Talgo Picks Site for Train Manufacturing

MILWAUKEE-A Spanish train maker has agreed to be the first to lease on 84 acres at an abandoned manufacturing site here. Talgo Inc., the US subsidiary of Spain Patentes Talgo SL, will lease half a building at the former Tower Automotive site on West Townsend Street, after the city completes $30 million of redevelopment on the new business park. Talgo will build two 14-car high-speed train cars as part of a $47 million contract with the state.

A.O. Smith first opened the property a century ago to build car undercarriages, at one time employing more than 9,000 people. Tower bought the property in 1996 to make automotive and truck frames, then went into bankruptcy in 2005. The City of Milwaukee bought the property for more than $4 million in December 2009 and plans to either renovate or remove the more than 12 buildings. Talgo will lease about 138,000 square feet in a 300,000-square-foot facility to put together high-speed train cars, which are built in Spain and will be shipped to Milwaukee for assembly.

A Talgo spokeswoman tells GlobeSt.com that the company will lease the space for two-to-four years, with a five-year possible extension. The company may also expand in the building, and hopes to buy the property eventually, she says. “It all depends on the demand that comes out of the US,” she says. The company also has a maintenance facility in Seattle.

The state contract also provides an option to buy two additional train sets. In January, Gov. Jim Doyle announced Wisconsin will receive $823 million in American Recovery and Reinvestment Act funds to build high-speed rail service to connect its centers of commerce and create thousands of jobs. The state is receiving $810 million to build high-speed passenger rail service between Milwaukee and Madison, $12 million to improve service between Chicago and Milwaukee, and $1 million to make final determinations on a route between Wisconsin and the Twin Cities.

Talgo picked the site from among six properties throughout the state. Jeff Fleming with Milwaukee’s Department of City Development tells GlobeSt.com that the city made a competitive bid for the lease rate of its building (which has not been disclosed). “I think the city was able to establish a partnership with the company,” he says. “Also, the location is attractive, we’ve got strong rail access right near the high-speed rail connection.” Fleming says the city will own and develop the property, which is considered a brownfield but doesn’t have “overwhelming or significant” pollution. The city has some experience in park redevelopment, having overhauled the Menomenee Valley industrial site into 12 available acres for manufacturing.