Spend a little time with Milwaukee Department of City Development Commissioner Rocky Marcoux, and it won't take long to realize he has an encyclopedic knowledge of this city. And he's a talker, eager to share that knowledge and his passion for Milwaukee.
We sat down with Marcoux just moments after President Donald Trump held his first press conference following his inauguration to talk about development in Downtown Milwaukee, projects in the neighborhoods and the symbiotic relationship between those.
Despite what some may think, Marcoux told me, "the overwhelming majority of the work that the department is engaged in is not in the Downtown. It is in the neighborhoods."
Enjoy this Milwaukee Talks with DCD commish Rocky Marcoux.
OnMilwaukee: What are we looking at in terms of cities under a Donald Trump presidency?
Rocky Marcoux: I think there's a lot of concern with the change in administration as to what urban policy is going to be in this administration, and because there was so little discussion around policy during the election cycle, we're all left guessing where we're going to be. Significant amounts of federal money come to the cities ... The overwhelming majority of them have some tie-in to a city like Milwaukee.
We're very concerned that we've had no guidance whatsoever as to how those programs (such as public housing and Community Development Block Grants) are going to continue, whether they're going to continue, what form they're going to take. There's a lot of unknowns. There was a lot of discussion from both the candidates about the need for a major infrastructure investment, and that's something that seems to resonate in Congress. There doesn't seem to be anybody saying that we shouldn't be investing in infrastructure, and it's a great way to put people to work, and it's certainly something that the economy needs. The question now is what is that?
At the city level, has there been intense discussion since the election about this, or has it been more wait and see?
Yes, wait and see ... we'll find out more direction on where the president believes the country is going in terms of some of these programs. You don't know. In the case of so little detail other than "we're going to fix the central cities" ... He used some disparaging terminology, but what does that mean?
One man's fix is another man's ...
Yeah, exactly. I think we're concerned, and obviously this is where our Congressional delegation is going to have to, and will be, taking an active role, particularly Rep. (Gwen) Moore, representing the city. I know Sen. (Tammy) Baldwin, and the expectation with Sen. (Ron) Johnson and the balance of the delegation is to do the things that are right for Wisconsin, and ultimately its largest city. The mayor (recently) came out with an analysis of the fact that the city is a net contributor to the state's economy.
You beat me to the punch on that. How does this fit in with the news that we pay so much in income tax to the state of Wisconsin and we get so little back now in shared revenue?
The city has been, for many decades, the leader in Wisconsin in terms of economic activity. What the mayor did was to outline, in exact terms, what that means, how much money is coming from the city toward the state's revenue, and particularly the issue of shared revenue, which has been declining on an annual basis, and not just under this governor. It started before that, but it's been accelerated, and the dilemma we have is that's a source of income we have depended on traditionally, and a source of income that is being funded largely from the City of Milwaukee itself, its taxpayers, with income taxes, and sales taxes, and various other means from which the state derives some of its income.
I think too often the debate has been put in the context, "Well, here's what Madison is doing for us." I think what the mayor's trying to say is, "Well, here's what we're doing for Madison and the rest of the state."
I think that has long been the perception, that people outside of Milwaukee have thought about the programs in Milwaukee they have been funding, when really it looks a lot like it's the reverse.
We are the economic center, certainly of the city itself and the immediate Milwaukee County, but also the seven counties of southeastern Wisconsin. There's a tremendous amount of total volume of goods and services generated in the state that come through this area. Either they're made here, or they're processed here, or somehow change hands here. Obviously we have great wealth of jobs throughout the state.
I think for us it's getting the rest of the state to understand we're in this together. The Wisconsin idea is we've always been about being in this together. We've always had this dichotomy, if you will, of a rural economy as well as a urban economy, but it always blended well. We've had the best of both worlds, and we still can do that, but I think we have to have a more thoughtful analysis of where those funds are going to be spent to have the maximum impact on the state. A dollar spent here is generally going to return more than a dollar to the state, and I think that's what the mayor was getting at.
It's a good point, and hopefully folks will take a look at that and not just pan it and say, "Oh, that's Tom Barrett, and it's Milwaukee," and really say, "Hey, this is a thoughtful analysis. It bears reading it and trying to understand."
I think the rural/urban divide is really part of that bigger divide we saw during the election, where you have this polarization politically and people don't really want to understand each other or talk to each other.
It's because we've been talking at each other recently. They are very much dependent on the news media and how it reports what goes on in our city, as well as what is said on the floor of legislative sessions, what is said in opinion pieces that come out of legislative sessions and have obviously a large influence on the way people think about Milwaukee.
You're in an elevator with all those people outside Milwaukee. What's your elevator speech to them about what's going on in Milwaukee today?
You can't do it in an elevator speech, but what I would say would be, "Give me three hours, let's get in a bus, and let's go for a tour," and I would take them through all parts of our city. Certainly the vibrancy of what's happening Downtown, but the bigger story that is not told well – I think you do a good job of it, a very good job of it, OnMilwaukee – is the neighborhoods. There's such vibrancy and resiliency in our neighborhoods. That is not the story that gets out.
Yes, there are challenges. I'd like to show the challenges also in the context of the resiliency and the successes that are out there. That's the problem. Too many people have tried to put it into an elevator speech, on either side. Then you just talk at each other. The best way for people to understand is to actually experience it.
To come and see it.
To come and see it. I do this actually quite frequently; I bring people around. I do it with the news media, I do it with folks that are looking to invest in our city and I have done it with some legislators. I would hope and pray that many more would come, because I'm not selling ideology. I'm simply saying, "Here's what we're doing, and here are the challenges, and here's how we think we can move past that, and here's how we are helping ourselves."
