MillerCoors leases headquarters space in Milwaukee region

One way of looking at MillerCoors' announcement of its new headquarters location is that the company decided to stay in the Milwaukee region after all. Their new headquarters in the West Loop area of downtown Chicago would place them exactly 1 hour and 4 minutes by high-speed rail from downtown Milwaukee. This is currently less time than it takes to drive from downtown Milwaukee to the M7 region's border.

It seems that MillerCoors executives were cognizant of the potential for a high-speed link when they considered possible Chicago locations. It was reported that one of the key reasons for MillerCoors' choice of 250 S. Wacker was that it is was close to public transportation. No doubt, the public transportation they speak of is the proximity to Union Station which is exactly one block west of the new MillerCoors headquarters. Amtrak and Metra both stop at Union Station.

MillerCoors executives might have also become aware of the Amtrak re-authorization bill that President Bush signed into law on Oct. 15th, 2008, which raises the specter of more federal funding for high-speed rail in the Midwest. Assuming the authorization is fully funded in upcoming appropriations bills, Milwaukee could have a high-speed rail connection into downtown Chicago within five years, placing the two city centers 1 hour and 4 minutes apart. This improvement would shave 25 minutes off current Amtrak service and is considerably faster than the average drive-time of 1 hour and 30 minutes between the two cities.

The reduction in Miller's corporate presence will leave a void in Milwaukee. Though not entirely gone, their philanthropic support and the tertiary economic activity that Miller brought to the community will be missed. We should not, however, write off all secondary economic activity from the MillerCoors relocation. Milwaukee, with its cheap housing, amenity-rich downtown and a pending high-speed rail link, would be positioned to gain more than its fair share of investment over the next few years. The Wisconsin Department of Transportation estimates the development potential that occurs as a result of high-speed rail at between $152-$227 million in increased downtown development. In tough budget times, such an increase in tax base would be welcomed by Milwaukee governments.

A high-speed rail link could also foster housing and employment market equilibrium in the Chicago-Milwaukee mega-region. That's a fancy way of saying that Chicagoans would find it easier to migrate north to take advantage of Milwaukee's cheaper housing and Milwaukeeans would find it easier to migrate south to find more lucrative and more plentiful job opportunities. Recent Public Policy Forum research finds that this migration is already taking place with nearly $400 million in net personal income being claimed by new M7 residents who had lived in the Chicago region the previous year. Conceivably, rail improvements linking the two regions would only serve to encourage more Chicago households to make the move north.

In the end, high-speed rail is far from a panacea. The start-up costs are steep and the operation of such service will likely require ongoing public investments. In fact, an M7 economic renaissance may not even require a high-speed train, but it surely will require the recognition that Chicago is our partner in growing a livable mega-region with a diversity of housing, transportation and employment options.

Rail or no rail, Chicago and Milwaukee are cities that are increasingly seen as two parts of one whole. MillerCoors executives understand this. Do we?

Postscript: If the topic of regional transportation improvements piques your interest, sign up to attend the Public Policy Forum's Luncheon on December 4th as we explore the prospect for regional transit. Click here for more details.

Windfall federal housing funds headed to Milwaukee

What happens when a large pot of one-time federal funding becomes available to local governments? In the case of Milwaukee County and emergency flood aid, it was the unfortunate incident outside the Coggs Human Services Center. In the case of New Orleans and federal disaster assistance, it was a slow rebuilding effort which is only now beginning to improve.

Now, the City of Milwaukee enters the fray. In the coming weeks, the City will find out just how much of the $3.97 billion allocation it stands to receive from the recent passage of H.R. 3221 - The Housing and Economic Recovery Act of 2008. The funds are to be used for the redevelopment of abandoned and foreclosed homes.

Although the allocation formula has not yet been set by the U.S. Department of Housing and Urban Development (HUD), the Enterprise Community Partners estimates that Wisconsin stands to gain $57.2 million under this provision. The City of Milwaukee can expect to receive a significant portion of that allocation.

