Tax Incentives

    Last updated on May 13th, 2019 at 02:37 pm

    The federal Renewal Community program, which encourages businesses to be located in lower-income areas and employ people who live in those neighborhoods, is paying off for some Milwaukee companies. Two of the provisions of the Renewal Community Wage Credit and Commercial Revitalization Deduction provide a business with a tax break of up to $1,500 per employee per year and allow an accelerated depreciation period for redeveloped commercial real estate in lower-income areas. The tax incentives are available from Jan. 1, 2002 through Dec. 31, 2009. The Renewal Community wage credit is transferable for up to 20 years.

    At the end of 2005, Milwaukee officials were able to expand the boundaries of the city’s Renewal Community area. The Milwaukee Renewal Community program was established in 2002, and parts of it now run from Cleveland Avenue on the south to Mill Road on the north, and from the lakefront to 92nd Street. Some Milwaukee businesses are taking advantage of the Renewal Community program, which is one of 40 in the nation. Intec, a Milwaukee-based acoustic insulation company, moved into a 61,000-square-foot redeveloped headquarters and warehouse facility at 321 N. 25th St. in Milwaukee’s Menomonee River Valley last year.

    The property is within the city’s Renewal Community boundaries. The company’s offices were formerly located in Milwaukee’s Brewers Hill neighborhood, while its garage and warehouse were in West Milwaukee.  The Commercial Revitalization Deduction has played a large role in the redevelopment of the Intec building, because it was a former tannery, needing extensive cleaning, remodeling and even partial demolition, said Jaime Hurtado, owner and president of the company.

    The portion of the building that faces 25th Street needed to be demolished, due to cracking and settling, Hurtado said. That part of the structure was replaced and now houses the company’s administrative offices and meeting area. "The depreciation (from the Commercial Revitalization Deduction) has been a tremendous boost," he said. "This used to be a dilapidated building, and it’s now thriving with work. It’s changed the look of the whole corner." Since the move, Intec has grown from 25 to 45 employees. Eleven of those workers live in the neighborhood and helped the company generate about $16,000 in Renewal Community Wage Credits last year, Hurtado said.

    Those credits have helped the company pay for employee training, he said, which is needed, because there aren’t specialized courses at Milwaukee Area Technical College that teach acoustic insulation. "It’s a specialized field," he said. "A lot of it is learned in the field." If other businesses seeking to expand or entrepreneurs seeking to start new companies took advantage of the Renewal Community program, the city’s landscape could drastically change, Hurtado said. "Imagine if there were 100 more employers like us," he said. "There could be more than 1,000 people employed. We like that our employees live nearby. A lot of our employees that were renters have become homeowners, and that’s another benefit for the city."

    Michael and Amy Richichi will open a new Moondance Coffee cafe this weekend in a commercial building at 207 E. Buffalo St., in Milwaukee’s Historic Third Ward, which is also within the Renewal Community boundaries. The new 1,700-square-foot cafe will be the couple’s third. Their other two locations are at 27th Street and West Drexel Avenue in Franklin and at 5620 S. 108th St., Hales Corners. The Third Ward building that will house the new cafe has offices on its upper floors and several art galleries and stores on its ground floor and basement, giving the couple a built-in clientele.

    The new store will employ about 12 people, Michael Richichi said, and he’s hoping to find as many employees as possible who live within the Renewal Community boundaries. Because the Renewal Community Wage Credit can be rolled forward for up to 20 years, the Richichis could use the credits in the future, even if they don’t find employees who live within the Renewal Community right away. The programs also can help owners of businesses make re-investments into burgeoning companies. "When you have the ability to take advantage of credits like facade grants and (the Renewal Community Wage Credit), that makes a difference," Michael Richichi said.

    The Richichis learned about the Community Renewal program from Michael Burzynski, a certified public accountant and partner at Milwaukee-based Komisar Brady & Co. LLP. The Renewal Community programs are one of several tools Burzynski said he uses to help clients save money. "It’s another tax tool, another thing as an employer, where you want to know where you can save or make money," Burzynski said. Dan Glomski, another accountant with Komisar Brady, said some of his clients have been able to recover $30,000 to $40,000 per year with the Renewal Community wage credits, which have given them another source of money to put back into their businesses.

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    You can find more information on Milwaukee’s Renewal Community program, visit these Web sites:

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