MILWAUKEE COUNTY DEPARTMENT OF ECONOMIC DEVELOPMENT
Market Assessment and Tax Incremental Feasibility Study
Milwaukee County Research Park

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S. B. Friedman & Company was engaged in July 1993 to conduct a market assessment and prepare tax incremental financing projections for the Milwaukee County Research Park . The purpose of this analysis was to assist the County in deciding whether to provide a guarantee to bonds that would be issued by the City of Wauwatosa . The scope of the assignment included reviewing the proposed infrastructure program and evaluating its risks to the County.

To evaluate the market for the project, both local and national opportunities were considered. National opportunities were studied through a survey of the previous experiences of eight other research parks, as was an extensive report by KPMG Peat Marwick on the Milwaukee County Research Park proposal.

In addition, S. B. Friedman & Company created a data base of development and construction transactions which had occurred during the prior six years. Using a comprehensive listing assembled by the Milwaukee Real Estate Journal, construction projects that were in high-technology industries or that were research-type facilities were identified and evaluated. More than 100 projects were found and segmented by level of suitability for a research park.

The competitive position of the research park then was evaluated against the locations that had attracted these transactions. Location, support services, access, image, momentum, and amenities were included in a qualitative rating system. Capture potential or market share was estimated for the respective market segments.

Future growth was based on projected growth in employment in high-technology occupations using projections prepared by the Wisconsin Department of Industry, Labor and Human Relations (renamed the “Department of Workforce Development” in March 1996). Each market segment was then estimated, and alternative development scenarios created to drive tax increment projections. Comments were also provided regarding market positioning of development, as were key assumptions that would need to be met for the project to perform as projected.

Results: The SBFCo analysis indicated that there would likely be regular development for 30,000- to 40,000-square-foot users and occasional development of large single-use facilities or “wild cards.” The analysis pointed to a practical and identifiable market for the project. Based on the study, Milwaukee County agreed to guarantee TIF bonds issued by the City of Wauwatosa .