Kohl's plans to build a 900,000-square-foot office complex on the site, said village manager Mark Fitzgerald. The deal requires the company to begin the project within the next three years. Construction is expected to take three years, he said.
"This real estate will provide Kohl's the opportunity to develop office space that would serve as a second corporate campus to support the company's long-term business growth," the company said in a statement.
In addition, the Wisconsin Economic Development Corporation (WEDC), will create an enterprise zone to provide up to $62.5 million in state tax credits over 12 years to support Kohl's growth, Gov. Scott Walker announced this morning. The actual amount of the tax credits received by Kohl's will be completely dependent upon the number of newly created jobs and the amount of Kohl's capital expenditure, the company said.
"Strengthening Kohl's headquarters is good news for Wisconsin," said Walker. "Not only is this a significant number of jobs, but it also signals that Wisconsin's economic climate is improving."
When the company decides to begin construction, the village will provide the necessary road improvements and up to $12 million, payable over several years, from the incremental tax revenue to be generated by the Kohl's development, the company said.
Earlier this year Kohl's rejected an offer from the city of Milwaukee for a $125 million incentive package to build a new corporate headquarters in the Park East corridor in downtown Milwaukee. If Kohl's had built a new headquarters in downtown Milwaukee the state would have provided a tax credit package similar to the $62.5 million package it is providing for the Menomonee Falls project, WEDC spokesman Tom Thieding said.
"Our approach was to keep them in the state," Thieding said. "Our approach is to try to be site neutral (within the state)."
The company has about 3,000 employees in Menomonee Falls and several commercial real estate sources say its office space there is cramped.
Kohl's said it will also acquire a 55,000-square-foot office building adjacent to the vacant land in Woodland Prime. In exchange for the building and land, Menomonee Falls will assume ownership of Kohl's 530,000-square-foot former distribution center located at N54 W13901 Woodale Dr. in Menomonee Falls. The transaction is expected to close this fall.
The village plans to use part of the former distribution center building as a public works facility, Fitzgerald said. The rest of the facility will be leased to other tenants. Kohl's will remain a tenant of the building on a temporary basis.
Under the terms of the deal, for up to three years following the closing of the property exchange, Kohl's can elect to develop the vacant land as incremental office space, the company said.
Following the development of a second campus, Kohl's said it plans to continue operating its current corporate headquarters at N56 W17000 Ridgewood Dr., located just north of Silver Spring Drive, and its credit service center located at N54 W13600 Woodale Dr. in Menomonee Falls.
"We have been proud to call Wisconsin home for the last 50 years and are pleased to be renewing our commitment to the state and to our communities, customers and associates by selecting this location in the place where it all started for us," said Kevin Mansell, Kohl's chairman, president and chief executive officer. "While it was always our preference to remain in Wisconsin, Kohl's took the needed time to study all of our options, including an assessment of developing a campus outside of the state of Wisconsin. Our goal has been to find the location that best positions us to remain an employer of choice, retain and attract the best talent and to satisfy our responsibilities to our shareholders and associates. The Woodland Prime site accomplishes that goal and gives us the room we need to satisfy our business needs for decades to come. Throughout the process, we have found officials at all levels of government, both at the state and local levels, to be strong partners in business development and thank them for their enthusiasm and support. I am confident the great quality of life, talented workforce and extraordinary business partners here in southeast Wisconsin will allow us to continue delivering great things to Kohl's shoppers well into the future. We look forward to sharing our plans as they are finalized."