The corner of West Capitol Drive and North 27th Street in Milwaukee was once so vital to the American defense industry that the A.O. Smith factory housed a warren of tunnels and bomb shelters during World War II to protect workers and their production from an attack by the Luftwaffe. Now, that intersection is the Century City business park, the “catalytic” site for the revival of an almost 5-mile* long industrial corridor extending from the city’s northern boundary to the Menomonee Valley.
The $20 million, high tech office building anchoring the site was completed last year. But for now, it sits vacant while the city searches for a tenant that meets its employment standard of 15 to 22 jobs per acre while also launching the city’s efforts to revive the impoverished and largely African American north side. “We’re looking for a higher standard,” explains Kein Burton, the city’s developer for the site. “We put more than $40 million in.”
In the 1970s, when manufacturers and unions were still strong, African Americans in Milwaukee had one of the highest median incomes and the lowest poverty rates of any African American community in the country. That has since been reversed.
The city’s task, says City Development Commissioner, Rocky Marcoux, is to create an “environment in which jobs can be created.” What the city offers is a kind of starter kit of detailed development plans, real estate deals, and tax incentives.
The master plans distribute the authority over development into the hands of city agencies, private developers and the non-profit middlemen who connect those who have the resources with those who need them. The problem, explains Robert Smith, Associate Vice Chancellor for Global Inclusion and Engagement at University of Wisconsin-Milwaukee, is that an existing structure of white supremacy transfers from one endeavor to the next. “You have the massive institution [manufacturing] that played its role and left,” says Smith. The institution that steps in to fix the problem left behind fits into the narrative of the previous institution and perpetuates its racism. The reform process is slow and things often get worse, Smith explains, “because of the larger question of who has the resources.” The intended recipients of those resources can end up being pawns, he adds, used by the more powerful institutions to allocate and reallocate resources.
The starting point for much of that resource allocation is Tax Incremental Financing (TIF) which spurs growth by enabling a city to borrow against future tax revenues. A TIF district, or TID, is drawn along somewhat artificial boundaries and its assessed value is frozen. The city floats bonds against the post-development value of the district and uses the money to fund up front development costs. Revenue from the frozen, pre-development value, goes to the city’s coffers, and any revenue collected from the post-development assessment is used to retire the debt. Because it’s complicated and requires legislative approval, TIF funding is a good measure of the city’s development priorities.
Milwaukee reports its TIF spending on the city’s website. A total investment of $530 million is divided between 85 TIDs, though not all are listed on the website. According to the listing, about $250 million has been invested in downtown projects (residential and mixed-use developments) and commercial sites like the new Northwestern Mutual tower and the controversial Milwaukee Bucks arena. Almost $72 million—about 13 percent of the total—is invested in industrial projects, and just 5 percent is committed to projects in the Corridor, prompting criticism from that community that they’re not being equally served by the city’s development efforts. In an email, Marc Levine, Director of the Center for Economic Development at UW-Milwaukee calls the 30th Street Corridor project “commendable,” but also notes the disparity in TIF funding for the Corridor compared to the downtown projects. “It’s odd that the city gives more subsidies to the development in supposedly hot, allegedly market-favored zones,” he writes.
But former alderman Willie Wade, who left the City Council to become Vice President of Community Relations at Employ Milwaukee, a city job training agency, believes that the downtown development is going to create jobs for his former constituency, just not in manufacturing. He signed the deals when he was in city government. Now he’s at Employ Milwaukee because, “I see the opportunities are coming. So, now, I’ve got to go back to the community and make sure they’re ready.” All development, he says, is about money. People who have it, give it, and then want it back, he explains. “That’s by design. That’s official. Someone’s gaining.”
Demographics have hurt the suburban service industry, he says. There aren’t enough people interested in service industry jobs, and the failure to support affordable housing or transportation infrastructure means suburban businesses can’t find workers. Downtown development provides jobs that are close to home for city residents, and some—like those at the Bucks arena—are going to pay more as well.
That demographic model applies to manufacturing as well, according to Rocky Marcoux. The needs of the suburban manufacturers’ workforce are going to drive them back into the city where the workers are. Mike Rosen, Economics Professor and President of the AFT Local 212, disagrees. People have been making the demographic argument since the 1990s, he says, but the suburban manufacturers, aren’t coming back. “The city is poor and getting poorer, and 40 percent of it is impoverished,” says Rosen. “That’s the problem with the real estate strategy. Developers make money but it doesn’t change anything.”
Gary Wentzel, who left a suburban manufacturing company to take over the Corridor manufacturer, Capitol Stampings, doesn’t see that trend either. “We’re experiencing workforce issues, too,” he says. He can find some workers, but has to train others in specific fields like tool and die making, where he currently has two apprentices. His suburban counterparts are hiring skilled workers from the city who have their own cars.
The TIF funding also supports workforce development because it can be tied to hiring requirements, like Milwaukee's Residential Preference Program (RPP), which requires that 40 percent of workers on projects with public subsidies must be certified as unemployed or underemployed. A 2016 study by Milwaukee’s Public Policy Forum found that the most common jobs for RPP workers were as laborers and truck drivers. The low skill level required and the temporary nature of construction work means that workers don’t always get long-term gains from RPP jobs. They’re often touted as ways to qualify for the federal apprenticeship programs run by the state union chapters. But Paul Blackman, former President of A.O. Smith’s Steelworkers local (and the first African American to hold that position) says that the skilled apprenticeship programs don’t have seniority lists, so apprentices don’t know when they’re going to be called in to work. Work is erratic and even when they do get called in, they end up sweeping or fetching coffee instead of working towards journeyman status. The Public Policy Forum report finds that African Americans and other minorities are underrepresented in the program compared to whites, and their completion rate has been as low as 20 percent. Total minority participation in Wisconsin’s skilled trade unions, says Blackman, is 8 percent—exactly the same rate that it was is 1911.
“Breaking down segregation in labor markets and in economic development generally will require regional solutions (transportation, land use, coordinated subsidy policies), writes Marc Levine. “And make no mistake: tackling segregation is the key.” Chicago’s Metropolitan Planning Council is already convinced of this and has partnered with the Urban Institute to research the cost of segregation to the larger city. In an article for Next City, Marisa Novara, a Council researcher, said that she wanted to quantify the cost of ongoing segregation in the city. “It became really clear to me that there was this conception that our status quo was cost neutral,” she says. Despite its perennial presence at the top of almost every one of the country’s least desirable Top 10 lists, Milwaukee is not making a similar effort. In love with its manufacturing past, the city seems trapped in a 19th century narrative—enterprising white guys with good ideas and some capital are going to create the next big thing that will put everyone back to work.
State Representative David Bowen was part of the planning process for the Corridor when he was a Milwaukee County Supervisor. His 10th District includes both the impoverished black neighborhoods in the northern tip of the Corridor and the white, lakefront suburbs that hold some of the state’s greatest wealth. There’s interest in the Corridor, he says, but not enough. “Nobody wants to go all in on the 30th Street Corridor.”
Correction: A previous version of this article misstated the size of the Century City business park and one of its cross streets.