Business Briefings - June

Here you will find the complete Business Report that appears in the May 2008 issue of In Business as well as many additional entries that did not appear in the magazine.

Exclusively online...

**Correction: CDA Awards: IB inadvertently listed the wrong project summary under the winning UW-Madison Mechanical Engine-ering Building project submitted by Miron Construction Co. Inc. We regret the error. Click here for the correct project summary.**

NATIONAL news

Nationally, the number of CEO's leaving their positions is up through April 2008. 483 top execs left their posts this year, compared to 470 last year. Most CEO's resigned, while 50 switched companies, compared with 33 last year. The data is based on a report from Challenger, Gray & Christmas, Inc.

The IRS announced a year-long campaign to educate new self-employed small business owners about federal tax responsibilities and about filing Schedule C. Sign up for a free subscription to E-News for Small Business at www.irs.gov/businesses/small/content/0,,id=154826,00.html. Type in your e-mail address and submit.

Kohls' Corporation will convert more than 50 stores in New Jersey, Connecticut and Maryland to solar power. It has already done so at more than 25 California stores, with 75 stores awaiting the conversion. In Wisconsin, Kohl's has three solar projects in the works.

Construction spending fell 1.1% in March, the fifth decline in six months.

State News

Milwaukee is bracing for an increase in violence as temperatures warm over the summer. Citing a nationwide increase in witness intimidation, the WI Department of Justice has secured a $50,000 grant to fund a Witness Protection Program in the state's largest city. Unfortunately, the dollars will only last until September. The program was suspended in 2003 due to rising costs and diminished state aid.

Wisconsin's Office of Energy Independence is offering grants of up to $5,000 to state gas stations to help with installation of equipment necessary to dispense E85 (85% ethanol/15% gas) fuel blends.

The United Steelworker's Union has reached a 4-year agreement with Domtar, operator of paper mills in Nekoosa, Port Edwards and Rothshild, WI. Domtar announced last year that it will be closing the Port Edwards plant in 2008, resulting in a loss of 500 jobs.

The cost of nursing home care in Wisconsin increased by 8% since 2004, according to an annual report filed by Genworth Financial of Virginia. That compares to an increase of 17% nationwide. Based on a survey of 10,000 facilities across the nation, the report lists the following average costs for Wisconsin nursing care: Assisted Living: private, one-bedroom, $38,043 per year (about $2000 more than the national average); Home care: hourly rate for non-Medicare certified, state licensed home health aide, $19.83 an hour, or $45,371/yr for 44 hours of care per week. Adult Day Health Care: $13,728 for 5 days a week ($1500 less than the national average).

Life Books lists the Wisconsin Dells in a new publication, "Dream Destinations: 100 of the World's Best Vacations."

Wisconsin's April unemployment number fell to 4.4% from March's 5.2% thanks mostly to an increase in construction and manufacturing jobs.

The Walt Disney Co. took ownership of 220 Disney retail outlets in North America after The Children's Place Retail Stores Inc., which ran the chain, filed for Chapter 11 bankruptcy protection. Disney subsequently announced the closings of 98 stores in the U.S. including the store at Milwaukee's Mayfair Mall. No word yet on the fate of the Southridge Mall store in Greendale.

Wisconsin ranks 21st in the nation for the number of individuals employed in the high-tech industry (81,444). The state ranks 34th for average high-tech wages, according to the American Electronics Association.

Area News

The Union House Tavern, a civil war era Madison tavern on East Washington Avenue, was recently purchased by a local entrepreneur who plans to open it in June as The Malt House.

UW-Madison will allocate 65 rooms in the Sellery Hall dorm for students interested in entrepreneurial coursework. The project, called the Entrepreneurial Residential Learning Community, is being funded in part by the Kauffman Foundation with hopes of spreading entrepreneurship beyond the business school.

