the B2B StaffWhile in the process of assembling our annual B2B list of the top local business stories of the year gone by, our staff collectively discovered that 2007 was, well, let’s just say it was a little bland compared with recent years. And that’s all right. Top Ten lists don’t always have to be about plant closings, development disappointments or economic chaos.
No one story jumped out at us as being a definitive choice for the No. 1 spot. All had a medium level of interest, but nothing was truly shocking. While these kinds of lists are always arbitrary and subjective, we attempted to capture those topics our readers discussed often, those topics that ultimately drove the bottom line, and those topics that create the most opportunity for the future.
With that in mind, here’s our list of the top 10 business stories in the region for 2007:
1. Valley Fair Funeral
One of the country’s first enclosed shopping malls met its end in mid-July when demolition crews began disassembling the former Valley Fair Mall in Appleton. Owners of the property plan to redevelop it for retail and office use. At the far western edge, U.S. Oil of Combined Locks built its newest Express Convenience Center, which opened in late November.
In August, the City of Appleton created a $2.1 million tax incremental finance district to include the former mall property, as well as other Memorial Drive properties in the Winnebago County portion of Appleton. TIF funds will be used as developer incentives, revitalization grants, and planning and design of streetscape amenities and public improvements
2. School district problems
Wisconsin’s formula for funding public education and legislatively-controlled revenue caps have gradually eroded many school district’s ability to keep up with the rise in inflation, the results of which were more visible in 2007 than in any previous year.
In early February, Appleton School District officials said the school system’s 2007-08 budget could face a $3.3 million budget deficit and projected cutting 15 teaching positions – it eventually eliminated 17 district staff. That same month, the Kaukauna Board of Education eliminated five positions and restructured various other positions to prepare for a projected $907,000 shortfall in 2007-08.
In Fond du Lac, its board of education faced a $1.5 million deficit in its 2007-08 budget, but figured it could make up for the shortfall by raising taxes and some budget maneuvering. In Menasha, the board of education decided to use $800,000 in reserve funds to offset a projected budget deficit.
Neenah residents approved a referendum in April allowing its school district to tax property owners more than $2.6 million above the state imposed revenue limit. The board of education also decided in May to consolidate the Hoover and Taft school attendance areas, relocate its early learning center from Washington school to Taft, and redraw elementary school attendance boundaries in order to eliminate in-city bussing, all projected to provide an annual savings of $750,000.
Lastly, residents of Little Chute approved a referendum in February to borrow $9.7 million for various improvements at both the elementary school and the middle/high school complex and to several outdoor athletic fields. Voters also allowed the district to tax them an additional $1 million each year for the next five years.
3. Oshkosh riverfront development
Where the Five Rivers Resort and indoor water park complex dominated redevelopment discussions in Oshkosh during 2006, several proposals from Akcess Acquisition Group to build on 13 acres of former industrial brownfields captured attention in 2007.
In early March, the development group proposed a three-story, 55,000-sq. ft. commercial office building for the site. In April, Akcess announced it was partnering with nearby University of Wisconsin-Oshkosh to study the feasibility of a 120-unit condominium project as part of the university’s proposed Living, Learning and Serving Community plan. By late June, developers announced a collaborative plan with Supple Restaurant Group for a 98-unit hotel with meeting space and a riverfront restaurant.
None of the proposed developments had broken ground by late December, but the 98-unit Cambria Suites hotel is expected to begin construction in early 2008.
4. State budget melée
Following several months of wrangling, state legislators and the governor reached an agreement in late October to end the Wisconsin budget logjam. Negotiations had continued nearly 120 days past the June 30 deadline, with the delay being credited for many of the funding issues for public school districts, which were required to set their own budgets prior to the final version of the state budget.
The $58 billion biennial budget proposal increased taxes on cigarettes by $1 a pack and rejected a proposed tax on hospitals. Revenues generated by the cigarette tax increase are expected to make all children and thousands of low-income adults eligible for state-subsidized health insurance, as well as fund $30 million in smoking prevention programs. The hospital tax would have leveraged more federal dollars through Medicaid for Wisconsin residents.
The budget package did not include a universal health insurance proposal that would have been funded by a $15 billion payroll tax on employers and an additional $3 billion by individuals.
5. Appleton riverfront development
In early May, a Colorado-based real estate group headed by an Appleton native proposed redeveloping 15 acres of Fox River front property near downtown Appleton for a mix of residences, shops, offices and a restaurant. The real estate group, Tanesay Developments, accepted an offer to purchase the property from Kaukauna Utilities for $2.2 million, and hosted a series of public input sessions during the summer on the proposal. The group plans to begin construction of the development in the summer 2008.
