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Trainmaker considering Janesville buildings

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JAMES P. LEUTE
February 18, 2010
— A Spanish trainmaker is considering two empty Janesville buildings for its Wisconsin manufacturing operation.

In addition to the former LSI and Gilman properties in Janesville, Talgo Inc. is looking at properties in Milwaukee, Racine and Appleton, according to a report by BizTimes Milwaukee.


Gov. Jim Doyle and Talgo announced an agreement in July to put two Talgo train sets into service in Wisconsin and to establish new assembly and maintenance facilities in the state.


The rail car assembly plant will support the delivery of Talgo trains throughout the country.


The state plans to buy two, 14-car train sets for $47 million from the company. They will go into service on the Amtrak Hiawatha Service between Milwaukee and Chicago. Each train set seats 420. Existing locomotives will pull the cars.


In addition, the state will buy two more train sets as part of the $810 million in federal stimulus money allocated to high-speed rail projects. Talgo is expected to build those sets.


In Janesville, Talgo is looking at the 700,000-square-foot Helgesen Industrial Center—the former LSI facility—at 2929 Venture Dr.


It also is considering the 214,000-square-foot building that housed Gilman Engineering and ThyssenKrupp at 305 W. Delavan Dr.


According to Talgo’s request for proposal, the company will build the sets over about two years. It’s possible, the company said, that additional manufacturing and assembly would require an extension of the lease.


In its request for proposals, the company said it anticipates a workforce of 50 to 60 and needs a minimum of 80,000 square feet. Main line rail access is necessary, as is track area within the property.


Coldwell Banker Commercial McGuire Mears & Associates is representing ThyssenKrupp in the sale of its Janesville property.


Bill Mears of McGuire Mears said the former Gilman building is next to a main rail line and has a north-south spur along its side. It’s got high ceilings and 35 cranes that could be advantageous to Talgo, he said. Former Gilman employees who now work for R&M Manufacturing in Milton have helped market the property, he said.


ThyssenKrupp wants to sell the building, while Talgo is looking for a lease with an option to purchase. Mears said that if ThyssenKrupp can land a tenant, the focus would shift to finding a buyer for the building.


“Talgo has been on our radar for some time,” Mears said. “We’ve answered their RFP and they’ve toured the property. Now, we’re just waiting for a decision.”


Also awaiting a decision—which could come this week—is Jeff Helgesen. He’s been courting Talgo for the last year, and company representatives toured his facility a few weeks ago.


Helgesen said Talgo wants an 18-month lease for about 80,000 square feet. The company also has asked for an escape clause after 14 months.


Helgesen completely remodeled the former LSI building. He said improvements necessary for Talgo to lease 100,000 square feet of the space would require $375,000.


“That’s not an amount I can cover on a 14-month lease,” he said, noting that Talgo would occupy just 15 percent of his building and use all of its rail service. “If they would go for longer, I could absorb it.”


Helgesen said Talgo originally narrowed its list to three sites: two in Milwaukee and his in Janesville. But as the project dragged on, Talgo’s list of potential sites grew.


“Both the Gilman building and Jeff’s building are great facilities,” Mears said. “I just hope Janesville wins.”


The other sites, according to BizTimes Milwaukee are:


-- The Tower Automotive site, 2900 W. Townsend St., Milwaukee.


-- Super Steel, 7100 W. Calumet Road, Milwaukee.


-- 3441 S. Memorial Dr., Racine.


-- A 246,700-square-foot facility at 1840 W. Spencer St., Appleton.


BizTimes Milwaukee reported that the city of Milwaukee bought 84 acres of the former Tower Automotive site last year for $4.5 million. The city plans to spend about $30 million to redevelop the property.



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