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Falls Village Board approves Kohl's corporate campus

Land swap, road extension part of deal to keep retailer in town

July 23, 2012

Menomonee Falls - The Menomonee Falls Village Board didn't waste any time in approving agreements that would allow Kohl's Department Stores to move forward with a multimillion dollar development at the Woodland Prime Office Park.

Just one day after Kohl's announced its plans to expand the company's headquarters to the office park located north of Good Hope Road, between Highway 45 and Appleton Avenue, the Village Board approved purchase and the Kohl's Corporate Campus Development agreements at a special meeting Friday morning. These agreements allow the 900,000-square-foot development to move forward.

The village unanimously approved designating four parcels of land at Woodland Prime on Flint Drive as a corporate campus. A corporate campus designation means the entire development cannot be less than 40 acres and the campus has to have a minimum of 1,000 full-time employees, which Kohl's meets. The four parcels total 89.2 acres in the northern part of Woodland Prime, said Director of Community Development for the village Matt Carran during a presentation to the Planning Commission before the Village Board met Friday.

Exchange kick starts project

The board's approval Friday of the Kohl's Corporate Campus Development Agreement has been more than two years in the making.

"We couldn't be more delighted with where we are at today. I think this is a major circumstance for the village," Village Manager Mark Fitzgerald said. "We believe Kohl's is delighted, we're pleased with the aggressive nature of this state and the Wisconsin Economic Development Corporation and, frankly, it's just a darn good thing to finally have this wrapped up."

The first phase of the development agreement includes a land exchange between Kohl's and the village. The village will take over the Kohl's distribution center on W13901 Woodale Drive. Kohl's will continue to occupy the building until the new campus is complete. The distribution facility is approximately 30,000-square-feet on a 26.65-acre site and is valued at about $9 million. In exchange, Kohl's will receive 108 acres in Woodland Prime and a 53,000-square-foot office building valued at $8.95 million.

Real estate transactions will occur by mid-to-late September, Fitzgerald said.

As part of the agreement, Kohl's has committed to building a 900,000-square-foot campus, valued by the village to be $90 million. Fitzgerald said the village will supply cash payments over a multiyear period. Once the real estate exchange closes in September, the village will provide $2 million in development support and $2 million per year for five years after the development is substantially completed.

"It is a prolonged period of payments only after the building is substantially complete and tax increment is being paid on an annual basis," Fitzgerald said.

Construction critical for traffic

Kohl's has three years to provide a commencement notice to the village that states when construction will begin. Once that notice is received, the village has to begin $13 million of road construction projects within 30 days as a result of the office park growth. The construction, Fitzgerald said, will ultimately be paid for by taxes coming in as part of Tax Incremental District No. 10, where the corporate campus for Kohl's will be located.

"The really heavy lifting hasn't even begun yet and as Mark (Fitzgerald) has indicated when these triggers start happening there will be a lot of stress on staff to get a lot of things done in a relatively short period of time based upon the way construction works," said Village Trustee Michael McDonald. "As excited as we all are, we need folks to be understanding and patient that this doesn't happen overnight and it will take some time."

Flint Drive will be extended to Fond du Lac Avenue allowing for a north exit out of Woodland Prime. Flint Drive will be extended north with a bridge over the Menomonee River and end at Fond du Lac Avenue.

"This was critical," Fitzgerald said. "Currently, Woodland Prime only has one release at Good Hope. With this much new growth and traffic generators, a north release was necessary and we have worked very hard with Kohl's and state agencies to be able to guarantee that we can build this road and make this connection happen."

The Village Board approved the purchase of 1.9 acres of roadway for $25,000 that was owned by Donald Arenson to allow for the road extension.

The extension is a public road and will accommodate all businesses and employees in the Woodland Prime area.

Keeping a corporate citizen

Since the first store opened in Menomonee Falls in 1963, Kohl's has paid more than $20 million in local property taxes. The company is the largest employer in the village, with about 3,000 employees in Menomonee Falls, and the largest tax payer, Fitzgerald said.

The current headquarters has been expanded twice since it was built in 1996.

"It's an 800,000-square-foot corporate facility that they have badly outgrown and have indicated to us that expansion is critical," Fitzgerald said. "This is significant and it's very significant that we could keep them in the village."

Village Board President Randy Newman commended Fitzgerald and village staff for their years of work and for keeping the agreement private, until the details were ready to be brought forward.

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