Buffalo Wild Wings will open a 7,000 sq. ft. restaurant in August at East Towne Mall, and the restaurant's fourth location in the city is planned near the Super Target on Hwy PD in Fitchburg.

The U.S. Department of Housing and Urban Development will funnel $1.7 million to the area to assist with home building and improvement, and community upgrades. The funds will be distributed through the Community Development Block Grant, the American Dream Down Payment Initiative, and the Home Investment Partnerships.

Friends of Waunakee's Schumacher Farm announced a $1 million capital campaign to complete the interior of the park's new headquarters and visitor center. The 120-acre park on Hwy 19 is a living history museum and nature conservancy that includes a early 1900Õs farmstead, prairie restoration and gardens.

The Goodman Atwood Community Center is slated to open doors to its new location in September in the old Kupfer Iron Works building at 149 Waubesa Street in Madison. Local philanthropists, Irwin and Robert Goodman donated $2 million toward the new center, which is nearing its $12.4 million goal.

Looks like the plan for the new Central Park in downtown Madison will have to include the existing railroad tracks. Officials say the idea of moving the tracks for the urban 18-acre urban park is cost prohibitive. A task force is now considering smaller, alternative designs.

Company News

American Family Insurance ranked number 352 on the 2008 Fortune 500 list, down from 338 last year. Rankings are based on revenue.

Middleton's T. Wall Properties will build an eight to ten-story office building in downtown Green Bay.

INTRODUCING

Speedpro Imaging, producing large-format images, 204 Moravian Valley Rd., Waunakee.

Green Light

Construction has begun on Oregon's new Community Sports Arena. The 42,000 sq. ft. facility will include an NHL-sized indoor hockey rink, concessions, and a community room. The project is expected to cost $2.5 million.

Yellow light

The State of Black Madison Coalition released a report saying blacks in Madison have a tough climb ahead of them. According to the report, fewer than 60% of black eighth graders in the Madison Metropolitan School District are proficient at reading; 40% of black students drop out before graduating from high school, and only 2 in 10 black families own homes (compared to 6 in 10 of the general population). What's worse, the report claims that it will take 265 years for the income disparity between blacks and the rest of Dane County to disappear, if current trends continue.

Movers and Shakers

Truphosa "Tru" Mwololo, consultant-economic development, WI Bureau of Minority Business Development.

Rochelle Klaskin, managing partner, Godfrey & Kahn, Madison.

Joe Truehart, project manager, Krause-Anderson, Madison.

Lynn Bodi, elected VP, American Academy of Adoption Attorneys

Zach Penshorn, Human Resource Manager, Mortenson, Matzelle & Meldrum (M3).

Michael P. Murphy, Whyte Hirschboeck Dudek, will head up the firm's Federal Indian Law Practice.

Found Money

Commonwealth Development Corporation will receive $7,000 from the DOC's Community-Based Economic Development Program to build a small technology room at one of its business incubators on MadisonÕs east side. Upgrades will include T-1 service and better security and equipment.

Congrats!

Madison's Industry Connection Inc. was named one of the "Most Dependable" Web Designers in the Central U.S. by Goldline Research on a list published in the May issue of Entrepreneur Magazine.

Drake & Company was a grand award winner at the 2008 Family Business of the Year award banquet in April. The employment firm has 14 employees and has two offices in Madison.

Veridian Homes of Madison has won a 2008 Gold and Silver EnergyValue Housing Award (EVHA) from the NAHB Research Center, for being a leader in energy-efficient construction.

The Boldt Company won top honors among Wisconsin construction companies for maintaining a safe work environment, the sixth time the company has won the award.

George Gialamas, owner and CEO of Madison's Gialamas Company, was honored with the Distinguished Alumnus Award from the Marquette University Helen Way Klingler College of Arts and Sciences.

The American Subcontractors Association of Wisconsin announced its annual awards: C.G. Schmidt, Inc. was named General Contractor of the Year, and Eppstein Uhen Architects was presented with Architect of the Year, for the ninth time.