One key stipulation on the expenditure of these funds is that "Community Development Block Grant (CDBG) regulations will govern the administration of the funds." Of course, CDBG regulations are notoriously flexible. In an ideal situation, this would be just fine because localities would be given the flexibility to craft an appropriate response to local housing conditions. However, this one-time allocation brings up a host of questions as the City of Milwaukee decides how it is going to spend its allocation:

• Capacity - The legislation stipulates that state and local governments must use the funds within 18 months after receipt of the allocation from HUD. This begs the question: can the city come up with an effective and accountable housing program in just a few months time? If not, there is a risk of the funds not being spent or being susceptible to misuse.
• Parochialism - Will the planning process for these funds resemble the "battle" that surrounds annual CDBG appropriations in municipalities and counties throughout the state? Or, will community-based organizations join forces with the city to jointly craft a policy that is both focused and accountable? Will outside technical assistance be needed to craft an effective policy?
• Equity - How will this money get to the right people? How can one tell who is suffering from the crisis and who is just suffering - is there a difference? Should the program focus on rehabilitation or demolition? Should the program focus on the renovation of abandoned properties for rental or homeownership? Can policy be crafted that will not be perceived as a bailout for the banks which own many of the foreclosed properties?
  
• Accountability - What will be the metrics for success? This may have to be a local requirement because CDBG regulations require minimal accountability.
• Leveraging - Can these one-time program funds be leveraged with other public and private dollars to maximize impact? Can the funds be used to capitalize a revolving loan pool to fund the redevelopment of foreclosed homes? Can the funds be matched with dollars from area banks (after all, banks will partially benefit from this infusion of resources)?
  

Public policy often works best when it is implemented to prevent fires, not to put them out. The intent of this piece of legislation is laudable, but the implementation of the Title III funds will be challenging, to say the least. A collaborative and depoliticized process to plan for the expenditure of the tens of millions of CDBG dollars will be a critical factor in crafting a sound policy to deal with the fallout from the foreclosure crisis.

Financing Milwaukee's innovation pipeline

The announcement that the University of Wisconsin-Milwaukee Research Foundation inked a potentially lucrative licensing deal with a local drug manufacturer is a prime example of the important role that public dollars play in spurring innovation and economic growth in the Milwaukee region. In this case, the initial public investment came in the form of a $1.2 million 5-year federal grant from the National Institutes of Health (NIH) to fund research by UWM Professor James Cook. The investment paid off in the discovery of a new drug compound to treat alcoholism.

This breakthrough is welcome news not only for its potential health benefit, but also for the economy of the Milwaukee region and the state of Wisconsin, which has historically done a poor job in translating NIH grants to economic gains. A national study released this week confirms an above-average level of NIH dollars flowing into Wisconsin but a below-average return on those dollars in the form of new business activity.

Universities aren't alone in their use of public dollars to spur innovation. Local governments are beginning to delve into the innovation investment game. One recent example is the City of Milwaukee's approval of a $225,000 forgivable loan to C&D Technologies to develop a new line of lightweight lithium-ion batteries. These city funds would mix with federal dollars to finance the development of this new product line for military use.

Other cities are also creating funds that directly invest in innovative private companies. New York City and its partners have created the $2 million NYC Seed fund which will invest up to $200,000 in nascent NYC-based tech companies to aid them in the development of new ideas and products. Click here for information on other cities that have created similar funds to boost innovation and entrepreneurship.

In the past, the public sector's role in economic development has largely been to set the stage for growth (solid infrastructure, educated workforce) and then get the heck out of the way (streamlined regulation). This mindset is slowly changing. Today, public dollars are used directly to fuel innovation and economic development.

As with any investment, there is risk. However, with adequate due diligence and strategic focus, the investment of public dollars into research and development projects can be a calculated risk with a potentially large payoff to metropolitan economies.

Milwaukee County's Transit Crisis

Coverage of the Public Policy Forum's latest report, "Milwaukee County's Transit Crisis: How did we get here and what do we do now?" appeared in Sunday's Milwaukee Journal Sentinel. Unfortunately, the headline was somewhat misleading. It stated that the Forum is calling for a wheel tax, which we are NOT. This was simply one of a number of options that we identified in the report as possibly helping to solve the financial crisis faced by MCTS if policymakers wish to solve it with a new revenue source. That said, the article did a good job summarizing the Forum's research, which found that policymakers face a stark choice:

They can accept a transit system that is a shell of its former self – one that contains no freeway flyer service, few night and weekend options, and sparse service west of 76th Street, south of Oklahoma Avenue or north of Silver Spring Drive – or they can consider one or more selections from a difficult menu of policy options that could either delay the day of reckoning once again, or perhaps prevent it altogether.