6. Appleton water filtration woes
In late October, City of Appleton officials reported poor welds and leaks at the city’s 5-year-old, $54 million drinking water-filtration plant could cost as much as $5 million to repair. The state-of-the-art water filtration plant has had a variety of production capacity issues since it began servicing water utility residents in 2001, and has faced even greater production issues during colder weather.
City officials investigated possible liabilities against the design and construction contractors for the plant, and eventually planned to conduct a formal third-party study into the design and construction of the facility. The city council ultimately determined in December that such a study could delay necessary remediation of problems at the plant by contractors.
As of late December, city officials continued to consider possible legal action against companies involved in the project.
7. Oshkosh Convention Center & tourism improvements
In early April, the Oshkosh Common Council increased the city’s hotel room tax by 2 percent up to 10 percent, making it the highest in the state. The additional $200,000 the tax increase should generate each year will be used to pay off debt on the Oshkosh Convention Center and finance capital improvements to the facility. To help the effort, the Oshkosh Area Community Foundation pledged a $1 million low-interest loan to the city in May to help pay for the estimated $2.4 million in improvements to the convention center, which are expected to be complete in late 2008.
The Oshkosh Convention & Visitors Bureau also said it would use proceeds from the room tax increase to establish a development fund for future capital projects. In October, it committed $1.5 million to the Oshkosh Sports Complex during the next 10 years, as well as a smaller gift to the disc golf course at Winnebago County Park.
8. Job fluctuations
Job loss always plays a crucial role among major business stories of each year, but in 2007, there appeared to be far fewer mass layoffs – those classified by the state as 50 jobs or more – than in recent previous years in our region.
In early January, soon after R.R. Donnelley finalized its acquisition of Banta in Menasha, it was announced that 85 employees would be laid off from Banta’s headquarters due to administrative redundancies with R.R. Donnelley corporate headquarters. In early March, Mercury Marine in Fond du Lac laid off 51 employees because production slowed down as a result of increasing inventory. A handful of employees accepted an early retirement option, while about 40 employees were recalled in April because of an improved warm-weather business climate.
Kimberly-Clark Corp. began phasing out the remaining production at its Lakeview diaper plant – an initiative which began in 2006 – by laying off about 280 employees at the end of August. Production finally ceased altogether in early December at the plant, which employed as many as 700 people at the beginning of 2006.
In early October, JMS Converters of Appleton filed for bankruptcy and closed its doors, leaving nearly 85 employees out of work.
On the flip side, job gains were announced by Miles Kimball Co. in Oshkosh during January, where the company announced it would move more than 100 jobs to Oshkosh from a call center in Las Vegas.
West Business Services in Appleton said in May that it would hire an additional 100 sales people, then two months later announced it would hire yet another 100 sales staff.
In early July, Outlook Group in Neenah added about 50 jobs after signing a five-year contract with a sewing pattern maker.
9. Paper industry tax loophole
Paper companies across the state found a way to save money on property taxes by taking advantage of the so-called Newark Loophole, a tax break created more than 50 years ago for manufacturers who recycle waste by-products into other goods.
SCA Tissue in Menasha became the first local papermaker to take advantage of a 2004 Wisconsin Tax Appeals Commission ruling when it petitioned to have a portion of its local operations exempt from property tax, an estimated savings of nearly $250,000. Facing no other option than to comply with the set precedent, the City of Menasha Common Council approved a $117,568 refund to SCA Tissue in mid-July toward its 2006 property tax bill.
In early August, Wisconsin’s Legislature unanimously approved Senate Bill 122, which closed the property tax exemption loophole used by nine different pulp and paper product manufacturers in Wisconsin.
10. Grand scale charity funding
A landmark charitable fund was established by U.S. Oil Co. of Combined Locks and J. J. Keller Foundation of Neenah in August to address the root causes of poverty, helping local residents struggling to secure basic life needs such as food, housing and health care. The fund was seeded with more than $1.1 million, and will begin dispersing grants in 2008.
In March, Oshkosh neurosurgeon Dr. Theresa Cheng donated $2.5 million to set up an endowment in her name through the Mercy Health Foundation that will serve needy patients in and out of the country, and help develop the neurosurgery program at Mercy Medical Center in Oshkosh.
Honorable mention (in no particular order)
Oshkosh Truck’s banner year
Oshkosh Truck Corp. continued its streak of record year after record year in 2007, and in February inked a two-year, $878 million contract with the U.S. Army to produce 1,857 heavy tactical transport vehicles and 2,599 new trailers.