Fort Atkinson's Retail Marketing Services, a division of manufacturer VyMaC Corporation, won the 2008 American In-house Design Award for it's marketing of the Everloft¨ air beds.

In the magazine...

NATIONAL news

Swiss banking giant UBS AG announced it may slash 5,500 jobs in the next few months due to huge losses caused by the U.S. subprime crisis.

Toyota warned of its first profit loss in seven years based on first quarter sales.

On the heels of record profits for oil companies and record gas prices for consumers, the Federal Trade Commission announced plans to better police the oil industry, with a promise to fine companies $1 million a year if improprieties are found.

Exxon reported a $10.9 billion profit first quarter, topped only by its $11.7 billion profit in fourth quarter 2007.

Around the State

Affiliated Foods Midwest Cooperation Inc. announced plans to construct a $99 million, 731,000 sq. ft. distribution facility in Kenosha, expected to create 450 jobs. The company distributes food products and merchandise to grocery stores throughout the Midwest.

Home Depot will close three Wisconsin stores, one each in Milwaukee, Beaver Dam and Fond du Lac, due to poor performance. The three are among 15 being closed nationwide. The company's profit nosedived 66% in first quarter, and sales dropped 3.4%.

Capital Midwest Advisors, a Wauwatosa investment fund, has been created to support early-stage life sciences and alternative energy companies in Wisconsin, Illinois and Minnesota. Thus far, $5 million has been raised.

The Kalahari Resort in the Wisconsin Dells is adding a 110,000 sq. ft. family entertainment center that will offer a six-story ferris wheel, an indoor mini-golf course, 24-lane bowling alley, laser tag, ropes course, go carts, a sports bar and more. Indoor walkways will connect the center to the resort, Damon's Grill and the Desert Cinema. The $15 million complex is expected to open in December.

The Wisconsin Realtors Association reported that the median price of a home fell just 3.8% to $154,000. Meanwhile, the state's home sales dropped 24.9% in first quarter (9,044) compared to the same period in 2007 (12,049). Weather in January and February was cited as a significant factor in the results.

One of the largest trucking firms in the nation, Green Bay-based Schneider National Inc., voluntarily instituted a 60-mph speed limit on its 10,600 rigs to battle high fuel costs and save emissions. Company officials claim the move will be the equivalent of taking 7,200 cars off the roads and save 3.75 million gallons of fuel a year.

Eau Claire-based Menards Inc. is getting into the subdivision business — again, developing three separate communities in Indiana and Illinois. The home improvement company did the same in Franklin and Eau Claire several years ago.

The Wisconsin Vehicle Inspection Program is shutting down because the state contract is expiring. The Dept. of Workforce Development announced that Envirotest Wisconsin will close in July, leaving 105 Waukesha employees with a two-week severance package.

The Badger State Summer Games will be moving to the Fox Cities in 2009 for a 3-year run. The games had been held in Madison for the past 23 years, attracting about 10,000 citizen-athletes. The event's organizer, Madison-based Wisconsin Sports Development Corp., said it wanted to expose the event to other areas of the state. The Community Foundation for the Fox Valley Region offered a $180,000 grant to support the games and facilitate the move.

Wisconsin's 2007 specialty cheese production grew 3% from the year prior. Setting a new record, 399 million pounds of specialty cheese was produced, representing 16% of the state's total cheese production. Eighty-three of the state's 124 cheese plants now produce specialty cheese, with Feta being the most popular.

Beloit-based Regal Beloit Corp. acquired the Hwada motor group from China for $8.5 million, a manufacturer of motors used in paper mills and power plants. The purchase is expected to increase the Beloit company's revenue by up to $80 million.

Three developers are talking to state officials about the idea of building wind turbines in Lake Michigan, just east of Kewaunee, Sheboygan, Milwaukee and Kenosha. No water-seated wind farms currently exist in the U.S., although there are a couple in Europe, and two have been proposed off Cape Cod.