Key findings from the Public Policy Forum's analysis of the Milwaukee County Transit System funding crisis:

• Barring an infusion of new funds from the federal government, the need for federal funds in the system’s operating budget soon will outstrip the amount of funds available by well over $15 million annually. Funding projections developed by the Forum – and reviewed for reasonableness by current and former Milwaukee County Transit System (MCTS) officials – show potential overall shortfalls of $1.6 million in 2009, $18.3 million in 2010, $23.7 million in 2011 and $21.1 million in 2012.


• Since 2001, nearly $40 million of a $44 million reserve of federal capital funds has been allocated by the county to fill holes in MCTS’ operating budget and avoid significant service cuts. At the same time, bus purchases have been deferred to allow for the expenditure of those reserves on operations. The elimination of the reserve and the looming need to replace at least 150 buses sets up an ominous fiscal crisis.


• MCTS not only faces serious funding issues pertaining to fixed route service, but it also must address a growing funding gap in paratransit services for persons with disabilities due to increased demand for those services.


• MCTS’ fiscal challenge has been greatly exacerbated by a new governmental accounting rule that requires the system to budget annually for its long-term liability for retiree health care benefits. This has added approximately $8.5 million per year to MCTS’ operating budget.


• MCTS buses carried 10.3 million fewer riders in 2007 than they carried just seven years earlier, ranking it first among 13 peer transit systems in lost riders from 2000 to 2006. Only once in the last seven years did MCTS see an increase in ridership (a 1.9% increase between 2004 and 2005). The uptick corresponded to the only year that fixed-route bus service was increased.


• The cost effectiveness of MCTS buses was best among peer systems in 2006 based on data from the Wisconsin Department of Transportation and the Federal Transit Administration, indicating that further cost savings due to efficiency improvements may be limited.

Lake Michigan wind could power Milwaukee

As recently reported in the Daily Reporter, the Washington Post, and Jim Rowen's The Political Environment blog - the Public Service Commission of Wisconsin has initiated a study "assessing the wind power generation potential of the Great Lakes."

Offshore wind farms are not the stuff of science fiction. In fact, I see them twice a year when I fly into Copenhagen, Denmark to visit my girlfriend's family. From the air they look like tiny white specks set against a giant blue canvass. From land, they look much the same. For those who dislike the idea of huge turbines obstructing their lake views, the fact that from the shore such turbines are nearly invisible might be a relief.

A group by the name of Radial Wind plans to erect 390 turbines in the water's of Lake Michigan. The group's website, freshly posted in 2008, claims that "Radial Wind Farm will be the largest supply of offshore wind energy in the world" generating 1,950 megawatts of electricity for customers in Wisconsin, Illinois, Indiana, and Michigan (for context, Wisconsin's largest wind farm currently under development measures will produce 145 megawatts). The Radial Wind Farm would be located in the Mid-Lake Plateau region of Lake Michigan - a former island in the middle of Lake Michigan which lies directly east of Milwaukee at "at depths less than 90 meters and extends upward to minimum depths of 40-60 meters at three localities." Again, according to the website, the nearest turbine to Wisconsin's coast would be approximately 18 miles east of Milwaukee. That would be far enough away to be invisible to onlookers from the Milwaukee shore. It should be noted that the Radial Wind project has yet to be formally proposed or publicly vetted.

One inherent advantage to turbine siting on lakes versus on land is the fact that smooth lake surfaces fuel steady winds. A 2004 report entitled, "Lake Michigan Offshore Wind Resource Assessment," which was partially funded by Wisconsin's Focus on Energy program, found the Mid-Lake Plateau region to be an "excellent offshore wind resource" with steady 20mph winds and the energy potential of the site "in excess of 10,000 megawatts."

Tapping Lake Michigan's wind energy could be one way for the Milwaukee region to bolster its economic competitiveness. With "green" quickly replacing "silicon" as the holy-grail of economic development, such a vast well of untapped clean energy would seem to be a priceless commodity in a low-carbon future. The role that this could play in recruiting industry and business could be substantial if businesses are able to offset carbon emissions with carbon-credits from their consumption of clean energy derived from Milwaukee wind. Of course, the flip-side of this argument is that clean energy could lure "dirty" industries not unlike the 2003 decision by Alcoa to construct a $1.1 billion aluminum smelter in pristine, carbon-free, Iceland. Beyond recruitment, the construction of such a large offshore wind farm could spur job-creation in Wisconsin's nascent wind manufacturing industry (Tower Tech Systems, Magnetek, Cooper Power Systems, and American Superconductor).

