Minneapolis-based Ryan Companies US, Inc., is breaking ground this Friday on a large new distribution center for the Bloomington-based Toro Co. in Tomah, Wis. The small Wisconsin city is approximately 170 miles southeast of Ryan’s downtown Minneapolis headquarters.
The $11.65 million project calls for a 350,000-square-foot distribution facility on a 38.5-acre site. Ryan will own the property and lease it to Toro. Toro already operates a 320,000-square-foot manufacturing plant in Tomah. The project is slated for completion in September.
The new project will replace an existing 310,000-square-foot warehouse/distribution center it leases in Baraboo, Wis., about 60 miles away from Tomah.
The formal groundbreaking ceremony on Friday morning will include representatives of Toro, Ryan and Tomah city officials.
“With the total package that we put together for them…it made a lot of sense for them. It was the right time to do this project,” said Casey Hankinson, director of development for Ryan Companies.
Hankinson said that a key component of the deal was being able to acquire the land cheaply from the city.
“The city owned the land where the site was. We were able to buy the land from them at a very economical rate. Land pricing is a huge component of all real estate deals. The city recognized the importance of Toro,” Hankinson said.
Toro, founded in 1914, is best known for its lawnmowers. Today the company makes an array of turf and landscape maintenance equipment and precision irrigation systems. Equipment manufactured at the Tomah plant is used for maintaining golf courses, athletic fields, public green spaces and commercial properties.
“Various sites in neighboring communities were evaluated for convenient proximity to the Tomah manufacturing facility, site access, land size, location to highway infrastructure, and price,” wrote Branden Happel, a spokesman for Toro, in an email.
“After a thorough, independent analysis of several groups we selected Ryan for several reasons. Being a general contractor, they handle all aspects of the build; everything from start to finish. We have a strong history with the company as they have done several projects for us in the past. And, they had the financial stability which was important in today’s economy,” Happel added.
In December, Toro reported revenue of $1.52 billion and net earnings of $62.8 million for its fiscal 2009, which ended in October.
Hankinson said that Ryan has a long-standing relationship with Toro, but landed the project through a competitive process after the company issued a call for proposals.
Hankinson said that the developers need to have their eyes open today to find fresh business.
“The projects are fewer and far between, you’ve got to have your antenna up for all different sorts of opportunities,” Hankinson said. “Development is hard right now unless you have a really good, quality tenant.”
Source: Finance & Commerce (Minneapolis)