Milwaukee aldermen seek community investment requirement for city-backed downtown projects

Rendering: Stephen Perry Smith Architects
Rendering: Stephen Perry Smith Architects

Last updated on April 30th, 2021 at 11:00 pm

In response to the debate over a Milwaukee Tool city incentive deal, a group of aldermen are pushing for a new policy that would require any projects downtown that receive a subsidy from the city to also invest in the surrounding neighborhoods.

Alderwoman Milele Coggs announced Wednesday she was introducing the legislation. Its co-sponsors were alderwomen Nikiya Dogg and Chantia Lewis, and aldermen Khalif Rainey and Ashanti Hamilton.

According to a news release, the legislation would direct Milwaukee’s Department of City Development to craft such a policy. The release didn’t specify what the required neighborhood investment would be.

“Having a strong, vibrant and healthy downtown is important, but our city as a whole is only as strong as our neighborhoods, and this legislation starts us down the path of creating more equity so that projects focused in the downtown area can be felt throughout Milwaukee,” Coggs said in a statement.

The announcement came a day after a four-hour meeting of the Zoning, Neighborhoods & Development Committee over a proposed $20.2 million incentive plan for Milwaukee Tool’s expansion into downtown.

The discussion at times turned into a larger debate about things such as Common Council input on deal-making and how Milwaukee’s neighborhoods could benefit more from these projects.

“The discussion around the Milwaukee Tool project underscored that we should be having conversations about the inclusivity of major projects as early as possible so that the greatest impact can be created and generated from the onset. I look forward to working with the department, my colleagues and other stakeholders as we work to set a high standard for these developments moving forward,” Coggs said.

Jeff Fleming, a spokesman for DCD and Mayor Tom Barrett’s office, said DCD looks forward to seeing details of the legislation. He said it is “entirely appropriate” to discuss the legislation following a vote on the Milwaukee Tool incentives.

Common Council will vote on final approval of the Milwaukee Tool deal on Tuesday.

Tracy Johnson, president and chief executive of the Commercial Association of Realtors Wisconsin, said community incentive requirements should be negotiated on each financing deal individually. Instead, the proposed legislation offers a one-size-fits-all approach.

“I think by creating these requirements to all (TIF districts) going forward, you lose the opportunity to consider each of these projects on their merits,” Johnson said.

Under the Milwaukee Tool agreement, the city would establish a new tax incremental financing district and give an initial $12.1 million grant for building renovations, and Milwaukee Tool in turn would commit to employing at least 1,210 people there in six years. Another $7.9 million company-financed grant could be given for a building expansion. In turn, the company would add up to 790 employees in its downtown office. Milwaukee Tool would also commit to a $15 an hour minimum wage for all contracted service workers at the building.

Barrett testified at Tuesday’s hearing in support of the Milwaukee Tool project. He said the city’s neighborhoods benefit from downtown development in a number of ways.

He pointed out that downtown TIF districts support other districts that are struggling to break even. Knowing this, the city can afford to be more aggressive in financing neighborhood development efforts.

An example he used was the Century City TIF district on Milwaukee’s northwest side. It recently received donations from three other districts to pay off its debts.

“The challenge with TIFs as a tool, is there has to be incremental growth,” he said. “And if the neighborhood doesn’t have the ability to support the incremental growth, is TIF a good tool for that? The answer is oftentimes unfortunately no, because the increment isn’t there. But what we have done, and I think we’ve done it very effectively, is we have to the extent allowed by state law been very proactive and aggressive in trying to have those TIFs doing well help out those TIFs that aren’t doing very well.”

The “extra” years in the life of a TIF district can also be used to support more affordable housing in the city, Barrett said.

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Alex Zank
Alex Zank covers commercial and residential real estate for BizTimes. Alex previously worked for Farm Equipment magazine and also covered statewide construction news at The Daily Reporter. He graduated from the University of Wisconsin-Eau Claire, where he studied journalism, political science and economics. Having grown up in rural western Wisconsin, Alex loves all things outdoors, including camping, hiking, four-wheeling and hunting.

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