Talgo says no to Janesville

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Tuesday, March 2, 2010
— Despite what could be unprecedented incentives from the city of Janesville, a Spanish train maker has ruled out the city for its Wisconsin manufacturing operation and 50 to 60 jobs.

Talgo, Inc. recently narrowed its list of Wisconsin sites to six, including two in Janesville, two in Milwaukee and one each in Racine and Appleton.

BizTimes Milwaukee reported Monday that Talgo has selected the former Tower Automotive facility in Milwaukee.

In Janesville, Talgo’s finalists were the former LSI building at 2929 Venture Drive and the former Gilman/ThyssenKrupp factory at 305 W. Delavan Drive.

“With so many of our friends and neighbors still unemployed and struggling, the announcement … came as a disappointment,” said Assembly Speaker Mike Sheridan of Janesville.

Last summer, Gov. Jim Doyle and Talgo announced an agreement to put two Talgo train sets into service in Wisconsin and to establish a new assembly and maintenance facility in the state. The rail car assembly plant will support the delivery of Talgo trains throughout the country.

The state plans to buy two train sets from the company for the Amtrak Hiawatha Service between Milwaukee and Chicago. In addition, the state will buy two more train sets as part of federal stimulus money allocated to high-speed rail projects. Talgo is expected to build those sets.

On Friday, the state of Oregon said it would buy two Talgo train sets built in Wisconsin.

Jeff Helgesen owns the former LSI building that he remodeled and renamed the Helgesen Industrial Center.

He said Talgo wanted an 18-month lease for about 100,000 square feet of the 700,000-square-foot building. The company also sought an escape clause after 14 months.

Helgesen said Talgo needed $375,000 worth of improvements in the building. That was not an investment he was willing to make for such a short lease.

The city of Janesville, however, was prepared to guarantee lease payments if Talgo picked either of the Janesville sites, City Manager Eric Levitt said.

Levitt and Vic Grassman, the city’s economic development director, acknowledged the guarantee was a gamble. If Talgo closed its Janesville operation within five years, the city would be on the hook for the remaining lease payments.

“In our opinion, the worst case scenario would have been three years (of lease payments),” Grassman said. “The economy is going up, and we were optimistic that once they came they would stay.

“We’ve got to make stuff happen, and this shows how serious we were.”

Levitt and Grassman, both relatively new in Janesville, said the lease guarantee could be unprecedented.

“It’s the council’s policy to try and be as aggressive as we can to bring jobs,” Levitt said, adding the council was aware of the proposal and planned to vote on it next week.

“Vic has some ideas on how we can become more creative with incentives to get companies to expand or locate here, and this is an example of that.”

Sheridan said local leaders worked hard to lure Talgo and the community is poised for future projects.

“While their efforts were not successful with Talgo, they did set the stage for Janesville to continue to compete for jobs and businesses in the future,” he said.

Last updated: 1:17 pm Thursday, December 13, 2012

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