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Falls plans future of Woodland Prime after Kohl's backs out of development

Village officials put positive spin on decision

Nov. 26, 2013

Menomonee Falls — Kohl's Corp. has dropped plans to build new headquarters in the Menomonee Falls Woodland Prime office park leaving village officials with a large piece of prime real estate they plan to develop going forward.

Kohl's announced on Nov. 21 that is has completed plans to buy the former Innoware building, a 300,000-square-foot facility on Ridgewood Drive in the Silver Spring Corporate Park where the company's current headquarters are located. The building is across the street from the main Kohl's building and next to the company's 24,000-square-foot wellness center. Kohl's also has agreed to buy the 28,000-square-foot former ProHealth medical building at W165 N5595 Creekwood Crossing, across from the Silver Spring Corporate Park. The company is opting to purchase these two buildings to accommodate its growth, instead of constructing of a $250 million corporate campus that was planned at Woodland Prime.

Best of both worlds

Though plans fell through at the village's office park, officials are looking at it as an opportunity to bring further development to Menomonee Falls, in addition to keeping Kohl's in the village.

"(Kohl's is) planting their flag squarely in Menomonee Falls," Village Manager Mark Fitzgerald said. "They still will be able to grow and expand and that's what our original goal was. That's going to happen."

The village and Kohl's in 2012 reached an agreement that put the village in ownership of 108 acres at Woodland Prime, plus a building located at W127 N7564 Flint Drive. Under the agreement, the land and building in the village's tax incremental finance district No. 10 were going to be transferred to Kohl's in exchange for the company's distribution center located on Woodale Drive. The village now owns the building at Woodale and is leasing it to Kohl's. The village will eventually turn the building into a public works facility, which was the initial intent when it was first acquired, Fitzgerald said.

There was an unwinding provision in the agreement, and the vacant land in the office park will be deeded back to the village.

"We have valuable class A office land for additional development that can be a strong asset to the village," Fitzgerald said. "We view this favorably. We are not disappointed or negative about this at all. We just have to re-strategize now and move forward."

This won't be the first time the village has marketed land in Woodland Prime. They successfully attracted Eaton Corp. to the site in 2012, around the same time the agreement was reached with Kohl's.

"I see that scenario playing out now throughout the TID 10 development," Fitzgerald said.

Work may not be needed

Woodland Prime is fully serviced by roads and utilities, but because of the size of the approved Kohl's corporate campus, the village had planned to spend up to $23 million on new roads, water mains, a bridge for the extended Flint Drive and other public improvements using tax incremental financing. This work may no longer be necessary.

"The issue was Kohl's was going to be so large that there were capacity issues that needed to change, primarily for traffic so they may not be necessary now," Fitzgerald said. "It may be very much that this TIF district doesn't require the significant plan expenditure that it did for Kohl's because we may attract a more normal size facility."

The ProHealth building will house an expanded associate wellness center and an associate fitness facility, according to the statement from Kohl's Corp. With the relocation of the wellness center, the current wellness site will serve as a childcare center, in addition to the site in the main building. The two new buildings combined will add 360,000 square feet of space to the corporate operations, which is an increase of more than 40 percent from the current capacity.

The space in the current headquarters building that is currently occupied by IT associates will be used to support the ongoing growth of the company, the statement says, and it will allow Kohl's to consider other building upgrades, such as additional meeting rooms and an expanded cafeteria.

"As we shared in 2012, our goal has been to find the location that best positions us to remain an employer of choice, retain and attract the best talent and to satisfy our responsibilities to our shareholders and associates. We knew the planning process would require ongoing consideration and flexibility and that some of the tentative plans we laid out in 2012 may change," Kristen Cunningham, Public Relations Manager at Kohl's Department Stores, said in an email. "Acquisition of these facilities allows us to meet our goals. We are enthusiastic about these plans and what it means for our growth and our associates."

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