We are investing millions and millions of dollars every single year in this city to attack some of these very incredibly challenging issues we have, but also to get folks to understand, too. Look at mental health issues as just one piece. It isn't about somebody's program; it's about what they're living and what they're not getting for what they're supposed to be getting.
The mayor came out one night, and Scott Walker was the county exec at the time.
They joined hands and said, "We're going to do something about this. Our commitment is to try and do over 1,100 units of affordable housing over a period of time." Now, we're just about over 500. We continue to work at that. The mayor, the city, we've had a real strong commitment to it. Our hope is that would be spread across Milwaukee County. To date, I think we have one development that's outside the City of Milwaukee, but therein lies a lot of the difficulty.
If you look at a lot of the folks that find themselves in these situations, they weren't all from Milwaukee. They're from many other places. Oftentimes, what happens with folks with mental illness is the family eventually gives up. Not because they're bad people, it's just that there's a level of frustration ...
They've reached the end of what they can do.
Exactly. Where do those folks end up? They end up in cities. It's not unique to Milwaukee, and it's not unique to Milwaukee as being the largest city in the state, it's just that's what happens to cities throughout the United States. Why? Because there are people here, agencies here, that are designed to help and care for them.
It becomes self-fulfilling, because if you have the agencies, you get people, and once you have more people, you have more agencies.
Exactly correct, and yet a lot of these efforts are being supported through the City, directly or indirectly. We are carrying a responsibility that has a financial commitment attached to it for folks that didn't start as our citizens, but now are our citizens, and we can't look the other way, and we won't. This mayor has not done that.
Obviously you look at the indicators on public health, there's a lot more that we have to do. Teenage pregnancy, the mayor made that a priority in terms of reducing teenage pregnancy, and we've had a dramatic reduction in that.
These are programs that the health department has put in, but working in collaboration. That's the word. Collaboration, with people who do this every day. The agencies, the community partners, the philanthropic folks, the United Way. You have to have everybody, and that's part of the message if I had folks on a tour is, "Here's how all this interacts."
Forget the headlines. Forget the budget for a minute. Here's where the money is being spent, how it's being spent, who's being helped, and what are the salutary impacts of that on not only the health of the city, but ultimately the health of the economy. Because if we can't recognize every individual's ability to contribute to the economy, and maximize that, we're losing a huge resource. Our human capital is our strength. That's our biggest resource is our human capital. We have many challenges in terms of developing that human capital right now.
I want to talk about neighborhoods and city-owned properties. Let's talk about Downtown first. There's a sense to a lot people that there's two Milwaukees: this development Downtown, and then the neighborhoods, some of which are thriving, some of which are struggling. But there's no way you look at Downtown and think of anything but it's booming.
Billions of dollars being invested.
What's getting us here right now? What's fueling what's going on?
It's a combination of factors. First of all, since the downturn, we've had a very healthy economy in terms of interest rates, or lack thereof. Obviously that's not going to last forever. It's interesting. We went into the downturn no different than the entire country, the entire world, and that's something editorially that the Obama administration is not given enough credit for, saving the economy. Not just our economy, but globally. The United States economy goes down the tubes, well, everything else does too.
So many cities had the same challenges. Not every city has recovered as Milwaukee has. I think that's what's lost on some folks who will say, "Well, this is happening in cities all over the United States." People are moving back to cities. That is unquestionably true, but not every city is sharing in the same renaissance that we have. Cleveland has had struggles.
The amount of vacant land in Milwaukee when we did this report in 2014 was 1.8%. Now, subsequently with the foreclosures and the amount of vacancies that have been produced by some of the demolition, we have grown to, I think, about 2.1%, but that's accounting for pretty much the worst of the downturn, because it takes a long time. The crash was in 2008-09, but it takes a long time to get to the bottom.
Everybody says, "Well, you've got to be like Detroit, OK?" I take issue because Detroit's a great American city, and it's a great American tragedy what's happened in that city. If you look at it, Detroit in 2014, 17.3% of their land mass was vacant. St. Louis, 20% of its land mass, vacant.
Chicago, 5% of its land mass. Buffalo, 10%. Baltimore, more akin to where we were, about 1.9 to 1.8. Minneapolis holding its own. Cleveland, 6%. These are big, big numbers, and I think there's another one here in population. Milwaukee, at the height of its population would have been the 1960 census. I think it was about 741,000, so 740,000 and change. We just went over 600,000, which I didn't see reported in too many places, OK?
It's not, "Good for you guys, you went over 600,000," but psychologically, that's a big piece.
So the difference between Milwaukee's height of population at 741,000, and 600,000 current, it's not a huge swing compared to other cities. Look at Detroit. Detroit, I think 1.8, 1.9 million. They probably hit that either in 1950 or '60, but it might have been '60.
The car industry's still booming at that point.
Oh, absolutely, and the great migration was playing out, but the point is they're at, what, (700,000) and change right now, from 1.8, 1.9? Everybody talks about Pittsburgh, and Pittsburgh has reinvented itself. It's a great city.
There's pictures of Pittsburgh in the 1940s and 1950s where they had the street lights on during the day because you just couldn't see in the smog. Pittsburgh launched very much ahead of its time in the '70s and '80s because the industrialization of that portion of the country hit there first with the steel mills, primarily but not exclusively. And they came up with the Monongahela Plan, which has been touted as a great success story, which it is, but what people don't talk about is Pittsburgh's half the population ... there's only 300,000 people in Pittsburgh right now. It was 600,000 at its height. Most of the land that was recaptured in the Mon Plan was put to uses other than manufacturing. A lot of it went to retail, some of it went to open spaces, some of it went to office and residential.
