Franklin’s image of having great difficulty attracting businesses is well known. Compounding the problem are the occasions when the city can’t retain businesses.
SEPT 4, 2019
The Journal Sentinel reported that in May of this year Strauss announced it would have a new facility near West Ryan and West Loomis roads in Franklin.
Then in August it was reported Strauss would spend $58 million to develop a 175,000-square-foot plant near that intersection.
Those plans changed quickly.
One could understand the decision of Strauss Brands. The company has outgrown their Franklin facility. Milwaukee will sell 20 acres to Strauss for a paltry sum of $1. Milwaukee will also kick in $4.5 million in financing. A new federal program initiated by the Trump administration called Opportunity Zones offers tax breaks for investments in low-income neighborhoods like the one that includes Century City. The Franklin site is not in an Opportunity Zone.
There’s more to this story.
On August 8, about three weeks before the news broke about Strauss expanding in Milwaukee, the private equity firm Insight Equity announced the acquisition of Strauss Brands, a leading producer of ethically raised specialty meats including American grass-fed and organic beef, as well as humanely raised veal and lamb.
“Due to the growth of our grass-fed and organic beef offerings, in addition to our core veal and lamb business, we have simply outgrown our current production facility,” said Randy Strauss, chief executive officer and grandson of company founder Milton Strauss.
The following is critical.
Strauss continued, “The investment by Insight Equity will provide the capital we need to develop a new state-of-the-art processing facility in Franklin, Wisconsin, which has been our home for over 50 years. We are grateful to the leaders of the City of Franklin for their support of this transformative project. Our location provides us with access to a stable base of exceptional employees and is ideally located to provide reliable delivery solutions to our customers via our in-house long-haul perishable trucking division.”
So what happened between early August and early September causing Strauss to pull the rug out from under Franklin and dramatically change course?
Strauss Brands chief financial officer Jerry Bussen told the Milwaukee Business Journal that unlike the city of Milwaukee, Franklin had offered no financial incentives.
“At the end of the day, ‘free’ is hard to compete with,” said Franklin Mayor Steve Olson.
“Labor force is a factor,” Bussen said. “Many of our plant employees commute from the (central city) area now (to Franklin). For us it came down to availability of workforce and speed to building. It’s important with our growing business that we get the building erected soon.”
“Since 1937, we have proudly operated both in and around Milwaukee,” said Strauss, and “with the support of Mayor Barrett and Milwaukee economic development officials, we are excited to announce our return to the city of Milwaukee, home of our operational roots.”
As for Franklin, Mayor Olson said Strauss Brands filed for a site plan and special-use permit.
“We’re moving forward,” Olson told the Business Journal. “I know we have a deal. We have a signed agreement with Strauss. We’re going to honor our side of this agreement. We expect that they’ll honor it on theirs.”
Sure didn’t sound like it. Note Strauss’ Bussen said they need to move quickly and I’m guessing they didn’t want to deal with Franklin’s notoriously lengthy economic development process.
Olson said the city was studying possible options to pursue. It was reported at the time Strauss could continue running the Franklin plant after the Milwaukee plant opens.
Bottom line: Strauss made a business decision. Milwaukee offered a much better deal.
OCTOBER 8, 2019
The Milwaukee Common Council’s Zoning, Neighborhoods and Development Committee voted unanimously to approve a plan to relocate Strauss from Franklin to Milwaukee’s north side.
Under the plan Strauss would develop a $60 million facility at Century City Business Park. The move would bring 250 jobs to Century City with the potential of that number doubling. Groundbreaking was set to take place in November with a plant opening in the summer of 2021.
The committee also voted to support selling the 20-acre development site, including a possible additional 5 acres, for $1.
The stage was now set for the full Milwaukee Common Council to consider and vote on the plan on October 15.
“I expected it to be overwhelmingly approved,” said downtown Milwaukee alderman Robert Bauman. “At this point there is no doubt about this passing. There will be no further hearings. I will say a little prayer every time I pass the site as an act of contrition for all the killing that will be occurring.” He also stated that what Strauss preferred to call a “meat harvesting plant” was in essence a “slaughterhouse,” a term that stuck with the news media and Milwaukee residents.
FOLLOWING THE COMMITTEE VOTE…
The Strauss saga took another turn.
The proposal had been supported by the alderman for the area, Khalif Rainey, who called it “an achievement for the City” and “for the Opportunity Zones program that has encouraged companies to think of areas like this one in new ways.”
But quickly a group called “Slaughter-Free Milwaukee” flooded Common Council members with form letters in opposition.
“Slaughterhouses create many detrimental consequences and immediate impacts on neighborhoods, particularly disadvantaged ones,” the group said in a statement. “Pollution and stench arise, vulnerable workers are exposed to brutality which can lead to post traumatic stress disorder, violence increases in the surrounding areas and impacts property values.”
The group did not substantiate the claims. Department of City Development Commissioner Rocky Marcoux countered that “The company leads the industry in humane treatment of animals…They do not source their products from feedlots. They are free range. They are grass fed. Their veal is cage free.”
As for bad smells, Marcoux said “I’ve been to the Franklin facility, there is no smell in the air… That’s with the equipment that was older than what will be installed here. This will be state-of-the-art.”