The technology to erect wind turbines in the relatively deep waters of Lake Michigan's Mid-Lake Plateau has yet to arrive. However, developers seem to believe that this is both a money-making and environmentally friendly proposition. Will Wisconsin citizens and government regulators agree?
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Update: Since the posting of this blog, an article covering the above story has appeared on the front page of the Milwaukee Journal Sentinel.

UWM a good fit for downtown?

A new advocacy group, UWM Downtown, has been formed to encourage the University of Wisconsin - Milwaukee to expand its proposed engineering campus in downtown Milwaukee instead of the university's favored suburban location on County grounds in neighboring Wauwatosa. The story was covered in last Wednesday's Milwaukee Journal Sentinel.

Downtown advocates cite student convenience, plenty of vacant commercial space to absorb spin-off companies, the development of a possible engineering cluster with Marquette and MSOE, and the idea that an "urban campus" would be more environmentally sustainable. UWM leadership proposes the Tosa option in large measure because of the potential research synergies that could be achieved with the nearby Medical College, Froedtert Hospital and GE Healthcare.

Both sides agree that university expansion equals economic expansion. However, new research from the W.E. Upjohn Institute for Employment Research is a bit less sanguine. The research does conclude that "if the costs of inducing an expansion in higher education or medical services is sufficiently low, an economic development strategy that targets these industrial sectors may offer net benefits." In other words, keep an eye on costs because the economic benefits of university development are real but the margins are tight.

The cost of developing the Tosa site vs. a site in downtown Milwaukee is a crucial factor that has yet to receive much scrutiny. The UWM Downtown group suggests that the following sites be considered for the new engineering campus:

• The Brewery near Marquette and I-43 – 750,000 SF of potential space.
  
• MacArthur Square in front of the County Courthouse – 750,000-1,000,000 SF of space could be made available.
• Park East – 14 acres west of the river and 12 acres east of the river to be developed.
  
• Haymarket area just north of the Park East corridor– 45 acres of vacant land or deteriorated/obsolete buildings for development.
  
• Schlitz Park on the river just north of downtown – Approximately 200,000 SF of space available.
• Central Business District – 2,200,000 SF of vacant space available.

Costing out specific redevelopment options is a critical next step in UWM Downtown's pursuit of an urban engineering campus. After all, urban redevelopment is notoriously difficult to do on the cheap, as land assembly, land clean-up and demolition costs eat into project returns and complicated deals. The burden of proof will be on UWM Downtown and its backers to prove otherwise.

This is not to say that the development of the Tosa site will be any less costly. UWM Downtown cites potential resident opposition to university expansion, tricky site development issues, infrastructure needs and access issues. On the issue of access, do we need to consider the potential cost of additional transit infrastructure (express buses, bus rapid transit, light rail) to efficiently move students between the east side and Wauwatosa?

The Tosa site does have one distinct advantage: it's already off the tax rolls. To the extent that university expansion downtown would happen on tax-rolled land is an importatnt issue for the City of Milwaukee to consider if it were to welcome any downtown university expansion. As Mayor Barrett himself points out, approximately one-third of the city's tax base is currently tax-exempt. This has, no doubt, limited the city's ability to raise revenue to pay for needed services. Any cost increases then get shifted on to homeowners and other taxable commercial and manufacturing property.

Researchers have not been shy about studying the relationship between cities and universities ("town and gown"). New research from the Lincoln Land Institute reviews the fiscal impact of large nonprofit landowners on the finances of the City of Pittsburgh - a peer city which also has tax exempt property as one-third of its tax base. Researchers note that "the concentration of tax-exempt properties in the urban core has had a measurable impact on the tax base and overall fiscal capacity of the City of Pittsburgh" and that "any conclusions here must focus on alternative sources of funds for city revenue." Other town and gown research from the non-partisan Pennsylvania Economy League (PEL) - a peer group of the Public Policy Forum - also warns of fiscal strain of educational facilities on their host community.

None of this is to say that the idea of an urban research campus isn't an intriguing idea. However, the suggestion here is that the UWM downtown advocates may need to start making their case based on real cost advantages. Additionally, the possible negative revenue effects of a downtown campus on local government finances (service costs exceeding revenue growth) need to be addressed. Annual cash payments to the City of Milwaukee could be an option but would also simultaneously increase the cost of any proposed downtown project.

