PLATTEVILLE, Wis. — A Fortune 500 corporation has canceled plans to open a warehousing, light manufacturing and distribution center in Platteville that would have employed at least 200.

Officials from Cummins, an engine and power generator manufacturer, confirmed the news Tuesday, stating that market conditions caused the company to reconsider investment in its facilities.

“The past couple of years have been pretty challenging to our company, both in terms of COVID-19 impact and … a myriad of global supply challenges that have led to increased prices and parts shortages,” company spokesperson Jon Mills said.

Cummins intended to lease for 10 years a 342,000-square-foot building from Indianapolis developer Scannell Properties, which would oversee construction.

The structure would have been located on a nearly 21-acre lot adjacent to Vision Drive and Eastside Road in the Platteville Industrial Park. The city planned to transfer ownership to Scannell for $20.78.

But unanticipated construction costs stymied Cummins project managers, who amended the $20 million venture so that construction would occur in two phases.

Cummins also rebid the project, but Mills said prices had roughly tripled.

Following the onset of the pandemic, wholesale prices of lumber and other construction materials have rocketed 38% relative to February 2020, according to the U.S. Bureau of Labor Statistics.

“I’m disappointed that their plans didn’t work out,” said Platteville Common Council President Barb Daus. “On the other hand, I’m incredibly proud of our city and our staff that worked very diligently to work through details.”

Cummins first announced the proposed Platteville facility in February, and construction was originally slated to start April. It would have supported a nearby Cummins manufacturing outfit in Mineral Point, Wis., the operations of which will continue.

Platteville officials had hoped the new operation would increase property values in the tax-increment financing district that encompasses the industrial park so that the district would not require taxpayer support in the future. The long-term impacts of the project's cancellation are unclear.

“With that tax base, there were plans to use that for road projects that would benefit the city,” City Manager Adam Ruechel said.

Company pullouts are relatively uncommon after projects are unveiled, according to Ron Brisbois, executive director of Grant County Economic Development Corp.

“But with COVID and the increase in construction costs, it’s not necessarily a shocking situation,” he said. “To construct a building … during the timeframe they were looking at would have added a lot of costs.”

Brisbois said he knows of several businesses in the region that have delayed expansions this year for similar reasons.

The city intends to nullify the development agreement with Scannell and will resume marketing the property in concert with Platteville Area Industrial Development Corp.

Mills said Cummins will “certainly consider Platteville for future investments.”

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