OCTOBER 15, 2019
The Milwaukee Common Council delayed a vote on whether to allow Strauss Brands of Franklin to build a slaughterhouse at Century City. The council instead sent the issue back to committee so aldermen can gather more public input.
The audience was packed with people opposed to the development. About 30 opponents gathered outside the council chambers before the meeting even began. Some carried signs that read “Stop the Slaughter” and “Slaughterhouses Harm Communities.”
Wanda Terry who lives near the site of the proposed meat processing plant said she was shocked when she heard that a plant was coming to her neighborhood. Terry said she worked at a tannery on the East Side.
“I was totally sick. You can’t eat. Your stomach is shaking. It’s nasty, it’s dirty, it’s germy, it’s everything. I don’t know where they are going to put the blood. Have you ever seen a blood pond? Go to Mississippi and check out Tyson. It’s terrible,” Terry said.
LOCAL ALDERMAN FLIP-FLOPS
Once a supporter, Khalif Rainey bowed to public pressure.
“When the administration initially brought the Strauss meat processing plant proposal forward, I considered the prospect of bringing 250 jobs to Century City, with more to follow,” Rainey said. “However, in the 72-hour period since the Common Council considered the proposal I have received an overwhelming response from neighbors in opposition to the project,” and he was longer in favor of the plan.
The expansion plans were dead. The reaction was swift, and brutal.
Milwaukee Metropolitan Association of Commerce Tim Sheehy said, “There’s no way to spin this other than that this is a serious blow to the prospects of marketing Century City as a location for capital investment and job growth, That was a roughly 2-year courtship (to attract the company to Milwaukee) to meet the self-expressed needs of Strauss to find a new location. I mean, Alderman Rainey made a decision without ever visiting the company. And so, there were all sorts of accusations made about the company, how it processes meats and the conditions of employment and yet nobody (on the Common Council) even bothered to even go visit the company.”
MMAC senior vice president Steve Baas took to Twitter to express his disappointment in the failed project.
“The MKE Common Council running Strauss Brands out of town is an undeniable black eye for Milwaukee,” Baas tweeted. “Sends a horrible message to any business looking to locate in the city in general and Century City in particular.”
OCTOBER 21, 2019
“It was our hope that Strauss Brands’ move to Milwaukee’s Century City neighborhood would have created jobs, provided an economic boost, and inspired other businesses to follow suit. We honor and respect the opinions of the community and don’t want to make our home in a place where our presence would not be seen as a benefit. We are no longer pursuing relocation to Century City,” Strauss President and CEO Randy Strauss said in a statement.
Ossie Kendrix, the president of Milwaukee’s African American Chamber of Commerce said “I’m disappointed. When I think about 125 city residents that find a way to travel to Franklin for work, every day, I can only imagine how much better life would be for them and more city residents that wouldn’t have to travel as far.”
STRAUSS BRANDS’ ENVIRONMENTAL RECORD
In November the Milwaukee Business Journal reported:
The company’s environmental record is nearly spotless.
The Milwaukee Business Journal checked with local, state and federal agencies that regulate air emissions and water quality and only one minor infraction registered in recent years for Strauss Brands’ plant in south suburban Franklin.
When asked about Strauss Brands’ environmental record in Franklin, (mayor) Olson said that in his years of involvement with Franklin economic development since 1990, he has not seen any problems.
“I’ve never heard of any ‘environmental’ issue with Strauss’s operations, which is why they’re a valued business here in the city,” Olson said.
Milwaukee Alderman Cavalier Johnson actually visited Strauss during the uproar, but only stood on the street outside the facility.The company was unaware of his visit.
He reportedly smelled no foul order, saw no rodents running around, and didn’t even see cattle brought into the plant, just trucks moving in and out.
WHAT ABOUT FRANKLIN?
Mayor Olson still wants to see Strauss Brands resume plans to expand in Franklin.
“I’m hopeful that the Strauss decision will be made in the near future,” Olson said in mid-November, and even met with Strauss officials after the city of Milwaukee efforts fell apart. He hasn’t commented on those talks and shouldn’t. These are complex discussions that should not be negotiated in all of places the press.
Franklin has had a longtime positive relationship with Strauss. But let’s be real. Strauss has demonstrated willingness to drop Franklin, and has said it hopes to reconcile with Century City after saying it no longer wants to go there.
Here’s what’s killing Franklin. Through no fault of its own, Franklin is NOT an Opportunity Zone. What’s an Opportunity Zone? Good question. That’s where President Trump comes in. Opportunity Zones were his idea.
Opportunity Zones are low income census tracts nominated by governors and certified by the U.S. Department of the Treasury into which investors can now put capital to work financing new projects and enterprises in exchange for certain federal capital gains tax advantages. The country now has over 8,700 Opportunity Zones in every state and territory.
Franklin has no Opportunity Zones. The city of Milwaukee did, and right where Strauss wanted to move in. While that didn’t work out another zone could.
What about Franklin? As 2019 comes to a close that’s an unanswered question.
THE TOP 10 FRANKLIN STORIES OF 2019
6) THE STRAUSS BRANDS SAGA
7) FORMER HIGH SCHOOL COACH CHARGED WITH SEXUAL ASSAULT
8) WE DON’T HAVE A CLUE, SO LET’S FUND ANOTHER STUDY
9) FRANKLIN’S NEW LOGO
10) THE CARMEX COMEBACK