Diverging developments

Manitowoc County deals with divergent results as legacy buildings left behind

Posted on Apr 1, 2016 :: Economic Development
Sean P. Johnson
Posted by , Insight on Business Staff Writer

The economic convulsions that rattled some of Manitowoc County’s largest employers in decades past continue to reverberate in a Dickensian tale of two cities on the shores of Lake Michigan.

Both Hamilton Manufacturing in Two Rivers and Mirro Bakeware in Manitowoc employed hundreds in massive manufacturing complexes the companies built in the two cities throughout the 1900s. But as industrial competition changed, so did the need for the phalanx of buildings that stood in each community.

Eventually, both companies departed, and that’s where the two communities’ paths diverge.

For Two Rivers, the successors to Hamilton Manufacturing — now Fisher Scientific — spent nearly two years salvaging and demolishing the 1.2 million-square-foot complex, clearing more than 12 acres of riverfront property for potential development. The company did so at its own expense.

“It really creates a unique site. I’m not sure there is anything like it around the Great Lakes,” says Greg Buckley, city manager of Two Rivers. “They were intent on not leaving vacant buildings behind.”

When coupled with an adjacent 3.5-acre site recently cleared by Eggers Industries after it relocated to another facility in the city, there are nearly 16 acres of riverfront property available for the first time in perhaps a century. Both sites are still privately-held, however, and no specific plans have been announced.

“You’re on the river and just 30 seconds away from the lake,” Buckley says. “It’s pretty hard to beat that.”

In Manitowoc, things have not gone as well.

After a rapid succession of different owners in the late 1990s, Mirro’s remaining operations were moved out and the 900,000-square-foot industrial complex was shuttered in 2003. While the current owner, St. Louis businessman Eric Spirtas, has performed some salvage and demolition through his company Niagara Worldwide, there is an impasse between the company and the city of Manitowoc over the pace of progress.

The city wants the buildings, which have become both a physical and psychological eyesore, torn down immediately so the property, which is in the heart of the city, can be redeveloped. The owner says soft markets for salvaged materials and lack of tenant prospects dictate more time is necessary.

Manitowoc officials have suggested spending more than $2 million to do the work.

“It’s unfortunate it could wind up being at the taxpayers’ expense,” says Peter Wills, executive director of Progress Lakeshore.

While the future of the main Mirro site may be clouded, there are positives radiating from some of the ancillary buildings, particularly Mirro plant #3, now being renovated as loft apartments targeted for low-income residents and military veterans.

Known as the Artist Lofts, the $9.4 million renovation project is expected to be completed by June.

“It’s been a long time coming,” says Wills. “We’ve probably spent at least two years in developing the project.”

The renovated building will feature 40 loft style apartments. The internal framing has already begun to transform the former warehouse building since its December groundbreaking. Distinct rooms and hallways have emerged from the cavernous space as drywall work neared completion in early March.

Built in 1929 and used to produce components for B-29 bombers during WWII, the 88,000-square-foot building will be listed on the National Register of Historic Places.

Financing for the $9.4 million involves a collaboration of public and private partners including owners Impact Seven, the City of Manitowoc, Wisconsin Department of Administration, the Wisconsin
Housing and Economic Development Authority and the Environmental Protection Agency.

Heavy lifting

While the city of Manitowoc continues to wrestle with the main Mirro site, regional economic officials are also keeping a watchful eye on the spinoff of Manitowoc Foodservice from The Manitowoc Company.

Manitowoc Co. will be a cranes- only company going forward. The two divisions often stabilized the path through economic cycles while part of the same company. With an economic slowdown hitting energy and mining sectors hard — as well as heavy equipment manufacturers — there is a concern how the companies will fare independent of one another.

The year-long effort to split the company was completed in mid-February when Manitowoc Foodservice was officially spun off as an independent company.

In mid-March, the company announced measures designed to “right size” Manitowoc Cranes’ business operations to meet current demand. Those actions included layoffs in the company’s Shady Grove, Pa., and Manitowoc facilities, as well as other initiatives.

“This cycle has proven to be different from any other in recent past,” says Barry L. Pennypacker, who joined The Manitowoc Company as president in December of 2015. “Our business has great potential for growth and improved profitability. However, there are clear opportunities to improve near-term performance, while at the same time positioning the company to extend its industry leadership.”

Wind power

While heavy equipment experiences a slowdown, wind is picking up.

Broadwind Energy, an Illinois-based infrastructure and integration company to the energy sector, in early March announced a $28 million deal for wind turbine towers with a turbine manufacturer. The towers will be built in the company’s Manitowoc construction facility.

Delivery of the new towers is expected in 2016. That will mean plenty of work for crews at the Manitowoc tower facility, as the company has been steadily working on a healthy backlog of orders that built up in 2014 and 2015.

“Our experienced team in Manitowoc has built more than 2,000 wind towers since 2008,” says Broadwind interim CEO Stephanie Kushner. “We continue to be in late-stage discussions to fill the remaining capacity for 2016 and beyond.”

Weak demand from the energy sector in 2015 had slowed the company’s sales significantly, a drop of about 12 percent from 2014. But an $8 million order in December 2015 following the passage of a production tax credit signaled an uptick for the industry.

The PTC (electricity production tax credit) for wind and other renewable energy technologies expired at the end of 2013. Investment in wind power production hit its lowest levels since 2004 when the credit was allowed to lapse. 

Considered the U.S. wind industry’s most important federal tax incentive, the PTC provides wind developers with a credit of 2.3 cents per kilowatt hour for electricity generated to the power grid. Congress renewed the credit as part of a budget bill passed in December 2015.