With political and financial resources aligned for UWM expansion in Tosa, the new UWM Downtown group faces daunting odds in convincing leadership to change course away from Tosa and instead direct expansion efforts into Milwaukee's downtown core. But more important than the project's political odds, would the expansion of a large tax-exempt institution make financial sense for two of our regions largest institutions: UWM and the City of Milwaukee? Research would suggest that while a downtown research campus could spawn regional economic success, it could also create local fiscal distress.

NAFTA bashing does not jibe with Milwaukee's high-tech reality

NAFTA bashing is the new blood sport on the presidential campaign trail. As both major democratic candidates were quick to discover in the Wisconsin and Ohio primaries, their populist message of blaming the upper Midwest's economic woes on free-trade deals certainly made for catchy sound bites.

But, is NAFTA really to blame for the Midwest's slow job and income growth?

And, are things really that bad? To the contrary, some suggest that it could be (gasp!) the Rust-Belt which could lead us out of our country's recession based on the strength of its manufacturing exports. This week, the Federal Reserve Bank of Chicago threw additional cold water on the fiery NAFTA rhetoric. The Chicago Fed highlighted new data from the International Trade Administration which reported that the four-county Milwaukee region exported $6.8 billion worth of goods in 2006, up 14% from 2005. Fed contributor Bill Testa concluded that "the outlook for Midwest exports remains strong."

A double digit growth in exports is a good thing for Milwaukee. Well, actually, it's a very good thing for Milwaukee. The 14% increase in exported goods is a critical economic indicator that should intrigue those with even a passing interest in economic development policy. After all, sustainable economic development can only be realized if you sell more "stuff" outside of your region so as to bring new dollars into your region. Without new money coming in, your region's "secondary" economy (housing, retail, etc.) will slowly starve.

Thankfully, we are not starving in Milwaukee. In fact, with the weakening dollar and explosive growth in developing countries, the stars are aligned for continued manufacturing export growth in our region. Perhaps this is one reason why the Milwaukee region was recently highlighted in a Chicago Tribune article as one of only 4 US regions (in a survey of 25 large metro areas) where housing prices didn't fall in 2007. This could be an example of our region's foreign export growth propping up local housing demand. After all, Milwaukee's exports made up 37.3% of all the exports out of Wisconsin - this despite the region only comprising 27% of the state's population. In the midst of such export strength, it may be no wonder that Milwaukee is experiencing relative price stability in a treacherous housing market.

To the extent that NAFTA has accelerated Milwaukee's investment into the research and development of new "high-end" manufactured products, the trade deal may deserve a bit of praise. Milwaukee 7 representative Jim Paetsch recently stated, "Some places believe that manufacturing is dead or dying. We don't." The quote was pulled from an article at Forbes.com which highlighted new research that showed how Milwaukee's manufacturing base was acting as an important platform for high-tech innovation and patent generation. Perhaps this means that southeastern Wisconsin has finally figured out that competing on cost for low-end of manufacturing jobs is a fruitless "race to the bottom."

But while we pat ourselves on the back, let's not forget that NAFTA has contributed to the upheaval of thousands of households in Milwaukee which were, for decades, firmly rooted in family-supporting, high-wage manufacturing jobs. Many of these low-end production jobs have left Milwaukee for China, Mexico and other countries that are pulling in massive amounts of foreign capital investment based solely on their lower cost structure. With these jobs gone, the workers that remain need an effective and seamless workforce development system which trains capable workers for high-end manufacturing and service jobs in our region. This is going to take money - a cooperative effort with public, corporate and foundation financial support.

Corporate profits also need to be plugged back into research and development to ensure new patent and product development. To encourage such investment, there is a need to align local and state government economic development programs with our new economic reality. The Wisconsin Tech Council hits on several such changes to state policy in this 2003 report. The City of Milwaukee is also getting in on the innovation game with their recent investment into the development of a new line of lithium-ion batteries at C&D Technologies in the Riverwest neighborhood.

The 20th century's economic development paradigm was jobs. The 21st century economic development paradigm is innovation. Like it or not, NAFTA has played a role in ushering this new economic reality - which Milwaukee seems to be embracing.