For its 2007 fiscal year, the company rang up receipts of $6.3 billion, nearly double the $3.4 billion recorded in fiscal 2006, a sales total which would rank it at No. 362 on the 2007 Fortune 500 listing. The firm’s substantial revenue growth was primarily due to the 2006 acquisitions of JLG Industries, Iowa Mold Tooling Co. and AK Specialty Vehicles.
Time Warner expansion
Time Warner Cable of Wisconsin began construction in October on an $18 million, 130,000-sq. ft. customer service and operations facility in Appleton’s SouthPointe Commerce Park. The City of Appleton approved contributing $3.5 million in tax incremental financing to develop the site, and the state Department of Commerce awarded Time Warner more than $1 million in enterprise development tax credits.
The building project retains and will unite nearly 400 Time Warner jobs from six locations across the Fox Cities. The cable services provider expects to create as many as 300 more jobs in northeast Wisconsin after the completion of the new facility in December 2008.
Hortonville bypass
After years of site planning work and evaluation, the Wisconsin Department of Transportation made a final decision in late June to place a future State Road 15 bypass around Hortonville to the north of the village, rather than positioning the corridor south of the village. The long-awaited decision was said to have stalled residential and commercial development at the edges of Hortonville, where property owners anxiously waited to learn how the bypass corridor would impact their property. Construction on the bypass project isn’t expected to begin any earlier than 2016.
Baseball appeal in Fox Cities
Baseball has proven an important tourism and economic development tool in the Fox Cities in the past decade, playing host to the NCAA Division 3 World Series, the state high school championship tournament, and the Midwest League’s Wisconsin Timber Rattlers minor league team. New developments in 2007 would help accent that appeal.
In June, the Wisconsin Interscholastic Athletic Association agreed to keep the boys state baseball tournament at Time Warner Cable Field at Fox Cities Stadium through 2010. The tournament began playing in the Fox Cities in 1998.
Later in June, the Fox Cities Convention & Visitors Bureau donated $85,000 from its tourism development fund to upgrade the baseball and softball facilities at Appleton’s Memorial Park. The city of Appleton committed $430,000 toward the project, which includes a championship field. In August, Appleton was named host city of the 2009 Babe Ruth Baseball League 14-year-old World Series.
Menasha steam utility challenges
After recognizing the City of Menasha’s steam utility hadn’t been performing up to standards, the city’s Utilities Commission selected a Chicago-based firm to analyze and recommend solutions for its startup $40 million steam utility. An audit of the steam utility indicated it lost nearly $2 million from operations last year. The plant itself was 15 percent off on its projected steam production for 2006, and requires a number of improvements estimated to cost up to $500,000.
On the positive side, utility commissioners reported monthly financial figures for October and November 2007 were nearly break-even – including operations expanses and amortized debt payments – indicating a trend toward generating a profit.
Oshkosh 100 Block woes
A feather in the cap of downtown redevelopment in Oshkosh back in 2002, the seven-story 100 North Main apartment and retail building was handed over to a court-appointed receiver in August after the owners defaulted on the $6.1 million construction loan. The owners of the building, 100 Block LLC, owe Banker’s Bank of Madison $5.9 million in principal and interest.
The owners have also failed to pay their 2006 property taxes on the building, which is the only property supporting a $2.2 million tax incremental finance district created by city officials in 2001 to help cover 25 percent of the building’s $8.8 million construction cost. In early September, the City of Oshkosh Common Council approved a plan to borrow funds from two other successful TIF districts to bail out the TIF district created for 100 North Main.
Fox Cities convention center study
The Fox Cities Convention & Visitors Bureau and Fox Cities Chamber of Commerce and Industry said in early October they will fund a $75,000 study to determine the feasibility of building a convention center. Appleton Mayor Tim Hanna established an ad-hoc committee in 2006 to consider the need for a convention center, and determined the Fox Cities could become more competitive in attracting state and regional conventions with a larger, more modern meeting space. City and business officials have discussed the idea of a convention center on and off since 1987.
Attitude Sports – St. Louis Church fire
Fire destroyed the historic, twin-spire St. Louis Church in Fond du Lac on March 19, which was under renovation to house Attitude Sports. The business had planned to move into the 135-year-old building in early April. New construction of the sporting goods store resumed on the site of the burned church in September.
Oshkosh city manager departure
Oshkosh City Manager Richard Wollangk announced his retirement in October following a series of closed-door meetings with the common council to evaluate his performance. The council agreed to a lump sum payout amounting to nearly $117,000.
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