It feels like a bigger city than that.
It does, because it's a very compact city, and it's Downtown, so you see most of the buildings are clustered at the river's edge and just next to it, and you have this effect. You're surrounded by neighborhoods that are part of the city that are at an incline.
You feel enclosed.
The visual impact is exactly that, that the space is much smaller. Here, you can see and see and see.
Chicago, interestingly enough, if you look at the 2000 census compared to the 2010 decennial census, they lost 200,000 people in the city. Now, the reason that I say we're over 600,000, the community surveys are the annual Census Bureau's updates, if you will. They use a similar statistical analysis, but they're not as data rich, so they're not as accurate.
They're a little bit more theoretical.
Yes, they're based on trending, but they're based on some of the sound principles that go into the decennial census. The reason they're important is because they're also used for the disposition of federal funds. That's why there has to be an annualized report on these. In the community survey reports on Chicago, they've recovered about 20,000, so they're still down about 180,000. Most of those folks stayed in the region, so they migrated out of the city.
You have this metro population that is no longer city population, though.
Yeah. Chicago is a huge advantage for Milwaukee, and this includes Downtown Milwaukee and its neighborhoods, because of our proximity. We're only 90 miles away. This has been a big selling point for us, particularly with international companies as we look for direct foreign investment in the United States. Ingeteam is a great example of that in the Menomonee Valley.
Companies that we're trying to attract from the EU in particular ... We're not stealing companies from Europe when we go over there and have these meetings. They're trying to expand. The EU is saturated, particularly with wind and solar, because they had a much more forward-thinking program that was EU-wide.
The growth is here. They pretty much saturated those marketplaces. With the exception of maybe some of the offshore wind turbines they're experimenting with in the Netherlands, they're isn't a great potential for wind and solar in the EU because they've got so much of it there already. They were looking to expand. They had really two places that they could go for major expansion. One would be China, the other would be the United States. Given the issues with intellectual property rights, when you have joint ventures in China, generally it turns into Chinese companies in five years that all of a sudden have your technology.
(They) came here. They're outside of Bilbao. There are probably five to six round trips a day to Madrid out of O'Hare. If we're trying to go with a German company, you can get to Frankfurt, you can get to Berlin, you can get to any of the industrial areas of Germany with multiple round trips per day, and that's true for the whole EU. The fact that we are only 90 miles away from O'Hare is huge. It's an hour and 15 minutes, and we're on the right side of Chicago. If we were in Northern Indiana, it's a crap shoot getting to O'Hare, as you know on any given day based on traffic.
That's a competitive advantage. You talk about the amenities for Downtown, and that's one of the drivers, too. The Downtown amenities, the lake itself. A Minneapolis/St. Paul does not have a Lake Michigan. They have a Mississippi River, but that is not Lake Michigan.
Significant development has occurred along huge stretches of the Great Lakes. Look at Cleveland. Cleveland's inland; Cleveland's got industry at its lakefront. Now, it's got some beautiful places up the lakefront as well, but I think if you look ...
The city there doesn't even seem oriented toward the lake.
I feel like it faces inland.
You're exactly correct. That's the feeling you get because they don't embrace the lake in a way that this city embraces its lake, and certainly the folks that came long before us that worked with a lot of the good planning that went on. The plans are important.
We fought that lake freeway for one.
Can you imagine? Lincoln Memorial Drive as a freeway? This whole thing with the Lakefront Gateway, when we put this together, the idea, and the whole reason … (points to a map) Isn’t this something?
I love when you come east up Clybourn, it was completely unexpected the first time I did it, and the view up to Discovery World is just so incredible.
I'm very pleased that you stated it that way.
The 794 on-ramp threw me for a bit of a loop initially, but I'm used to it now.
Once you get used to it, you understand the power of it, what this has created. First of all, we had to get it done. You talk about an effort that was a joint effort with the state. The mayor was willing to say, "All right, we've got this very aggressive plan about rerouting some of this infrastructure at the lakefront," and it would require the state's assistance simply because we don't run the interstate system. The state does. We can't and won't put money into a federal program that's administered by the state. Our taxpayers are not going to go for that.
The mayor saw what could happen here in terms of the development potential, and we had discussions with our business community, with the governor, working with WisDOT. The governor saw it, because largely it was about economic development, and economic development shouldn't be a red issue, it shouldn't be a blue issue. It's a green issue. It's about the creation and transference of wealth within a community.
The mayor was willing to lead with $18 million toward our contribution, which has now climbed to about $24 million. Gov. Walker committed WisDOT to $16 million to move these ramps. What that has been able to do now is a complete new entrance into the Third Ward. I look at this almost like the Northwest Passage, even though that was a search for a water route.
In a sense, this is a water route, too.
Right, to water, but this whole northeast quadrant of the Third Ward was locked up. It was a box canyon. You couldn't get in or out of it except from the west or the south. This has completely opened it up.
You didn't want more traffic at this intersection where St. Paul met Van Buren.
No, but pulling the traffic in this way (further east, toward Harbor Drive and Chicago Street) is perfect. As you said, Clybourn. The only people that would have taken Clybourn prior to this whole effort would have been folks that took it by accident. They thought they were getting on that on ramp to South 94.