Developers are considering off-shore sites because of growing opposition to land-based wind farms. It will take years to complete feasibility and environmental studies and gain approvals before any concrete is laid.

Jefferson's Nestle Purina PetCare Co. is expanding its operation with a $20 million to $40 million project that will add 20 new jobs. The cat food company received $100,000 in state tax credits and an additional $30,000 Community Development Block Grant to help finance the expansion.

The Gannett Company, which publishes the Green Bay Press Gazette, Journal Communications, owner of the Milwaukee Journal-Sentinel, and Lee Enterprises, publisher of the Wisconsin State Journal and Capital Times, all saw revenue losses last quarter, compared to the previous year. MadisonÕs afternoon paper, the Capital Times switched to an online-only format in April.

Around the Area

Ninety housing permits (residential, duplexes) were issued in Dane County in April, down 23% from the 117 issued a year ago. That is the lowest number of housing starts recorded since 1999.

Dane County bankruptcies increased 21% in the first quarter 2008 with a total of 270 cases filed, up 47 cases from the same period last year. First quarter bankruptcies were up 29.5% state wide, and 27% nationwide.

The average value of a home in Madison was $248,000 in 2007, an increase of only .08% compared to a 2.8% increase the previous year. The highest average assessed value increase (5.11%) was in the Spring Harbor neighborhood, at $931,000. The lowest was in the Hammersley Road-West Beltline neighborhood, which dropped 4% to $205,100. The value of commercial property increased six percent.

Plans for a new Central Park in downtown Madison will have to include the existing railroad tracks afterall. Officials say the idea of relocating the tracks for the urban 18-acre urban park is cost prohibitive. A task force is now considering smaller, alternative designs.

Forbes.com ranked Madison the 10th worst city for homeowner debt, based on the number of home equity loans, second mortgages and housing prices. The findings are being disputed by area home experts. Of the city's mortgage holders, 27% have a second mortgage. Meanwhile, first quarter foreclosures in Dane County reached 328, up from 144 in 2007.

Microsoft announced plans to open an advanced development lab in Madison through a partnership with the UW Computer Science Department. The Jim Gray Systems Lab will employ six under the direction of UWÕs David DeWitt, a world leader in database research, to assist Microsoft with technical issues and snafus. Grad students can apply to take part in the project, which is expected to be fully staffed by September 1. Shortly after Microsoft's announcement, news emerged that web-search giant Google has been operating a 5,000 sq. ft., 10-person office in downtown Madison for the past several months. UW officials believe the addition of both Microsoft and Google could heighten the UW's status in electrical and computer engineering and in computer science, and help retain graduates, attract companies and bring more funding sources to the area.

Company News

Madison's Strand Associates, Inc. will expand its Wingra Dr. office space from 53,700 sq. ft. to 80,000 sq. ft., creating space for approximately 100 more employees.

Madison-based Venture Investors has been instrumental in the funding of Tissue Regeneration Systems, a Madison start-up company developing bioactive spinal implants that grow strong bone tissue that eventually replaces the implants with the new tissue. The hope is that this new technology will shorten the recuperation time for some spinal patients.

Madison's Electronic Data Systems Corp. (EDS) is being purchased by Hewlett-Packard Co. for $13 billion. The acquisition will make HP the second largest technology services provider behind IBM. Closing is scheduled for later this year.

John Emery, CEO of Great Wolf Resorts, Inc. resigned and will depart with an $825,000 severance package. Director Randy Churchey will serve as interim CEO. Meanwhile, after resolving a proxy battle, the company also announced that Eric Hovde of Hovde Capital Advisors, and Richard T. Murray III will be added to Great Wolf's board of directors and to the slate of candidates for the Director position at the May shareholder's meeting.

