Last year did not reprise the construction booms in 2015 and 2016 that brought more than $150 million in commercial and industrial projects to Janesville.
About $44.5 million in commercial projects unrolled in 2017, according to city construction permit data. Despite that sizable number, one city official acknowledged that the pace was slower compared to the previous two years.
Economic Development Director Gale Price said the construction of Dollar General’s 1-million-square-foot distribution warehouse in 2016 was a major driver in the $100 million worth of commercial construction that year.
Dollar General’s ramp-up to 500 workers came as the local labor market was tightening amid the lowest unemployment rates seen in Rock County in two decades. Price thinks the Dollar General projects might have tempered the pace of other projects.
“One thing we’ve heard is that you get a big-box (development) that comes in and changes the employment game, people want to wait to see how the market balances out,” he said. “We certainly haven’t seen the same level of industrial development since then.”
If a logjam slowed activity over the last several months, Price said it could start to clear in 2018.
The city is now in talks with companies and developers about “five or six” projects, some of which Price believes could be announced this year.
“We’ve got a number of industrial users now who are taking a look at us instead of flying over,” Price said.
One new project that has been announced is a 100,000-square-foot expansion at United Alloy, located at 4100 Kennedy Road on the city’s far north side.
United Alloy, which manufactures and powder coats metal boxes, trailers, tanks and other heavy vehicle components, recently landed a new contract that the city said required an expansion, including new painting, assembly and shipping lines.
The expansion will boost the number of workers from 180 to about 246, according to a city memo.
The city in December approved a $10 million industrial revenue bond for the project, which will be backed by United Alloy and monitored by federal regulators. The bond will accelerate the expansion, which otherwise might have developed in another state.
Other commercial and industrial renovation projects also are rolling out.
Last year, Price said, a new owner renovated space inside a 490,000-square-foot facility at 2900 Beloit Ave., which had been vacated by John Deere after the company moved its light manufacturing and warehousing to Horicon.
Price said that property is being “aggressively” marketed for lease.
On the retail side, the former Menards along Highway 14 is being cut into multiple retail stores in a project known as “The Marketplace at Janesville.”
Madison developer Steve Doran didn’t respond to a Gazette inquiry on the project’s status. Crews this week were working inside the new stores, and in the last few weeks, they’ve put up signs advertising that the businesses will open soon.
James Otterstein, Rock County economic development manager, said Janesville and Rock County have a “solid” inventory of land for industrial and commercial development. However, he pointed out that in Janesville, almost all of the light industry and warehousing sites built in 2015 and 2016 is filled.
Otterstein also said Rock County has a shortage of designated, shovel-ready parcels 100 acres or larger—the size most suited for developing large-scale, industrial facilities.
He estimated that in the last four years, development has eaten up about half of Rock County’s shovel-ready land. In 2013, the county had about 610 acres of shovel-ready land available. As of late 2017, the inventory had shrunk to about 356 acres, he said.
Meanwhile, Commercial Development Company, the new owner of the former General Motors plant, says it will begin to demolish the 4.8-million-square-foot auto plant and clear the land for redevelopment this spring.
That could take a year to 18 months, Commercial Development officials have said, but when parcels at the former GM site hit the market, they will add hundreds more acres of industrial land.
Even as Commercial Development tackles its redevelopment project, Price said city officials could discuss tacking land onto the business and industrial parks. It’s something they discussed in 2017 but postponed acting on, Price said.
“Certainly, one of the concerns would be (the city) taking on additional land around the time the GM property becomes available for development,” Price said. “You don’t want to be in the position where we’re competing with each other and stepping on each other’s toes.”
Price said Commercial Development’s project won’t necessarily preclude the city from working on other development deals.
“If we have other large users that look at us again, like a million-square-foot box, we’ll pursue that,” Price said.
Kevin Hickman, a vice president for commercial construction firm JP Cullen, said he believes commercial builders and developers are still looking at Janesville—particularly along its Interstate 90/39 corridor—as a key spot for commercial and industrial development.
Hickman believes expansions at such manufacturers as United Alloy will continue to ramp up over the next few years where space allows. He also thinks there is ample shovel-ready land to draw new commercial and industrial projects in the near term.
One unanswered question, Hickman said, is whether there will be enough construction labor for continued growth in the coming years.
Hickman said JP Cullen has begun programs to cultivate interest in the construction trades, mostly through outreaches to local school districts. Right now, he said, industry surveys show only about 6 percent of high school students want to pursue careers in the skilled building trades.
Area contractors lose far more skilled construction workers than they’re able to hire, mainly because of retirements, he said.
And he said there’s emerging concern that construction of Foxconn’s $10 billion mega-factory in rural Racine County and related supplier projects might pull skilled construction workers away from outlying areas, including Rock County.
He called it the “Foxconn effect.”
In 2017, local residential builders told The Gazette a shortage of skilled contractors was making building new homes a challenge, even as the market was ripe for new residential real estate.
Construction of single-family homes and duplexes climbed from about $11.7 million in 2015 to $19.9 million in 2017, according to city records. That’s via a 40 percent increase in the number of new homes built in 2017, compared to two years earlier, and a 36 percent jump in the cost to build new homes, according to city data.
Otterstein said Rock County’s position along major Interstate corridors continues to be a draw for commuters from northern Illinois and Dane County.
Some local economic development officials also have said that an increase in affordable, readily available housing—whether apartments or homes—could draw more workers and entice new companies to locate in Janesville.