If you look at the Lakefront Gateway, what it has accomplished is a new access route to the lakefront, to the Third Ward. It has also given us a footprint for a building. We show that building as the site we are hoping Johnson Controls will build on. If they don't, for whatever reason, then we will start marketing that to another headquarters, but this has just been incredible, and you can't say enough about the impact of Northwestern Mutual. Their decision has really accelerated a lot of other development.
Then they doubled down.
They doubled down, and it was huge. This was a critical decision the mayor made in terms of backing the TID for Northwestern Mutual because if we're not able to (successfully negotiate a deal), they expand in Franklin.
All of a sudden, you've got the largest company in Downtown saying, by not building here, they don't have confidence in Downtown. That spreads with everybody else in the business community. But the exact opposite happens now because they make the case that they're going to invest Downtown, and then look at what everybody else is doing.
It has helped these projects get financing, it has moved new projects forward, and then the money this building is generating is also what we're using to pay for all these improvements.
When we did that TID, the way we set it up is we negotiated that they have a $54 million piece of it, but they get that back at 70% of the taxes they pay each year. The other 30% we're using to retire the debt that we incurred to do this.
That's how we paid for it, and we didn't go to the levy, what we say, to the taxable base.
I think that's what's lost on a lot of folks, as well, that the Downtown development has had some assistance from TIFs, but if we did not TIF the Northwestern Mutual building, you don't have the Northwestern Mutual building, which means you're down probably 3,000 employees over time, and that economic activity. It's huge. Where are all these workers coming from that are working in the Downtown hotel industry and the restaurant industry? Most of them are coming from the neighborhoods.
They are our residents, and they are living in near North Side and near South Side neighborhoods that are commutable to Downtown. This is one way that Downtown developments help to grow the neighborhoods by providing employment opportunities. The Northwestern Tower – and you mentioned it – they doubled down in the sense that they're putting that incredible residential tower in. Well, that tells you a couple things. The headquarters decision was driven on a number of levels, and directly at the CEO level obviously. The building of the real estate of the residential piece comes out of their investment group. That's a wholly separate operation. That's where, as you know, they take people's premiums and they invest them in a diversified portfolio to grow their income.
That says they think it's a great investment.
It says they think it's a dynamite investment.
It also says the people who can afford to live there want to live there.
Northwestern Mutual is not necessarily the first company that most people would think of in terms of real estate investment, but they have a massive real estate portfolio. It's part of a larger diverse portfolio for all of their investments, but it's a big part of it. They made this decision based on the market and the return that they would get in this market. This is a decision they based on the fact that the market will support this and they can gain a yield on this that is at least equal or superior to other investments they could have made in any other city in the United States.
One of the most impactful things about the story of the office tower itself is that it sent a message not just to the immediate Downtown and the region,which it did, and that was huge, and we're reaping the benefits of that, but it sent a message nationally about Milwaukee. This was deal of the week in the Wall Street Journal. The Wall Street Journal is the bible of the business community in many respects. When people looked at, "They're what? They're building a half-a-billion dollar tower where?" It just awoke people to the opportunities here. Subsequent to that, we have gotten a lot more developers from other cities that are now looking at investing here, including many from Chicago, but not exclusively.
One of the most exciting ones from Chicago would be Matt Garrison and his group that bought the post office. They set up a little bidding war for the post office. They bid it up. They actually paid above asking price. Why? They believe in this marketplace that's a transit-oriented development.
It's next to the Intermodal Station.
They're from Chicago, they understand transit. Unfortunately, we don't have that transit mentality here. We're building it. The streetcar is a big part of it. The power of mass transit is incredible if you harness it correctly. That post office site with air rights over the Amtrak line, that's the same line the streetcar will be in front of, it's the same line that services all of the ... not just the Chicago to Milwaukee Amtrak, but the entire nation you can get to from there. You could live in that building, you could go out and catch the streetcar to somewhere in the Downtown, you could get on the train to Chicago, get on the bus, you could walk, a bike station is there. You could have huge transit-oriented development there, office and residential.
Do you think people's mentality will change when (the streetcar and Bus Rapid Transit, or BRT) come in? A lot of people don't understand the streetcar and what it will do, and think it's not going to expand.
The mayor was pretty clear on this in his presentations. Some folks that oppose the streetcar say, "Well, this is just a Trojan horse, a stocking horse, if you will, for a much bigger system." It's like the mayor says, "Exactly," but it's not a Trojan horse. We're being very open about it.
This is the starter system, and it is going to expand. I think where people run with this in the wrong direction is they start looking at the mileage, the cost per mile of this. They start saying, "Well, it will take this amount to get to Wauwatosa, and this amount ..." because they're thinking, "You'll never be able to build this system." We're not talking about going to the suburbs with the streetcar. The streetcar is designed to serve the Downtown and the immediate north, south, east, and west neighborhoods. The larger connection to the region occurs with bus rapid transit.
This idea that's currently under study and hopefully comes to fruition of bringing down Wisconsin Avenue, uniting the Downtown with Wauwatosa's incredible cluster of offices and economic powerhouse of economic grounds. Now you're going to connect the two largest clusters of employment in southeastern Wisconsin by a form of transportation that people are going to use. I think once people start commuting on that, they're going to understand the beauty of bus rapid transit. The streetcar, they're just going to get floored by.
These are modern conveyances. Those that have disparaged this, calling it Tom's Trolley or whatever, those were pejoratives that were being used. They're trying to get people to think about an old streetcar clinking along.
