Can The Success Of Milwaukee's Global Water Center Be Duplicated Elsewhere?

Every successful office market shares two common strategies: identifying the industries driving market demand, and leveraging the available cluster of infrastructure, land and other assets. It is how Merchandise Mart transformed itself from a trade showroom into one of Chicago's tech epicenters.

A similar transformation is happening 90 miles to the north, in Milwaukee.

The Global Water Center is a 98K SF facility that is home to 45 companies focused on water technology. It serves as an accelerator space for water technology startups and existing water-related companies, and houses water-related research facilities for those companies and the University of Wisconsin-Milwaukee's School of Freshwater Sciences and Great Lakes Water Institute.

The Global Water Center's founding dates back 10 years, when the City of Milwaukee was going through a regional economic development effort and was rounding up the surrounding counties to collaborate on a plan. Consultants studying the makeup of Milwaukee's economy discovered that there was a strong dominance around water technology.

The Water Council CEO Dean Amhaus, whose organization helped found the center, said Milwaukee has been connected to water technology for over 150 years, when breweries produced the alcoholic beverage that made the city famous. Brewers came to Milwaukee seeking out the manufacturing suppliers — makers of pumps, faucets, fixtures, valves and meters — that could help them process and distribute water. Amhaus said no one involved in drafting Milwaukee's economic development plan recognized this before, because there was no business code for water tech.

The reach of water technology as Milwaukee's dominant industry went beyond manufacturing. UW-Milwaukee's School of Freshwater Sciences is the only freshwater science school in the U.S., and one of only three worldwide. The Great Lakes is the largest freshwater system on the planet, a significant resource since one out of five people globally lack access to clean water. The school's research focuses on how fresh water is fundamental to economic development, and how clean freshwater systems and water treatment lead to a better environment and quality of life, something Milwaukee had to deal with firsthand: a 1993 cryptosporidiosis outbreak was the largest waterborne disease outbreak in U.S. history.

Amhaus said that The Water Council was formed to pull all of this together as a generator for economic development, to attract water-related businesses to Milwaukee and put the city on the map as a global research hub.

With the help of the Wisconsin Economic Development Corp., the Water Council bought its building in Milwaukee's Walker's Point neighborhood for $2M in 2010, a time when no banks were lending for such projects. The building was a former family-owned cardboard box factory that was storing secondhand seat belts. The family agreed to sell the building to the Water Council under one condition: that the structure would be home to something remarkable.

"We wanted to build Disneyworld for water geeks," Amhaus said.

The Water Council chose the building because of its location. Amhaus said it wanted the Global Water Center to be near UW-Milwaukee and the fresh water science school. Walker's Point at the time was a neighborhood needing help in development, and the building's renovation qualified it for historic and new market tax credits. Walker's Point was also targeted as the third phase in Milwaukee's economic redevelopment, after downtown and the Third Ward.

The Global Water Center and the city designated the immediate area a tax increment financing district in September 2013. Within two years of the center's opening there was $212M in new development in the immediate area, and another $200M to $300M after that. The new development is mixed-use commercial, retail and entertainment, and residential is starting to enter the market. Amhaus said he has talked to developers about redeveloping older buildings in Walker's Point so that wastewater from these buildings can be sent to a planned wastewater energy system intended to take Walker's Point off the grid.

UW-Milwaukee Associate Vice Chancellor David Garman said the fresh water science school has always been sought out by researchers and water industry firms, but the Global Water Center brings everything together with a laser focus. UW-M took a 10K SF floor and filled it with $1.5M in water-related high-tech equipment. These labs are accessible for both students and tenants with a water technology-related contract.

Garman said the culture inside the center is remarkable. Students and researchers are working alongside urban planners, chemists, physicists, engineers and applied mathematicians. Since the center opened, six patents have been approved whose origins started there, a handful of startups have moved to the center, which is 99% occupied, $6M in research has been generated, and there is a global interest in the labs from governments and private businesses that see water technology as the future.

One of the startups that calls the Global Water Center home is Optik Technik, which focuses on using automated controls to treat wastewater in small industrial plants at lower costs and higher efficiency. Optik Technik CEO Jose Ramirez said he was looking at smaller industrial spaces three years ago near his home in the Libertyville/Vernon Hills area when a professional acquaintance told him about the center and put him in touch with Amhaus.

"I was blown away," Ramirez said.

He had never seen the concentration of resources that the Global Water Center had under one roof. It was not only the research facilities and other startups, but service providers like a law firm and an accountant. Ramirez said all the resources were in place that would allow him to accelerate product development and fill the gaps in scale that other young startups would have. Ramirez has been commuting round trip from the north suburbs to the center for three years, but said that being at the center has allowed him to take Optik Technik to the next level. Ramirez even founded a second company after talking with a professor at the center over coffee.

Amhaus believes the Global Water Center's success can be duplicated in other markets and industries, but said that the foundation for the center's success — Milwaukee's cluster of water technology-based businesses — was already in place before the center was even a dream.

"You cannot build or create a cluster of assets like what was available here. You find that cluster and determine what to do with it," Amhaus said.