The following article appeared in the Fourth Quarter 2004 edition of Research Park Forum, a publication of the Association of University Research Parks

Most research parks were conceived with the thought that "if we build it they will come." That was certainly the case at the Milwaukee County Research Park (MCRP) in Wauwatosa, Wisconsin. Fortunately, over the past ten years "they" have come. However, this just didn't happen by accident.

Guy Mascari, director of development for MCRP, knew that if a research park was properly positioned in the market, implemented a persistent and aggressive marketing plan, and understood the site selection process that prospective occupants go through, the Milwaukee area research park could do something that many thought was impossible.

The impossible became a reality this past September when ground was broken for one of the largest projects ever to occur in a research park in the United States.

The deal? A 506,000-square-foot multi-functional building that will house the global headquarters of GE Healthcare's Information Technologies, Information Management, and Ultrasound divisions. When the building is completed in 2005, over 2,000 employees are expected to fill positions in the complex that was hotly sought after by entities not only throughout southeastern Wisconsin, but throughout the country.

"It took a complex partnership between the Milwaukee County Research Park, a private real estate developer, the City of Wauwatosa, and Milwaukee County to be successful against very formidable competition," said Mascari. "This was a culmination of an effort to reposition the research park several years ago to capitalize on opportunities in the market."

While GE liked the cluster of technology-based companies already at the research park and the potential for interaction with academic institutions, in Mascari's mind, the deal ultimately came down to two key elements - economics and location.

"Working with a local corporate real estate consultant, GE Healthcare conducted a very thorough nationwide site search. We were competing with at least half a dozen sites locally and several in other states," he explained. "Putting all the pieces together, being patient and responsive during the two and a half year process, offering a very competitive deal, and having a vision of what a development of this size and caliber could bring to our research park were very important."

Mascari said that too often he has seen university research parks exhibit an unwillingness to acknowledge the often rough and tumble nature of the business they are engaged in. "It may be one thing to attract a company started by a faculty entrepreneur at a research university who may be looking for 1,000 square feet of lab space in a business incubator, but it's quite different to attract one of the leading technology-based businesses in the world that wishes to build a 500,000-square-foot facility for several major divisions," he added.

• a location accessible to major transportation arteries and a large workforce;
• competitive price, not only for the land, but also competitive construction and operating costs. These factors impact the lease rate of the facility in a build-to-suit leaseback transaction.
• method of acquisition - lease or purchase. Flexibility here is important oftentimes in financing a project.
  

"Real estate professionals are your friends," Mascari emphasized. This attitude was particularly important because GE was not going to own its new facility. That meant that a private real estate developer was needed to acquire the land, build the building, and lease it back to GE.

After offering research park land to any developer wishing to respond to GE's initial request for proposals, MCRP ultimately formed a loose partnership with one developer after GE had winnowed the list down to only a few that they were comfortable doing business with.
It turned out that one such developer, Irgens Development Partners, LLC, had already built five other buildings in the research park. This went a long way towards establishing mutual trust and respect.

The project price is close to $90 million and includes a $50 million construction loan from U.S. Bank. Irgens Development Partners also received a $10 million low-interest loan and a $15 million grant for a 1,200 car parking structure from the City of Wauwatosa where the project is located. The city used its tax incremental financing (TIF) capabilities to get the necessary funds. In a unique partnership, the city bought the research park site for $2.61 million and is leasing it to Irgens for 12 years. GE Healthcare has signed a 12 year lease, with the potential for extensions, for the building.

The GE Healthcare project is one of the largest new developments to be built in the Milwaukee area during the past 40 years. It was the home run that many Milwaukee County Research Park leaders had expected, or at least hoped for, from the beginning. Some research parks might not have such a large and complex endeavor in their plans because of the seemingly endless variety of obstacles and details. However, if they do and want to get into that kind of ball game, they need to learn the rules.

MILWAUKEE COUNTY RESEARCH PARK FACTS

• 175-acres
• 10 buildings; 1,290,000 square feet; 4,400 employees (after GE Healthcare)
• University Partners include - Marquette University, The Medical College of Wisconsin, Milwaukee School of Engineering and the University of Wisconsin-Milwaukee
• Adjacent to Medical College of Wisconsin and the Milwaukee Regional Medical Center
• 15 minutes to the airport, immediate access to Interstate 94
• Includes the Technology Innovation Center - a 137,000-sq. ft high technology business incubator that is home to over 40 businesses