You look in Europe, the business community much prefers to ride public transportation. For nothing else, they can actually do business while they're riding, no different than high-speed trains. We have Amtrak service eight round trips a day, I think, we're up to now in Hiawatha, and WisDOT talking to IDOT and Amtrak about the potential for maybe three more.
If we upgraded the cars on those service, for instance those Talgo cars that the state decided not to put into service, those are state-of-the-art. If there is a transportation package that comes out of the new administration, we certainly would look at how we could upgrade some of our infrastructure, not just on passenger rail, which is vitally important, but also freight rail. We have a lot of freight rail that we really need to start investing in, where the companies that own it have not invested in decades.
Manufacturing, say in the 30th Street corridor, which is built on the rail corridor. The neighborhood that has the most potential to provide the most new jobs over time, because this is the neighborhood that's seen the majority of the disinvestment – neighborhoods, plural, it's a big area on the North Side.
Stuff like this, though, the Milwaukee Road site in the valley, that's something that the Norquist administration started, but who executed it? We did. We moved it forward with the Menomonee Valley partners.
People think we're crazy, and if you look at Century City up north, the old A. O. Smith site, people looked at us and said, "How irresponsible could the city be to actually spend public money on this?" Our answer was, "Well, if we don't do it, who the hell's going to?"
Century City is 150 acres sitting in the middle of our city. Well, it was A. O. Smith at the time. We call it Century City, a new development for a new century. That was Willie Wade's idea, the local alderman at the time. To me, that's the appropriate use of government money, to go where the private sector either can't go or won't go.
We've already spent $35 million there, right? That's what it cost to clean up. ...
We're working with our Milwaukee United partnership, which is with the Greater Milwaukee Committee and the Urban League, Greater Milwaukee Foundation (on ideas for the Lakefront Gateway). It's this massive undertaking where we're taking all the neighborhoods to the near north, near west, and near south, and we're doing sessions, trying to achieve inclusive economic development, getting folks to understand and appreciate their role in the Downtown.
A lot of folks, there's this disconnect. Part of it is people don't take an ownership of Downtown if they live in the neighborhoods and they feel there's nothing in it for them, when in effect, this is everybody's front yard. I have always said as long as I have had this job that people should look at Downtown Milwaukee as an extension of their own neighborhood.
I think it's the front yard to the region, and in many respects to the state. It is so dynamic. There are so many things you can do here that don't cost a dime. You can come Downtown and spend a lot of money on a night out, certainly, but you can also come Downtown and spend nothing.
It's not true in a lot of places. Like New York City, it's expensive to leave the house.
Part of what we're trying to do with this Milwaukee United effort is harness the strength of the neighborhoods and include their ideas for what they want to see done in the Downtown from the public side, but also informing some of the decisions the corporates make, as well. That's why having the Greater Milwaukee Committee at the table is incredibly impactful, and the various business interests that are there.
Jeff Joerres, the former CEO of Manpower is on the team. Alex Molinaroli, who is CEO of Johnson Controls, he's actively engaged. Ralph Hollman, who now will have even more time because he's retiring from the Urban League, but he's not retiring; he's going to continue to put efforts in. You've got a lot of folks that, in the past, probably felt their opinions weren't counted by anyone now being asked, "What's your opinion, and how can you help us implement that?"
What we're trying to build with Milwaukee United is a consensus about how do we develop the Downtown and the neighborhoods, so that there is a share of wealth going in both directions. Part of that, too, is getting people to understand that there is true jobs generation going on Downtown that benefits directly the neighborhoods, because that's where most of the jobs are being sourced, the human capital is being sourced from the neighborhoods. There's also a direct benefit from taxation. Once you get folks to separate this concept that Downtown gets everything and all the taxes are going Downtown, no.
Downtown is, I think, 3.6% of the land area of the city of Milwaukee. The city of Milwaukee is 96.8 miles, 97 square miles. It's a fairly compact city; 3.1%, 3.6% – the figure I don't have exactly in my head, but it's under 4% – creates 18.6% of the taxes in the entire city. If we didn't have the economic drivers that we have Downtown, we would not be able to afford fire, police, sidewalks, streets, a lot of the things that cities have to do.
In the neighborhoods?
In the neighborhoods. It is not a parasitic relationship; it is a symbiotic relationship between Downtown and the neighborhoods. But if you don't have people that believe that, and also if you have people moving to Downtown who want to put a wall around Downtown because they fear the neighborhoods, we need to work with both of those mindsets and get them into one larger mindset that, just as we're struggling and trying to get the message that Milwaukee provides so much in support to the state of Wisconsin and visa versa, we need a strong state of Wisconsin to be powerful here in terms of an economic entity.
We've got to make sure our neighborhoods that immediately surround the Downtown in particular, but all of them in general, look at Downtown for the asset that it is. They will never look at Downtown as an asset if they feel their interests are not being represented in what's happening. That's what this Milwaukee United is trying to achieve. Ultimately, we see a grand civic space here that will reflect the diversity of our city, which will have spaces for everybody to feel they can come down, recreate, that this is their space. That's the goal of this. Great care is being taken in the design of this, and part of the design is getting feedback from the neighborhoods.
Now, how it will be funded? This will be largely, or mostly, almost entirely funded by the private sector. That's the goal. The city, we could afford to put a bridge across there, but it would be a utilitarian structure. It would not have the grace and beauty and incredible ... This needs to be done right. This needs to have the same type of thought that went into Discovery World, that went into the War Memorial way back when that Eero Saarinen designed, and reflects the beauty of this building, Northwestern Mutual, the Couture, Irgens Investment, whatever happens here on what we'll call for now the Johnson Controls site, and of course the powerhouse that Summerfest is because it brings so many visitors down here.
