Generac Power Systems expects to begin construction later this year of a new industrial generator manufacturing plant in Beaver Dam, following the City Council's approval Monday of a development agreement with the city.
Under the agreement, the Waukesha-based company will build a 320,000-square-foot factory and offices with a minimum taxable value of $35 million on a 65-acre parcel in the city's Highway 151 business park. The agreement calls for the city to sell the land to Generac for $1 and provide a $4.5 million tax incremental financing grant to Generac upon completion of the building. At $30,000 an acre, the land is valued at just shy of $2 million. Generator Super Silent
In return the company agreed to make tax payments on the building's $35 million minimum value through 2036, when the TIF district is scheduled to expire. The agreement requires construction to be completed by June 30, 2025.
"The company has been very good and working with the community to secure this in a number of ways so that the city's risk is minimized," said Trent Campbell, executive vice president of the Beaver Dam Area Economic Development Corp.
Campbell said the city needs to finalize some details of the land sale, including title documents and a certified survey map, but hopes to close the sale next month.
The agreement includes a five-year option to develop an additional 22.9 acres to the west of the site, which the city would also sell to Generac for $1. The option would require Generac to build an additional 114,500 square feet of manufacturing space and sign a new developers agreement.
Generac expects to eventually employ up to 400 office and production workers at the site. A company spokesperson was not immediately available for comment.
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The company is investing in manufacturing space at a time when industrial scale generator sales are surging even as the company's core home-generator business is slumping.
Generac reported commercial and industrial generator sales of $384 million, or nearly 40% of its $1 billion in revenue for the quarter ending July 31. That was a 24% increase over the same period in 2022. The company said it anticipates future growth rates in its industrial and commercial sectors "in the mid-teens."
"The demand for our industrial generators continues on a rapid growth trajectory, and this new facility will help us to best meet the needs of our customers," Generac president and CEO Aaron Jagdfeld said when plans for the new plant were made public last week.
Campbell called the agreement "a home run" for the community.
"We recognize that Generac's an institution in Wisconsin and we couldn't be more excited that they've chosen to join the Beaver Dam business community," he said. "The financial impact on the tax incremental district that they'll be locating in will be very beneficial to Beaver Dam, from both a tax base and a job creation perspective."
Deisel Generator Generac also has manufacturing operations in Berlin, Oshkosh, Jefferson, Eagle and Whitewater.