Dreaming of Milwaukee's next big thing

My move back to Wisconsin from California in 2001 was largely fueled by my desire to live in Milwaukee - a community that simultaneously embraced the construction of the daring Calatrava addition to the Milwaukee Art Museum and the destruction of the divisive Park East freeway spur. It seemed to me that such forward thinking, risk-taking endeavors surely revealed a city on the brink of an urban renaissance. I moved to a city on its way up.

Now, in 2008, I'm left wondering what will be Milwaukee's next big thing. Of course, I'm under no illusion that it will be a quick fix to our deeply entrenched economic and social woes. But, I do harbor a hopefulness that bold new ideas can fuel a resurgence of civic pride and national attention that can only help our great city.

Bold ideas. We need more of them to sustainably grow the economies of the upper Midwest. In an age where the Midwest's cities have been left to address the gaps left by decades of federal indifference, urban economic development will require bold ideas from visionary public sector leaders at the local level.

What ideas qualify as such? One example is the idea hatched by the City of Atlanta to use tax increment financing (TIF) to fund its ambitious BeltLine project. From the Forum's recent Research Brief:

The City of Atlanta has long been known for its dynamic business environment and explosive growth. Unfortunately, it is also known for sprawl, air pollution, lack of greenspace and traffic congestion. In an effort to address these “quality of life” issues and reassert the region’s competitive position, the City of Atlanta recently approved the creation of a TIF for its “BeltLine” project. The BeltLine is currently the largest redevelopment project in the United States and will encompass 8% of the city’s total land area and generate $1.7 billion dollars in revenue. The project will transform a ring of blighted and underutilized land encircling the city to multi-use trails, parks, transit improvements, affordable workforce housing and Atlanta Public Schools projects. In what promises to be the most ambitious use of TIF in the country, after 25 years the BeltLine TIF will contain over $20 billion of increment value—larger than the sum total of all TIF districts in the state of Wisconsin. Atlanta’s Beltline TIF is not only big, it’s also innovative and is continually cited as a model for transparency and accountability.

Let's be clear, a developer didn't walk up to Atlanta's city hall one afternoon and request a $1.7 billion TIF. The BeltLine is a public sector led project at its core.

In Milwaukee, TIF has been used to fund bold public-sector driven initiatives like the construction of the downtown riverwalk, the demolition of the Park East freeway, the clean-up of the Menomonee Valley, and the revitalized 30th St. Industrial Corridor. What other opportunities might there be?

I can think of two:

• A modern transit system—Use TIF to finance station and land development costs associated with transit upgrades (express buses, KRM, high-speed rail)
• Slow employment and income growth—Use TIF to finance growth in emerging regional industry clusters (financial services, water technology, advanced manufacturing) as identified in the M7 Strategic Framework.

The partnership between TIF and bold new ideas may be the currency of 21st century Milwaukee. What are your ideas?

Just released: Tax Increment Financing in Southeastern Wisconsin

The following is from the Public Policy Forum’s new report, "Tax Increment Financing in Southeastern Wisconsin." Research was funded by Briggs & Stratton, Ehlers and Associates, Irgens Development Partners, and Reinhart Boerner Van Deuren S.C.

Tax Increment Financing (TIF) is southeastern Wisconsin’s largest economic development tool. With 176 TIF districts and $8.4 billion in property value, the collective tax base devoted to TIF districts in our region ranks behind only the city of Milwaukee among our region’s largest tax bases.

Despite the impressive scale of TIF in the seven-county area, the tool is used less here than in the rest of the state. Whether that’s due to reluctance or lack of need is unclear. What is clear is that if the region decides that it can become more aggressive with TIF, it has ample capacity to do that. It’s critical that we know where this capacity exists and how best TIF can be deployed to shape the region’s future growth. After all, economic development needs finance.

The use of TIF is growing in our region. There were 56 municipalities using it in southeastern Wisconsin in 2007 - up from 51 in 2000. Today, a quarter of the 56 municipalities are “TIF’d out” - communities that can no longer approve new TIF districts because the value in their existing districts exceeds the state limit.

TIF use in the city of Milwaukee has increased in tandem with the rest of the state and region despite the successful retirement of three large TIF districts in 2006. While the city’s use of the tool continues to trail regional and state averages, Milwaukee has increased TIF expenditures under Mayor Tom Barrett’s administration.

As TIF use increases in Wisconsin, so too will the public’s scrutiny of this popular development tool. Municipalities in our region could benefit from implementing the following “best practices” aimed at ensuring the strategic, accountable, and efficient use of TIF:

• Use TIF to build community partnerships - More can be done to educate and engage the public during the TIF approval process.