Aside from the amenity itself, which is powerful if you're a Milwaukeean, but as an economic driver, the number of people that come through the city each year because they're coming to Summerfest but then stick around and then rediscover us – including folks from Chicago that haven't been here in maybe 10, 15 years or longer, they come here for a Summerfest trip and they start looking around. They just keep walking. They amaze themselves. It's like, "What the heck happened here?"
Personally I feel like all of this is in some respects here because of the Milwaukee Art Museum.
I would agree, and the private sector built the art museum. The building was built by private funds, and I think that raised the level of design, and it raised the bar.
It told people, not just externally, that we could build something that was bold and unusual and cutting edge and beautiful. It changed everybody's view of what we were.
Oh, yeah. It got the mindset. What we're trying to do now is the same civic engagement that brought the art museum to bear, that type of investment. We're hoping to galvanize around this, but from a much larger group of people.
The folks that built the art museum, God bless them. We wouldn't have it if we didn't have a lot of folks that raised so much money, put their own personal wealth into this. We need a lot of that, but we also need the individual wealth of our human resources from the neighborhoods to tell us – the human capital to say, "This is what we need here for it to be ours. Here's what we want."
That's what we're trying to achieve as one of the goals with Milwaukee United is, what are some of these things that bring us together? This is one of them, this Lakefront Gateway. Then we can launch a funding campaign for it and get it built. This will be an incredible addition to the city. It happens to be at the lakefront, but it will be an addition for our city, and our region and our state, and we're very excited about what can be created there.
It's like dominoes, isn't it?
It is, because now you have this beautiful streetcar going through here that's public transportation. We have a two-story public transportation mecca (at The Couture), because you're going to have the bridges. There's a bridge across Lincoln Memorial Drive. There'll be a new bridge built across Michigan to connect to O'Donnell, and then there'll likely be a bridge between the Couture and this (new, still theoretical) building.
You're going to have this concourse where folks who use wheelchairs, the impact for the mobility-impaired community is absolutely huge. Trying to get across Lincoln Memorial Drive, even reconfigured, this is a lot more user-friendly, but it's still high traffic counts and high velocity. That's going to be a Godsend. Folks with strollers, just bringing kids back and forth. Bicycles. This is the northwest passage for bicycles.
Very excited about this, but equally excited about what's driving the investment. Back into the A. O. Smith story, about where we should spend our money, we spend our money here (in the Lakefront Gateway). We've done what we needed to do. We've helped to create the environment for success here. We negotiated a deal with the governor so we could get this done. Now, the private sector is doing what it does best: figuring out how to maximize this public infrastructure investment, and we are assisting but not necessarily driving this. We are a partner in this.
This is not your baby.
No, it belongs to Milwaukee United, which is the Greater Milwaukee Committee, the City of Milwaukee, the Urban League, and the Greater Milwaukee Foundation are the main drivers of this.
Back to the A. O. Smith site. A. O. Smith sold it to Tower. What killed the portion of A. O. Smith's business that happened at what is now Century City was essentially unibody construction. The whole industry moved to a different model on chassis and frames. A. O. Smith had to react. That was a big part of their business, and obviously became smaller and smaller until they eventually sold to Tower. Tower was a fairly large auto parts manufacturer in their own right. They wrung the last bit of profitability out of it. They made some small investments there, but they were small relative to the need. They kept it going for a number of years, and then eventually moved the last remaining piece of that operation to Juarez, Mexico. Then they went bankrupt.
Then there was this scar.
Exactly. Just as the Valley was a scar, just as there are other places in the corridor that are scars. You've got two choices. One is you can do nothing because the private sector created the mess, they should clean it up.
It's not going to happen, because you can't spend $37 million and put something there and expect to get profit out of it. It would take you 100 years. That's where it goes back to what I was saying. I think the appropriate role for government is to go wherever the private sector either won't go or can't go. Forget about A. O. Smith for a minute. They got out of it fairly easily. They sold their environment on a liability to Tower.
Tower goes bankrupt, so what are we going to chase some bankruptcy court? We didn't even own the property. The property had been sold by Tower. I said at the time, I didn't want it to become the largest junkyard in southeastern Wisconsin, because that's all that people were looking at it for, because those buildings were ridiculous in terms of the disrepair that they were in.
I want to talk briefly about city owned properties, too.
Unlike most other cities, we take foreclosed properties, generally after three years, but after one year if they've been abandoned. Most municipalities don't do that, so their foreclosures end up forever just sitting there with no ability to influence what happens, other than external ordinances that can impact.
I don't want people to construe what I'm saying as we're happy that we can take houses. We're not. We'd just as soon not take any houses, but if those houses are going to be foreclosed on, we're in a much better position to reposition those properties. We don't have to worry about the profit motive. Our motivation is how do we integrate that back into a stronger community, get it into the hands of a homeowner, or a responsible landlord. You look at a lot of cities that are creating – Detroit is one of them, Wayne County, I think, created a land bank, because they don't have the same ability that we do. They never had it. They don't enjoy it now.
Where we have been effective is in getting the foreclosures that come into our possession and then being able to sell them. Some of them we upgrade. Some of them we sell at a huge discount to somebody who is willing to bring it up to code. We have all kinds of programs, without even going into the finer grain. I think the larger view should be that if you are looking for a home, come to see the city. If you're looking to own, if you're trying to buy a property to renovate as a rental and you want to be a responsible landlord, we have so many properties we can offer you.
I've written about a bunch of beautiful historic properties that are for sale.
