Jobs, jobs, jobs
When Tom Barrett won the 2004 mayoral election, he promised to focus on “jobs, jobs, jobs.” Now that he’s gearing up for a reelection campaign next year, the time has come to ask whether he has delivered on his pledge.
In office, Barrett declared Milwaukee “open for business” and pledged to work tirelessly to attract new jobs and retain existing ones. Right out of the gate, his personal involvement in discussions with South Milwaukee-based Bucyrus International contributed to the company’s decision in 2004 to locate a new plant in the city’s Bay View neighborhood.
According to the mayor, other companies, including Direct Supply, Captel and Caleffi, are expanding in Milwaukee resulting in a total of nearly 11,000 new jobs to the city since he was elected.
Another early initiative of Barrett’s was to declare that Milwaukee and her neighbors needed to work together more effectively. He played a vital role in 2005 in launching the Milwaukee 7 initiative whose focus is to enhance the economic viability of southeastern Wisconsin. The group has conducted an analysis of the region’s strengths and launched a website, choosemilwaukee.com, to attract new companies to the area.
Another change from his predecessor is Barrett’s willingness to expand the use of tax incremental financing (TIF) to encourage development. Under this program, the city provides grants, tax breaks and other incentives to get projects built that are expected to return the investment by adding to the value of the city’s property tax base.
The TIF program has been cited by some as an example of how the city relies too heavily on real estate development at the expense of other investments more likely to generate jobs. Last year, the Public Policy Forum (PPF), a local nonprofit think tank, issued a scathing report faulting the city for an overemphasis on construction and for lacking a comprehensive economic plan.
The report charged that Milwaukee spends more than $100 million a year on projects related to economic development but “absent a plan or guiding vision, the city invests in its economy in an ad-hoc fashion.”
It states: “In the cutthroat game of big-city economic development, Milwaukee has wagered millions on real estate development and community development to boost the city’s tax base and stimulate investment in poor neighborhoods. In placing this bet, the city has largely neglected business and workforce development expenditures that aim to bolster personal incomes, create jobs and grow a skilled labor pool.”
According to the PPF report, the city’s TIF program provides a useful example of how difficult it is to conduct meaningful economic development without a comprehensive plan that includes concrete objectives and specific goals. State law gives the city tremendous flexibility to award benefits to projects under a “but for” criteria. In other words, government officials need only to determine that the project would not move forward without the TIF.
So when major TIF proposals are considered (like the redevelopment of the Pabst City site), they often generate controversy because the criteria can be subjective.
For example, the Common Council shot down the first proposed Pabst City TIF in 2005, despite the vigorous support of the mayor, because the proposed restaurant and entertainment tenants were seen as competing with existing downtown businesses.
Months later, the Manpower TIF easily passed and the relocation of the company’s headquarters from Glendale to downtown marked a major victory for the Barrett administration. The Manpower building officially opened last month, and its 900 current employees and 200 promised new ones are expected to provide a much-needed shot in the arm for downtown retail businesses.
But the relocation of the company from Glendale doesn’t alter the region’s employment figures and seems to contrast with the mayor’s emphasis on regional collaboration. And the agreement to provide Manpower’s workers with free parking sets a precedent that other projects will try to copy.
The PPF report notes that in 2005, a city of Milwaukee TIF task force, including labor leaders, developers and city officials, was convened to study the issue of TIF approvals. The result was a more rigorous application process but it was decided that specific “public benefit” criteria (minimum jobs created, minimum private investment, etc.) would be too rigid and thus were not included as part of the task force’s recommendations.
The mayor has taken steps this year to address the concerns raised in the PPF report. A city Economic Development Plan is in the works and scheduled to be released in 2008. The framework for this plan, which is closely tied to the work of the Milwaukee 7, was unveiled at a community development forum in July (see: mkedcd.org/planning/EDP).
The mayor has also assumed control over the region’s workforce development efforts, which were previously under the jurisdiction of the county. He also defends the use of the TIF program as an essential tool to leverage city resources to grow the economy. And TIFs, he points out, aren’t just benefiting the city’s thriving downtown, as some assert: 9 of the 15 projects he has endorsed are in neighborhoods like Bronzeville, North Avenue and Mitchell Street.
But some maintain that the city has not been aggressive enough in its efforts to make sure that new jobs are going to the people who need them most, Milwaukee residents who are currently unemployed, particularly African Americans. According to the UWM Center for Economic Development, the unemployment rate of black males in the city is 44 percent.
The Marquette Interchange, the new Manpower headquarters and the City Hall restoration projects are often cited as examples where contracting or hiring set-asides have been effectively implemented. But the business community generally abhors these agreements, fearing that investors will flee rather than agree.
Hundreds of people gathered at New Hope Baptist Church one evening in August to hear leaders of MICAH, which stands for Milwaukee Innercity Congregations Allied for Hope, call on the city to extend the hiring program to cover all developers of projects costing $500,000 or more as well as the businesses that occupy the new or renovated buildings.
Aldermen Ashanti Hamilton and Tony Zielinski attended the MICAH event and pledged their support, but the mayor has not. He acknowledges that “the challenge remains to make sure we are connecting jobs with the people in the city who need them” and says a study is underway of the existing efforts to see what is working and what needs to be improved.
Meanwhile, the mayor can take credit for closing a loophole that may have been used to circumvent the resident preference program. In 2005, the Milwaukee Building and Construction Trades Council, the union representing construction workers, charged that the city was evading the hiring program by engaging in a turnkey agreement with the developers of the project converting the Tower Automotive site into a Department of Public Works facility.
It was alleged that the city arranged for the property to be transferred to the developer so that the construction would not be covered by hiring preference agreements. The mayor put an end to the practice and the union dropped its lawsuit.
It remains to be seen who, if anyone, will challenge the mayor next year, but he will undoubtedly be asked to defend his record in job creation. He can point to some progress both substantive and symbolic, but the bottom line is that when it comes to jobs, a mayor’s work is never done. VS