Riding the success of it retail stores in Dallas and Atlanta, Middleton's American Girl announced it will locate a third store in the Boston area. The three join larger American Girl Place stores located in New York, Chicago and Los Angeles.

CUNA Mutual Group and the Professional Employees Union Local 39 agreed to a four-year contract that will include a 2% increase in 2008 and 3% increase each of the next 3 years. The deal also includes a one-year moratorium on layoffs, and offers a voluntary buyout plan for union members with 10 or more years of service.

Tomotherapy announced the start-up of a new company, Compact Particle Acceleration Corp. which is working with the Lawrence Livermore National Laboratory in California to develop a more powerful proton therapy system to treat cancer. The new project is expected to generate $45 million in funding.

Alliant Energy's subsidiary, Wisconsin Power & Light, announced plans to purchase a wind farm in southern Minnesota that could produce enough electricity to power 100,000 homes. Operations should ramp up in 2010.

Badger Contractors Rental & Supply recently opened a Janesville branch at 4033 Hwy 51 North. The company sells, rents & services light construction equipment and supplies.

FluGen, a local company that develops flu vaccines, has signed a license agreement with WARF for a new technology that could reduce the amount of time and money needed to manufacture the vaccines.

Johanson Transportation Services (JTS) has added a corporate sales and marketing division to its Madison-based regional office.

Proposed

Two three-story office buildings have been proposed at the corner of Lorillard Court and Proudfit Street in the Bassett Street neighborhood on mostly-vacant property currently zoned for residential use. The buildings, which appear to have neighborhood buy-in, would encompass over 90,000 sq. ft. combined and have underground and surface lot parking.

The East Side Club (formerly the East Side Business Men's Association) is considering a five-story redevelopment at its
current location on Monona Drive. The project would include a full-service restaurant, office space, a reception hall and
possibly an extended-stay hotel. Members have voted to proceed, and an RFP process is underway.

Pending city approvals, Marcus Theatres announced plans to construct a new 16-theater complex at U.S. 151 and Nelson Road in East Madison. The 26-acre development may also include in-theater dining, a family entertainment center, a movie-themed sports restaurant and bar and outdoor patio. If all goes as planned, Marcus hopes to open the site by early 2009. The existing Eastgate theater on High Crossing Blvd. will be razed for future development. Marcus is also considering plans for another theater complex near Hwy 151 and Stoughton Road.

Found Money

The Wisconsin Council of the Blind and Visually Impaired received a $12,000 grant from the Public Service Commission for a six-hour workshop to train businesses how to make websites more accessible to the blind and visually impaired.

Silatronix, a Madison start-up company, has raised $500,000 from Venture Investors to fund the development of an electrolyte that scientists believe will lead to safer, more efficient batteries.

Madison-based DNAStar Inc. will receive $231,500 from the State in Technology Zone tax credits toward a $2.5 million expansion of its facility. The expansion could add another 20 jobs.

green light

A four-story, 48-unit hotel may soon grace the corner of Regent and Monroe Streets, across from Camp Randall Stadium. The Madison Plan Commission approved the demolition of an existing office building owned by architect Robert Sieger to make way for the project. It was Sieger's fifth try at seeking the council's approval.

EPIC Systems in Verona has broken ground on Campus 2, consisting of four office buildings housing 1,700 offices and underground parking space for 2,000 cars.

T. Wall Properties' proposal for a $45 million, nine-story building to house a new downtown library as well as retail and office space was approved by the Madison Library Board in April.

yellow light

After five years of local planning, a 155,000 sq. ft. Wal Mart Supercenter in Stoughton has been put on hold for several years by the Arkansas-based retailer. As a result, the Stoughton Road store will undergo major renovations this summer.

Union Corners, a $100 million east side development proposed by McGrath & Associates in 2006, is on hold and will be scaled back. The 15-acre site was to include 450 housing units, commercial space, parking, a grocery, pharmacy, hardware store and restaurant in the Winnebago-East Washington Ave. area.

red light

Madison Cosmetology College shut its doors suddenly and permanently, leaving almost 30 students in the lerch.