That's under our Housing Preservation Fund. The thought process there is, all right, we know that whoever is going to save this, we know that if we don't do a roof and a porch on it, this thing's going to disintegrate. We try to protect that exterior envelope. We also know we can't dump $150,000 to $200,000 into these houses, and then sell them $25,000. Our strategy there is mothball them (until) we find an urban pioneer who's willing to put in the amount of sweat equity and money that it's going to take to bring it back. That's the story of Concordia, of Cold Spring, of places on Sherman Boulevard, Washington Heights, a lot of places in the city where owners came in and just put everything into these homes, with stupendous results.
That's a great program, but it's not the core program. The core program is obviously moving as many of these (as possible). All right, this tracks our sales from 2007 through 2016. These are not all foreclosures in the city, but these are foreclosed properties that the city took for nonpayment of taxes, which is the majority. You look and you can see this is the beginning of the crisis. ...
We are the owner of last resort. This is not our core function. We had to step into this because the market place failed, because of the downturn and the crash.
So, again, this is where the government has to step in and do what the private market cannot.
If the government doesn't, no one else is going to, and the stuff's going to sit there. If you've got 97 square miles, which is what we have, we can't consider one acre to be non-developable. I don't mean parks and roads. I'm talking about land that has traditionally been used for something. We have hundreds of acres of land in the city that basically people have walked away from because they're contaminated. That was what happened in the Valley. That's what happened at A. O. Smith. In the last decade, we have acquired or worked with private developers to reclaim over 500 acres of land.
No other city can say that – no other city – because most cities will not buy contaminated land for the same reason John Norquist wouldn't do it. That's the private sector's problem. The government shouldn't be involved in there.
It really is all of our problems, isn't it? It's a health problem, it's an economic problem ...
It's everybody's problem. We can't annex property from our brothers and sisters in the suburbs, and we can't fill in Lake Michigan. The only way we can grow our economy is to use the land that we have. If hundreds of those acres are unusable because they're brownfields, then we've got to step in and do it. (In the Growing Prosperity report from 2014), one of the action items is to do 500 acres over the next decade, and to have at any give time at least 100 acres that are what we call shovel-ready.
For instance, Tower Automotive right now, we've got 84 acres that are shovel-ready. Somebody could buy the land tomorrow and put it in. Of course, we've invested $37 million. We're listing our land at $55,000 an acre. Do the math; we are not going to get our money back at $55,000 an acre. We get our money back through the jobs, through the economy, the neighborhood commercial corridors being revitalized, because now people have disposable incomes because they jobs, they can spend at a dry cleaner or a bakery or things that normally you're not going to be able to do if you don't have work.
You'll get property taxes.
Exactly right. It's a virtuous cycle. Rather than the cycle that we were in, in terms of everything unwinding, we are rebuilding, but we're rebuilding on the foundations of what is successful in the urban context.
Starting on the ones we've sold since '07, those properties paid, in 2016, $2.3 million in taxes; $119 million in taxable value. That's not even counting the 502 we sold in '16 because those taxes aren't due yet. That's a huge number. Look at it another way: The number of units that were sold is almost approaching 2,500. This is what we have left, right now, 1,349. That's what we have, and we have 2,662 vacant lots, so there's a total of 4,011 that we own.
Now if you were to throw in what the private sector owns, the number will climb, but we own most of the problems simply because if you're not willing to pay your taxes for three years – remember, this is not individuals most of the time, it's banks ...
Because they've been foreclosed.
If the bank is making a value decision that says, "It's not even worth paying the taxes on this thing," you can see what kind of shape some of these properties are in. We do, with our private sector partners, a great job. We're not selling them to people and saying, "Good luck."
Once the properties come to us – they come to the Department of City Development because we're the real estate owner of the city – we go out and inspect every one, and, of course, some of those properties come with tenants. Those are the ones we look at first.
We make an immediate decision. Can this property support these tenants on a life safety basis? If they can't, we get them out. If it can, with some work, we do it right away, new furnace, whatever. We keep those folks in place until the property's sold. They can also buy the house from us. There are opportunities to do that, but a lot of them aren't in that position.
We will then look at the condition of every property, working with the Department of Neighborhood Services. They provide a scope for us of what they feel (needs to be done). You've got to bring it up to code. Usually it's going to need a roof, porch, electrical, plumbing. The ones that get really bad are the ones that have been stripped already because then you're looking at total replacement. Then you have to make the decision: Does it make sense?
We'll look at one other factor before we go for demolition. What impact does that structure have on the built environment of that block in that neighborhood? We weigh that, even on one that's like, "Oh, it's going to take a lot," but if you're in portions around Washington Park, or just north in Bronzeville, some of these houses are old, but they're big, it goes back to the historic preservation. We know that if we remove it, we will never get a house of that stature built there. Just not going to happen. We're going to change the fabric of how that block looks and how that neighborhood looks, so take that into consideration.
Has that ever blocked demolition?
Oh, it absolutely has. A lot of them are on the fence. Do we spend $50,000 or no? If it adds to the character of the neighborhood, we try to keep it. This is just data, but data's powerful. Then look at housing development. Everybody wants to talk about Downtown housing, and I will tell you, that's another under-reported – everybody's reporting it anecdotally, but if you look at the figures, we are approaching the 10,000 unit now since Tom Barrett's been mayor.
Here's the other thing, this is this whole Downtown versus the neighborhoods. There's 6,080 affordable units that have been built since 2004 in the neighborhoods. That's a huge amount. We've done 14,068 single family or duplex homes since Tom Barrett's been mayor. Nobody would ever even dream that that would be possible. "Nobody builds anything in the City of Milwaukee." Add those 14,068 to this 6,080 ...
