Direct Supply to add 1,000 jobs
Company's expansion is major boost for city's northwest side
-Milwaukee Journal Sentinel
Tom Daykin
June 30, 2006
Direct Supply Inc. plans to add 1,000 to 1,500 new jobs over the next 10 years at its expanded corporate headquarters - an $85 million project from a technology-based company that will boost the lackluster business landscape on Milwaukee's northwest side.
Direct Supply, the country's largest supplier to the nursing home industry, will announce its expansion today at a news conference attended by Gov. Jim Doyle and Mayor Tom Barrett.
Direct Supply plans to expand its corporate campus, which now includes several buildings on N. Industrial Road, north of W. Mill Road and east of N. 76th St. The complex now houses 650 employees, with an average annual salary above $50,000.
Under the expansion plan, more than 500,000 square feet of new offices will be added for up to 1,500 new employees. Nine separate buildings on the company's campus will be linked by new multistory additions.
The expansion increases the capacity of the company to add up to 2,500 employees over 20 years, according to Direct Supply's plan.
Direct Supply is not as well-known as many Milwaukee businesses. But the company's focus on information technology, and the Internet, makes it a promising employer for a city seeking to replace manufacturing as its main source of jobs.
Direct Supply sells equipment and information systems to more than 21,000 nursing homes, assisted living centers and retirement centers. The company was founded in 1985 by Bob Hillis, its president and chief executive officer.
Direct Supply also operates the nation's largest e-commerce network of long-term care providers and suppliers, and is credited with creating the nation's first health care e-commerce network. Direct Supply hires a number of graduates from Marquette University, the University of Wisconsin System and Milwaukee School of Engineering - where Hillis is chairman of the Board of Regents.
Barrett is proposing that the city provide financing assistance for the expansion project, which seeks to create an improved, high-tech corporate campus. Under Barrett's proposal, Direct Supply would be allowed to recover $10 million to $15 million in property taxes generated by its expansion. The money would be recovered over 10 years.
Also, the city might relocate a Department of Public Works facility from N. Industrial Road to allow for further expansion by Direct Supply. The company and city would share the $9.4 million relocation costs.
Barrett and Doyle also will announce plans to provide up to $6 million in state enterprise development zone tax credits for the company.
Direct Supply "is a fast-growing, employee-owned company that believes in Milwaukee's appeal as a place to do business and attract talent," Barrett said in a statement.
Ald. Michael D'Amato said he expects the Common Council to approve the city financing plan.
"It's a great shot in the arm for the city," said D'Amato, chairman of the council's Zoning, Neighborhoods and Development Committee.
The expansion plans amount to a huge investment for the northwest side, said Robert Dufek, an industrial property broker with Inland Cos. He said the expansion could attract other companies to the northwest side that sell equipment or services to Direct Supply.
The expansion comes at a time when the northwest side is dealing with a long-term decline in its industrial and office leasing activity, Dufek said.
"There's so much space sitting empty on the northwest side, with no action," he said.
Vacancy rate rises
The area's lack of leasing activity helped boost Milwaukee County's industrial real estate vacancy rate to 7.4% at the end of 2005, according to Polacheck Co. That was the highest among six counties surveyed by Polacheck in southeastern Wisconsin, with the region's overall vacancy rate at 6.5%.
The northwest side has seen a decline in jobs and per-capita income from 1999 through 2004, according to a study released in May by the Center for Economic Development at the University of Wisconsin-Milwaukee.
However, there have been some new developments.
In 2004, a business improvement district was launched for the area bordered by N. 51st Blvd., N. 76th St., W. Silver Spring Drive and W. Good Hope Road. Commercial and industrial properties within the district pay a special assessment, with the funds used to pay for improvements in the area.
That district was spurred by the non-profit Havenwoods Economic Development Corp., which includes a Direct Supply executive on its board of directors.
In May, the city rezoned land north of W. Green Tree Road and west of N. 60th St. to accommodate a planned $28 million Job Corps vocational training center. That facility will house and train about 250 low-income young people, ages 16 to 24.
Parcel is bought, divided
Milwaukee's Redevelopment Authority approved the $1.6 million purchase of a 65-acre parcel that would include the facility. The city is selling the rezoned portion, covering 25 acres, to the U.S. Department of Labor for $1.15 million for the construction of the Job Corps center. Some of the remaining land will be developed for light industrial use.
In March, the city agreed to sell land north of W. Mill Road and west of N. 62nd St. to company uniform supplier Cintas Corp. The company plans to build an $8.5 million industrial laundry that will initially have 45 to 50 employees.
Also, two massive buildings at 6101-6161 N. 64th St., once used by now-defunct Outboard Marine Corp., are now largely filled with new businesses. Those include Capital Returns Inc., a fast-growing pharmaceutical shipper, and Athea Laboratories Inc., which makes pre-moistened hand wipes and other cleaning products. Both moved to the N. 64th St. buildings in 2005.
Finally, the Havenwoods area last year saw the development of a $9.5 million Home Depot store, at 7401 W. Good Hope Road, that replaced a former Kmart store.