The owner of Sun Prairie's Hanley Company is retiring, and will close the 80-year old family business. Thirty employees will be affected.

Sitel Corp. announced the elimination of 105 call center jobs at its Deming Way location effective June 1.

General Motors (GM) announced it will cut 750 jobs in July. The move is in response to skyrocketing gas prices and sluggish SUV sales, according to the company. The Janesville plant has been operating at about 50% of its normal production capacity since March due to ongoing labor issues between American Axle and the UAW. A tentative agreement in that 12-week strike was just announced. The ripple effect of GM's slowdowns affected GM parts supplier Logistic Services Inc. which said 132 people would be laid off in July. And Lear Corp. in Janesville, announced 336 jobs would be cut representing over a third of the company's hourly workforce. Lear supplies interiors and seating systems to GM, and with these layoffs, will have cut hourly staff by 60% over the past 18 months.

After 54 years, Hans Sewing & Vacuum on Williamson Street will close on June 28. The store, notorious for sales and service of elite sewing machines, has fallen victim to a higher demand in lower-priced equipment.

Linens & Things filed for bankruptcy reorganization and will close 120 of its stores, including Middleton's Greenway Station and stores in Racine and at Grand Avenue Mall in Milwaukee.

Financial

Sonic Foundry announced a second fiscal quarter loss of $2.3 million compared to a $1.9 million loss last year. Net sales increased three percent to $3.9 million.

Third Wave Technologies Inc. posted a $7.61 million loss for first quarter due to increased expenses for clinical trials of its test for human papillomavirus. Revenue, however, rose 25% to $8.40 million.

MGE Energy reported earnings for the first quarter 2008 of $13.8 million compared to $12.3 million last year.

Spectrum Brands Inc. reduced its losses by more than 50% compared to a year ago. The company reported a fiscal second quarter net loss of $111.7 million, down from $237.5 million in 2007. Good foreign exchange rates and strong sales in the company's pet care and personal care lines were credited.

Great Wolf Resorts Inc. announced its 2008 first quarter net loss increased to $2.3 million, up from $2 million last year. However, the waterpark company's revenue increased 32% to $64.2 million.

First Business Financial Services Inc. (parent of First Business Bank) reported a net income of $770,000 for first quarter, 2008, an increase of 28.5% from the previous year.

Alliant Energy Corp. announced a 7% increase in net income for first quarter, or $68.1 million, up from $63.9 million last year, thanks to the cold winter.

Kraft Foods announced a 7.5% first quarter increase in revenue from its convenient meals division, based on strong sales of its Oscar Mayer Deli Creations sandwiches and Oscar Mayer Deli Fresh meats. Neither product is made here.

Large Properties

Alexander Mansion Hill Inn LLC sold to Trek Hospitality LLC, 424 N. Pinckney St., $1.05 million.

Eau Claire Mattress Manufacturing Corp. sold to SDFA Investments LLC, 4630 E. Washington Ave., $2.39 million.

Walton-Commons LLC sold to Home Health United, 2802 Walton Commons West, $3.25 million.

Madison Investments LLC sold to Livesey East LLC, 4271 Lien Road. $6.7 million.

correction

CDA Awards: IB inadvertently listed the wrong project summary under the winning UW-Madison Mechanical Engine-ering Building project submitted by Miron Construction Co. Inc. We regret the error. The correct project summary can be found online in IB's expanded Business Report or directly at inbusinessmagazine.com/A041.

Top 200 List (176): Corey Chambas is the President/CEO of First Business Financial Services, Inc. The QTI Group was left off the Top 200 list due to a clerical error: With a 2007 revenue of $140 million, they should have been number 55.

FortÉ

Forté Madison, a weekly online e-zine and interactive website for the area's young professionals, will launch in June. To subscribe go to ForteMadison.com.