by Michael D. Holloway
We all have our special interests; that is human nature. But our special interests will be of no interest if we do not address the city’s largest interest — continued development and investment momentum in the City of Milwaukee. The ordinance commonly referred to as the Community Benefits Agreement (CBA), approved by the Common Council’s Steering and Rules Committee January 8 and sent back to the committee by the Council on January 21, is attempting to fix what isn’t broken — development in the city. In general summary, the Community Benefits ordinance states that prevailing wages must be paid to contractors working within the Park East development site. This is the equivalent of the federal Davis-Bacon Act. Mandating prevailing wages, as in Davis-Bacon, will increase the cost of development in the Park East Corridor by eight to 14%. Using 10% for discussion, that’s more than $1 million on a $10 million development. What I find disconcerting about the CBA is: 1. It was distributed to the Steering and Rules Committee anywhere from one day to one hour before the meeting, according to minutes from the hearing. 2. The fiscal impact to the TIF has not been evaluated. 3. This Substitute is being approved at a time when we have no acting Department of City Development (DCD) Commissioner, no Deputy Commissioner, two of the brightest members of the Milwaukee Economic Development Corporation (housed in DCD) have departed, and one of the persons most responsible for the city’s revitalization just left town for Denver. 4. We have a Mayor who is guaranteed a term until April, at which time he may or may not remain mayor, and we have a full council that is up for election. 5. This resolution is a “feel good” proposition and certainly a feel good phrase that fails to acknowledge that jobs are being created by development and jobs will continue to be created with development. Jobs for Milwaukee, not some outlying suburb. Remember, there is not a mandate or requirement that developers build in the City of Milwaukee. In addition to paying prevailing wages, a developer will be required to provide 20% of the units developed as affordable housing. In lieu of this set aside a developer may make a contribution to an affordable housing development trust fund. In Francis Ford Coppola’s classic, The Godfather, they had another name for a payment of this nature. An affordability study of housing in the City of Milwaukee determined that 86% of all rental units in the city are affordable to families with incomes of 60% of the Milwaukee County median income or less. If only the city median income is used then 73% of the city’s housing units are considered affordable. The city has affordable housing. I know this is not an easy decision for many council members, especially when one of the aldermen is phrasing it as simply as, “Either you are for or against community benefits.” That is a disingenuous statement. If I didn’t have to be careful about political correctness I might suggest that question is like asking, “Do you still beat your husband?” The CBA ordinance, in all likelihood, will stop the development momentum the city has enjoyed these past four years. These developments create jobs, short and long-term. They create training opportunities. There is a “spillover” effect to area neighborhoods. These jobs may not pay what some special interests want, but they pay a living wage and provide something to build on. This is not the time to make a decision that will affect the future of development in Milwaukee. Decisions like this ought not be made in a vacuum but rather after April elections when we know who will lead us (Mayor and Council) for the next four years. Michael D. Holloway is a Riverwest resident and President of Homebuyer Associates, an Exclusive Buyer Agent firm which works for residential homebuyers. He also spent 12 years working in housing and housing rehabilitation at DCD, including over 100 low income housing units.
Michael D. Holloway is a Riverwest resident and President of Homebuyer Associates, an Exclusive Buyer Agent firm which works for residential homebuyers. He also spent 12 years working in housing and housing rehabilitation at DCD, including over 100 low income housing units.
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The Community Benefits Agreement Tries to Fix What Isn’t Broken
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by Michael D. Holloway
We all have our special interests; that is human nature. But our special interests will be of no interest if we do not address the city’s largest interest — continued development and investment momentum in the City of Milwaukee. The ordinance commonly referred to as the Community Benefits Agreement (CBA), approved by the Common Council’s Steering and Rules Committee January 8 and sent back to the committee by the Council on January 21, is attempting to fix what isn’t broken — development in the city. In general summary, the Community Benefits ordinance states that prevailing wages must be paid to contractors working within the Park East development site. This is the equivalent of the federal Davis-Bacon Act. Mandating prevailing wages, as in Davis-Bacon, will increase the cost of development in the Park East Corridor by eight to 14%. Using 10% for discussion, that’s more than $1 million on a $10 million development. What I find disconcerting about the CBA is: 1. It was distributed to the Steering and Rules Committee anywhere from one day to one hour before the meeting, according to minutes from the hearing. 2. The fiscal impact to the TIF has not been evaluated. 3. This Substitute is being approved at a time when we have no acting Department of City Development (DCD) Commissioner, no Deputy Commissioner, two of the brightest members of the Milwaukee Economic Development Corporation (housed in DCD) have departed, and one of the persons most responsible for the city’s revitalization just left town for Denver. 4. We have a Mayor who is guaranteed a term until April, at which time he may or may not remain mayor, and we have a full council that is up for election. 5. This resolution is a “feel good” proposition and certainly a feel good phrase that fails to acknowledge that jobs are being created by development and jobs will continue to be created with development. Jobs for Milwaukee, not some outlying suburb. Remember, there is not a mandate or requirement that developers build in the City of Milwaukee. In addition to paying prevailing wages, a developer will be required to provide 20% of the units developed as affordable housing. In lieu of this set aside a developer may make a contribution to an affordable housing development trust fund. In Francis Ford Coppola’s classic, The Godfather, they had another name for a payment of this nature. An affordability study of housing in the City of Milwaukee determined that 86% of all rental units in the city are affordable to families with incomes of 60% of the Milwaukee County median income or less. If only the city median income is used then 73% of the city’s housing units are considered affordable. The city has affordable housing. I know this is not an easy decision for many council members, especially when one of the aldermen is phrasing it as simply as, “Either you are for or against community benefits.” That is a disingenuous statement. If I didn’t have to be careful about political correctness I might suggest that question is like asking, “Do you still beat your husband?” The CBA ordinance, in all likelihood, will stop the development momentum the city has enjoyed these past four years. These developments create jobs, short and long-term. They create training opportunities. There is a “spillover” effect to area neighborhoods. These jobs may not pay what some special interests want, but they pay a living wage and provide something to build on. This is not the time to make a decision that will affect the future of development in Milwaukee. Decisions like this ought not be made in a vacuum but rather after April elections when we know who will lead us (Mayor and Council) for the next four years. Michael D. Holloway is a Riverwest resident and President of Homebuyer Associates, an Exclusive Buyer Agent firm which works for residential homebuyers. He also spent 12 years working in housing and housing rehabilitation at DCD, including over 100 low income housing units.
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