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When the Milwaukee Common Council overwhelmingly approved the $25 million TIF bond to entice Manpower, Inc. to move to downtown Milwaukee, they did the only thing they could, succumb to Mayor Tom Barrett's desperate attempt to save face. Still smarting from the startling defeat of his PabstCity proposal, Barrett gave away the store to Manpower and developer Gary Grunau in what can at best be described as "less than earnest" negotiations.
The deal calls for Manpower to occupy a new building with a lease substantially below market rates, a new parking structure with free parking, a $1.9 million refurbishment reserve, moving and incidental expenses, and a lease holdover allowance estimated as high as $600,000. Grunau also does well with a $1.7 million grant and a $3 million loan that is interest free for several years and below market for several more.
By cutting the deal privately and having Manpower testify it was a take-it-or-leave-it proposition, Barrett cleverly maneuvered aldermen into a corner, either approve the Manpower TIF or be labeled as "anti-Milwaukee." Alderman Bauman phrased it most succinctly: "We can either operate on high principle ... or basically swallow real hard and cave in ... I guess I'm here to cave in."
Another alderman was heard to remark that he never would allow himself to be put in such a position again with no latitude for Common Council input and negotiation. My guess is many other council members muttered similar expressions under their breath as they tallied their "ayes." They had to be asking, "What, exactly, is the point of having a Common Council?"
In fairness, despite the inflated price tag, the Manpower TIF is a net gain for the city and this column is not an argument against moving Manpower. But it is hardly the cause for celebration Barrett would have people believe.
The Manpower move brings no new jobs to the Milwaukee area that were not already there and represents a net gain of zero for the region. Moving a place of employment 4 miles south will not cause current or future employees to sell their homes and move to Milwaukee. What is gained by downtown merchants is lost by their counterparts in Glendale.
And as for adding glamour to Milwaukee by placing a Fortune 500 company downtown, here is a news flash for the mayor: Manpower was already in Milwaukee, for all intents and purposes. Even before the move, people working for and visiting Manpower flew into Milwaukee's Mitchell Field, took in entertainment at the Milwaukee Center, savored the sounds of the Milwaukee Symphony Orchestra, watched the Milwaukee Brewers, Bucks, Wave and so on.
There are no alarm bells that go off as you drive north of Capitol Drive and cross into Glendale. If the color of the streets sign didn't change, there would be no way to determine where Milwaukee ended and Glendale began. The fact is, no one considered Manpower a "Glendale" company in the first place.
From a taxpayer perspective, the Manpower project could be considered the "anti-TIF." In theory, a TIF is supposed to repay the investment bond from the incremental taxes generated and is designed to be tax neutral. In the case of Manpower, the city gave away so much the incremental taxes generated will only cover two-thirds of the cost of the project. The remaining third will be paid out of the $900,000 per year in incremental taxes from the Time Warner TIF, siphoning away money that was slated to start reducing property taxes this year.
Not only will taxpayers have to wait over two decades to realize any gain from the Manpower TIF, it will cost taxpayers millions in current tax relief that instead will be diverted to repay the Manpower bond.
Ultimately, the real problem with the Manpower TIF is that it embodies a losing strategy, bribing local companies to move across local tax lines. The Milwaukee business landscape suffers from gaping wounds that cannot be closed with a "feel good" Band-Aid like the Manpower move. Those wounds include high taxes, high crime and failing schools.
Contrast the Manpower project with the $85 million St. Mary's Hospital expansion in Mequon. The City of Mequon offers low taxes, low crime, and great schools. St. Mary's was induced to make a series of payments totaling $2.5 million, over and above any incremental taxes generated, for the right to expand in Mequon. There were no subsidies, no handouts -- just real and immediate tax relief. On the other hand, taxpayers in Milwaukee are asked to pay out millions to wealthy companies and forego millions in current tax relief for the promise of repayment in 20 years.
Bribery and political maneuvering are simply not sustainable strategies for growth. The best advice to Barrett is to stop taking junkets to China and put a full court press on businesses in Chicago, Minneapolis, and other cities to move to Milwaukee. Call Pfizer, Genentech, American Express and Microsoft and see what $25 million will buy.
Work toward opportunities that represent real growth, not just a game of intra-county "musical chairs." Most of all, get on with the hard work of solving the fundamental problems Milwaukee has in attracting and retaining good businesses with good jobs by lowering the taxes (and fees), taking a hard line against crime, and demanding that our children graduate.
Chasing whatever deals are tossed over the City Hall transom may give the impression of action, but it hardly constitutes the courageous leadership needed to make Milwaukee the "Mecca of the Midwest."
Chris Kliesmet is a spokesman for Citizens for Responsible Government.
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