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Helgesen will subdivide south side building

Photo

Photo by Dan Lassiter

The vacant building on Venture Drive that once housed LSI is being subdivided.

JANESVILLE — Jeff Helgesen has a solid track record of building and renting large commercial and industrial buildings.

But Helgesen’s highly skeptical he’ll be able to lease his 700,000-square-foot building on Janesville’s south side to a single tenant.

That’s why he plans to spend $1.5 million to subdivide and renovate the cavernous building at 2929 Venture Drive, the former home of Logistics Insight Corp.

LSI, as it is known, leased the property while it sequenced and supplied parts to the General Motors plant in Janesville. When GM ended production in December, so did LSI, a just-in-time supplier that at one point employed 400 people.

With ongoing utility and other costs, plus annual property taxes of more than $400,000, Helgesen considered selling the building or scrapping it for salvage.

Instead, he settled on the plan to redesign the 1,400-by-500-foot building to incubate several manufacturing and warehousing projects.

“The recession diminishes the prospect of viable buyers, and scrapping the building saves paying taxes and utilities, but does little for goodwill,” Helgesen said. “Rehabilitation, although a risk, would bring jobs, taxes and value to the Janesville and Beloit metro area.”

Helgesen constructed the building in 1999 for CTI, which was also a GM supplier. Over the years, the alphabet soup of occupants continued with TNT and then LSI.

Helgesen Development Corp. soon will repaint the interior and install energy-efficient lighting.

Over the course of five months, Helgesen will subdivide the building into three major cells, each with their own power and control areas.

Helgesen said he’s talked with several third-party logistics companies about size requirements and will rehab the building to meet the needs of the market.

The eastern 200,000-square-foot rail area will be 400 feet long by 500 feet wide. The remaining 500,000 square feet will be divided in half to dimensions 1,000 feet long by 250 feet wide.

Further subdivision is possible, and tenants will have an opportunity to grow their space. The property is desirable, he said, because of its proximity to highway, rail and air corridors.

“We could have anywhere between one and 10 tenants,” Helgesen said, adding that he hopes to have his first tenant by July.

Briggs & Stratton is looking for 400,000 square feet in the Jefferson area, he said.

“They haven’t made up their mind yet, but then a lot of people aren’t making up their minds these days,” he said.

“We’ve got some leads, and we’re working it pretty hard. We haven’t quit at all.”

Renovating the building for several tenants will help the local economy diversify.

“Given current economic conditions, the number of single tenants seeking space in the range of 700,000 to 1 million square feet is limited,” said James Otterstein, Rock County’s economic development manager. “The type of divisions proposed for the facility will position the building to a much larger end-user audience.

“This flexibility, coupled with the facility’s overall functionality and Helgesen’s proven track record, certainly creates a solid real estate offering.”

Subdividing the building also will help Helgesen, who until LSI left had all his Janesville buildings occupied.

“It hurts when it’s all tied up with one tenant who then decides to leave,” he said.