Milwaukee Tool's plan to take over a downtown Milwaukee office building
got its first public hearing this week, where city officials revealed the company has committed to a $15 hourly minimum wage for service employees working there.
A local labor union pressed the city and Milwaukee Tool for additional commitments, such as a guarantee that service workers at the building receive benefits and other protections.
The Redevelopment Authority of the City of Milwaukee convened the public hearing Thursday afternoon to consider a proposed $20.2 million city incentive plan that would facilitate the company's expansion into downtown.
The city is looking to establish a new tax incremental financing district, which would provide Milwaukee Tool grants for its redevelopment of the former Assurant building at 501 W. Michigan St. The grants would be contingent on job creation.
Under the terms of the agreement, an initial $12.1 million grant would be given to the company for building renovations. In turn, Milwaukee Tool is committed to employing at least 1,210 employees there in six years.
Milwaukee Tool could receive another $7.9 million grant if it expands the office to make room for another 790 employees.
RACM members unanimously endorsed the proposal. It still needs approval from the Milwaukee Common Council.
Ty Staviski, chief financial officer of Milwaukee Tool, said the company will invest $30 million into the building, including acquisition and improvements. It will house one of Milwaukee Tool's business divisions, he said, but did not specify which one.
"This isn't a shift of headcount from our current locations in Brookfield or Menomonee Falls," Staviski said. "These are newly hired individuals that have been recently hired over the last 12 months and will be hired over the next 12 months."
Dozens of members of the Service Employees International Union Local 1
and Milwaukee Area Service and Hospitality Workers Organization
attended the meeting in support of more protections for service workers.
Jack Hanson, a policy analyst with MASH, said the proposed development agreement was a "far cry from what it should be."
He and others argued that a $15 hourly wage commitment isn't enough, and that service positions should also be provided benefits and job protections. Hanson also questioned whether Milwaukee Tool, which is experiencing immense growth, requires a public subsidy to finance the project.
Lafayette Crump, commissioner of the Milwaukee Department of City Development, said Milwaukee Tool is the first company to agree to a minimum wage for service workers as part of a development agreement with the city.
"The $15 an hour commitment by this company to those workers is something you have not seen as part of a development agreement or part of an agreement when the project is under consideration for a TIF," he said.
The Bucks agreed to a $15 minimum hourly wage for the service employees working at Fiserv Forum. But that deal was struck well after government incentive agreements were in place, Crump said.
The Milwaukee Tool office would require between 15-20 service employees, working such jobs as janitorial, food service and security. They would work for other companies that contract with Milwaukee Tool to provide those services. As such, Milwaukee Tool would make the $15 wage a requirement as part of that contract.
Another first-time provision in the Milwaukee Tool development agreement are requirements tied to workers actually being in the office, said Dan Casanova, economic development specialist lead with DCD.
At least 60% of the employees have to be working in the downtown office for the job numbers to qualify for incentives, he said. Employees working from home can count toward that percentage if they are Milwaukee residents.
That requirement is a product of the COVID-19 pandemic, where many office employees have shifted to working from home full time on at least a temporary basis.