MORE Hurdles Proposed for Development Projects within Milwaukee
In what appears to be a rush to significantly alter development efforts within the City of Milwaukee, Alderman Ashanti Hamilton is proposing additional requirements for development projects that accept more than $1 million in Tax Incremental Financing. The changes include requirements that developers pay construction workers prevailing wages, hire a significantly higher percentage of City of Milwaukee residents, and hire a higher percentage of emerging businesses as subcontractors. Although it sounds great to have developers pay higher rates to construction workers, and have them hire more City of Milwaukee residents, as with most things it brings with it unintended consequences.
It is also possible that projects that in the past would have requested slightly more than $1 million in TIF financing may scale the entire project back so as to avoid these requirements. Although this may seem drastic, developers surely will look for ways to avoid the additional cost. Developers might not cut additional units or floors, but they might drop or scale back public areas of the project such as pocket parks, riverwalks , and other amenities. This clearly could have an impact on both the quality of the development and the number of people employed during construction.
Finally, it is also likely that fewer projects will come forward, due simply to the new regulations and additional hurdles. It’s not clear if the PERC requirements in the Park East have been a deterrent to development there or if the problem lies in lot sizes and multiple levels of government, but it is clear that nothing has been developed in the county-owned portions of the Park East.
If implemented these new regulations could lead to less development, less employment and less tax base creation. So it seems that these unintended consequences may do more harm than good.