You're at 20,000 ...
Oh my God, but it's not all Downtown. This is all in the neighborhoods. I'll drive you by some of these developments. City-wide, 6,080; 648 of those are Downtown. Nobody would know. They say there's no affordable housing Downtown. There actually is, and it's growing. That's by design for us.
Outside of Downtown, 5,432. This is that whole supportive housing I was talking about. There's 514 completed, 184 are planned or under construction. This has been tougher.
For the people that are living in these, they arguably came out of hell. This is transformative for their lives. Most of them will never be part of our workforce initiatives because they're not going to be in the workforce, but they're a human being, and they should have the dignity of living as a human being. Particularly since a lot of what they were living in was being supported by funding that was not being appropriately monitored, so Section 8 vouchers going to landlords.
Then home rehab, this is a whole other area. There are so many different programs, but ultimately the key is, this is the number of loans since 2004, 1,251 that went towards the rehabilitation of over 2,000 units. This is all existing housing. That's almost $21 million in our loan portfolio. These occur in our targeted investment neighborhoods, or in the neighborhoods in general. These are where we try and make a concerted three-year effort to target resources.
We can bring a lot of that area up at once, which adds value. Add value, you add taxes, but the whole thing is, if you don't add, people immediately default to, "Oh, yeah, they just want more taxes." Well, no, actually, what we want is the value of the housing to rise so that we can get banks to loan again into those neighborhoods.
It's part of that re-wrapping what's unraveled ...
Yes, exactly correct. We have a house, and let's say we sell it for $5,000 and it needs $50,000 worth of work, that's a $55,000 investment. It's valued at $30,000. What bank is going to loan them the $50,000?
They're under water; ain't going to happen. What we do is we'll do the loan as a second (lender), so we'll bring a bank in to do – if the market value is $30,000, if they'll underwrite at 85% coverage ratios, we'll probably take a second for the balance.
We'll forgive a portion of that second if that homeowner stays in that property for probably 10 years. I think it's a 10th per year. Then the balance of it goes back into a revolving loan program. That's how we fund all these. Sometimes we get money from the council, from levy; that's rare. Sometimes we get it from CDBG (Community Development Block Grants), but our core program basically survives because we've made loans that people have paid back, and then we've reinvested those. A big part of it, too, is getting into homes where people are living to keep them in place.
We can't forgive taxes, because of the uniformity clause of the Wisconsin Constitution. Some cities and states have a provision where they freeze the property taxes for elderly and others. We can't do that. We've been looking at hybrids of how you might get at that. We've got a partial program on that, but it's not what some cities are doing, which basically says, "You don't pay any taxes," because they're trying to keep them in there. Because some people unfortunately have lost their houses that had no mortgages on them because they couldn't pay the taxes.
That's the ultimate insult. The ultimate tragedy.
We've got a lot of other programs, but I think the overwhelming majority of the work that the department is engaged in is not in the Downtown. It is in the neighborhoods.
We announced the Bon-Ton thing. That's a big deal, 750 jobs. We've worked on that for a number of years. That's huge, but in terms of staff resources – some of my time, some of Dan Casanova's time, a few city attorneys – while I'm doing this, the other 90 people in the department aren't working on this.
They're working in the neighborhoods.
The neighborhoods. I think that's what's lost sometimes, and, of course, if you start looking at the other departments, everything is exactly proportioned to the amount of square footage that neighborhoods take up.
Granted, some neighborhoods take a lot more effort, so they're probably concentrating on areas where there's more code compliance need. Garbage collection, that's uniform across the city. Snow plowing, uniform. Basically, all these other departments are doing no more Downtown than they're doing on a per-square-foot basis in the neighborhoods. If anything, some people might give me an argument on this, but you could actually say that Downtown saves because there's more people concentrated in a denser area because of high rises.
If you look at snow plowing, per person, those numbers are way down (Downtown). Trash collection over-four units is handled privately. You start throwing in all of those things, and start bringing the number of resources at other departments – how many orders are being written on Downtown buildings? Not that many. Some, but not the volume that you have (in neighborhoods). A lot of it is perception, and part of what I need to do is unwrap some of these perceptions.
Born in Brooklyn, N.Y., where he lived until he was 17, Bobby received his BA-Mass Communications from UWM in 1989 and has lived in Walker's Point, Bay View, Enderis Park, South Milwaukee and on the East Side.
He has published three non-fiction books in Italy – including one about an event in Milwaukee history, which was published in the U.S. in autumn 2010. Four more books, all about Milwaukee, have been published by The History Press.
With his most recent band, The Yell Leaders, Bobby released four LPs and had a songs featured in episodes of TV's "Party of Five" and "Dawson's Creek," and films in Japan, South America and the U.S. The Yell Leaders were named the best unsigned band in their region by VH-1 as part of its Rock Across America 1998 Tour. Most recently, the band contributed tracks to a UK vinyl/CD tribute to the Redskins and collaborated on a track with Italian novelist Enrico Remmert.
He's produced three installments of the "OMCD" series of local music compilations for OnMilwaukee.com and in 2007 produced a CD of Italian music and poetry.
In 2005, he was awarded the City of Asti's (Italy) Journalism Prize for his work focusing on that area. He has also won awards from the Milwaukee Press Club.
He can be heard weekly on 88Nine Radio Milwaukee talking about his "Urban Spelunking" series of stories.