Dave Reid

M.O.R.E. Ordinance Approved by Committee

By - Mar 3rd, 2009 07:45 am
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The Milwaukee Opportunities for Restoring Employment ordinance was the primary reason behind this special meeting of the Community & Economic Development Committee.  The ordinance intends to increase the required percentage of City of Milwaukee residents hired to work on city projects and development projects receiving more than $1 million in TIF assistance.  Additionally it mandated a prevailing wage to be paid for these projects and set a higher Emerging Business Enterprise (EBE ) utilization level as well.  The proposed ordinance brought out a large group of both supporters and opponents.  Alderman Ashanti Hamilton attempted to frame the discussion early on saying that “there are many people who may come to the table and say this is the wrong time to do something like this” and indicated that he felt the time was right to move on this ordinance.  He added that “I submit to you that the price has already been too great”.  Alderman Nik Kovac explained that “in the end this is not a philosophical question, it is a practical question” and lent his support saying that “I think we have a document that comes close to being a win win win”.  An extensive list of developers and real estate professional spoke in opposition to the ordinance though primarily the development community opposed the ordinance because of the prevailing wage mandate.

Richard Wanta, Executive Director of the Wisconsin Underground Contractors Association, spoke in opposition of the project saying that “the same city has chased us out of town for decades”.  He went on to point out that there is currently only one major water and sewer contractor in the city, so once this passes that contractor is especially likely to get all of the available work in the area because of the new regulations.

Dick Lincoln, Senior Vice President of the Mandel Group, started his remarks saying that “the camel is a horse that is designed by committee” indicating the ordinance wasn’t quite right but went on to say that “we’re almost there”.  He explained that generally he felt the ordinance was a positive but that the prevailing wage requirement was problematic.  He argued that it works against minority hiring, as smaller companies often compete on price, and that this would add substantially to the cost of the project.

Barry Mandel, President of the Mandel Group, pointed to the PERC requirements in the Park East and tied them to the fact that development has been non-existent in the county owned portion of the Park East.  He then pointed to The Brewery and The North End projects as two projects that have been moving forward because they utilizing non-prevailing wages.

Greg Uhen, President of Eppstein Uhen Architects, spoke out against the proposed ordinance saying that “my concern is that it will reduce the number of opportunities that come to the city” and that he felt “this is another roadblock, another reason for them not to come”.

The line of members in support of the ordinance were at least as lengthy as those who spoke in opposition of the ordinance.  They argued the ordinance would be a a means to improve the City of Milwaukee by putting more residents back to work, and that it would bring equity to hiring standards.

Shelia Cochran, Secretary-Treasurer of the Milwaukee County Labor Council, said some of the comments regarding the prevailing wage requirements were “appalling” and went on to say “why in this day and time has it become fashionable that a black man’s labor is worth less than a white man’s labor” which riled up the audience and prompted Alderman Davis to respond “you have one minute left to continue to chastise them”.

Former Mayor Marvin Pratt explained that he is working with a development group that will adhere to these rules in the Park East, implying that if his group can make the PERC requirements work then other developers can get by with the MORE requirements.  He also spoke of his efforts in the past related to improving minority hiring practices and requested the Common Council “do away with gradualism” and approve this ordinance right away.

Lyle Balistreri, President Milwaukee Building & Construction Trades Council, explained that within the trades there is currently 20 – 25% unemployment and expressed his support for the ordinance saying “it’s a great ordinance”.

Pam Fendt, of the Good Jobs Livable Neighborhoods Coalition, argued that there really is no conflict between paying prevailing wages and increasing the hiring of minority workers.

After the public hearing the ordinance was taken in to committee for debate and an eventual vote.

Alderman Willie Wade spoke forcibly in support of the ordinance saying that “this is a highly emotional issue” but that “we’re here to fix something that’s not working”.  He appeared to speak directly to the development community saying that “it only applies to you if you take city money” and that “there are too many people getting rich off Milwaukee”.

Alderman Terry Witkowski referenced a letter from the city comptroller indicating that the comptroller believed this ordinance would cause projects to be lost to other cities.  He then went on to say that “I have grave reservation as to [this ordinance] hurting the City of Milwaukee more than helping it”.

Alderman Jim Witkowiak expressed his opposition to the ordinance stating “as this ordinance is written today I can not support it, mostly because of the prevailing wage”.  He explained that many Hispanic owned contracting companies from his district had contacted him and indicated that this ordinance would hurt their business.  It was clear from his statements that the primary concern was over the prevailing wage requirements but otherwise he felt “we’re real close and that it could be great for the City of Milwaukee”.

Alderman Joe Davis, who had ran a very tight meeting, by cutting off all speakers after just a couple of minutes regardless of if they were praying, or attempting to make a point, said that this ordinance was “about equity”.  Further he went on to defend the prevailing wage requirements say that “you’re looking at a Chairman who actually benefited from a prevailing wage”.

This ordinance was approved on a 3 to 2 vote and will now go before the full Common Council.

Categories: Real Estate

4 thoughts on “M.O.R.E. Ordinance Approved by Committee”

  1. Ed Werstein says:

    FDR said it best:
    “No business which depends for its existence on paying less than living wages to its workers has any right to continue in this country. By living wages I mean more than a bare subsistence level–I mean the wages of decent living.”

    1933

  2. Dave Reid says:

    @Ed Sure but to be clear prevailing wages and living wages aren’t the same thing…. And it’s not that nobody on a construction site gets paid the prevailing wage currently, generally many do. But some firms, such as small EBE firms, that have less experience right now bid projects at a lower wage so they can get the work. If they can’t do that then the work will generally go to bigger more experienced firms and it will hurt small firms.

    Further the sponsors of the ordinance exempted these rules from affordable housing projects, so they clearly recognized it will add cost to projects. So we do have to understand what this cost will do in the long run, and how it might interplay with TIF financing.

    To me I want to see more projects, and therefore more people employed in the long run. And I believe the wage requirements do have consequences.

  3. Nate Holton says:

    Has anyone done a decent cost benefit analysis on this? Each side has laudable philosophical reasons for being for/against the proposal, but I’m not sure that people know what they’re arguing over. The developers are going to argue against anything wage-related whether it will actually prevent projects or not. Those backed by labor may support the project without knowing what sorts of long term costs/benefits it may bring. It might be the case that developers have been getting more than their fair share of profit from TIFs and that the bill is simply spreading some of that excess benefit to city residents who really need it. Or, maybe the plan will fundamentally disrupt a shaky economic equilibrium and bring sound and substantial development to a halt. It’s probably somewhere in between, but I’m not sure that people really know, and arguing blind isn’t terribly productive.

    I will say that I’m influenced by Barrett’s support. I don’t know how beholden to labor interests he may be, but he’s generally pretty cautious. I know he had research on other cities done, is this research available anywhere?

  4. Matthew says:

    My problem with the proposal is that it goes against the idea of a TIF. A TIF is suppose to be used for projects which would not be financially viable without them; it should be used to attract new businesses or allow for expansion of current ones. Thus I am wondering how attaching a cost increase to a TIF makes the projects more financially viable, and encourages businesses to move to Milwaukee? Are we trying to attract businesses to the area or not?
    Secondly, what is more valuable to our community, 300 short term construction jobs at prevailing wages, or 150 long term jobs brought in by new businesses, and expanding businesses. My personal thought is that I would rather have the permanent jobs(even if they are fewer than the construction jobs) over the temporary jobs so why are we risking the permanent jobs for the sake of a short term gain?

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