• Establish developer need, not want - Strong due diligence of incoming TIF proposals is needed to ensure their efficient use.


• Align TIF use with community goals - Municipalities should use TIF to fulfill goals within an economic development plan.


• Monitor and report TIF performance - The accomplishments (and failures) of the region’s 174 TIF districts should be readily available to the public.


• Use TIF to compete globally - TIF could play a central role in strengthening the region’s competitive position.

To succeed in the new global economy, our region must utilize every tool at its disposal. In Wisconsin, TIF emerges as one of the most important instruments that can grow our economy and improve our quality of life.

Much work is needed to ensure the strategic, accountable, and efficient use of TIF in our region, but if we can learn to better use TIF can we also learn to use it more often?

What if Milwuakee went to bat for Chicago?

Here's a twist. Milwaukee lobbying for investment in Chicago. A recent Sun-Times editorial, suggests that leaders in large metro areas (like Milwaukee and Chicago) should band together and lobby the federal government for more investment to spur metro economic growth.

The editorial states that Chicago's train yards would be a good place to start:

"At the heart of the nation and on the shores of Lake Michigan, Chicago's location makes it the third largest intermodal port in the world, after Hong Kong and Singapore. Almost $1 trillion of our nation's freight moves through this region annually, and freight volumes are expected to increase 80 percent or so in the next 20 years. Yet trains often must slow to a crawl through northeastern Illinois and northwestern Indiana because technological and physical updates to tracks and rail yards are long overdue. Businesses are losing money due to delayed deliveries, and drivers are experiencing more traffic jams on local roads. The federal government's response has been to spread surface transportation funding around like peanut butter, rather than investing strategically in major national rail hubs, ports and gateways, like Chicago."

What would be the rationale for politicians in Southeastern Wisconsin to go to bat for federal investment in Chicago's train yards? Simply put - the more goods that Chicago imports, the more goods that southeastern Wisconsin can distribute.

The Milwaukee region is a natural hub for distribution and logistics. In fact, the M7 has identified "distribution" as a regional export driver - with the region currently playing host to 10,386 distribution jobs paying an average wage of $50,815. Not bad.

Our region is emerging as a distribution hub because of ample land and lower costs. Just look at yesterday's news that Illinois-based Coleman Cable, will expand into a 502,000 sq. ft. building and bring with them 75 jobs for their warehousing and distribution functions. The company states:

"...the Pleasant Prairie location will allow the company to consolidate distribution facilities and reduce costs, while simultaneously...providing first-in-class logistics, delivery and customer service."

The Coleman Cable expansion news follows the announcement by Uline Inc. that it will move its headquarters, R&D and distribution functions from Illinois to Wisconsin by 2010 - adding 1000 jobs to the Milwaukee region.

Despite our market advantages and recent "wins" in the distribution game, can we really expect our region's leaders to expend their political capital south of the Wisconsin border?

It's possible. The most recent precedent for Wisconsin going to bat for Illinois is Milwaukee's recent embrace of Chicago's 2016 Olympic bid. On the state level, Wisconsin also recently joined an effort last year to win a federally funded, state-of-the-art coal gasification plant for southern Illinois.

In the end, cooperative lobbying efforts could translate a Chicago gain into Milwaukee growth.

Minnesota in recession, Wisconsin not....yet.

The Packers lost a big game last weekend. While the loss was painful, at least the Pack were in the playoffs and not sitting at home like the 2nd place Minnesota Vikings. I actually felt bad writing that last comment because you hate to kick a state when it's down. I'm referring to the news in which a Minnesota state economist declared his state to be in recession. Ouch.

Needless to say, this declaration was not fully embraced by Minnesota Gov. Tim Pawlenty who described the economist as someone who “tends to err a little bit on the pessimistic side.”

Regardless, the economist cited a significant increase in Minnesota's unemployment rate to 4.9% in December from 4.4% a month earlier and a net loss of 350 jobs over the last 12 months.

If we use the Minnesota example as a benchmark to define "recession," we can see that, for now, Wisconsin seems to have avoided the recession bug. Last week, the Wisconsin Department of Workforce Development reported an unemployment rate of 4.6% which was less than the previous month's 4.8% and less than the current national unemployment rate of 4.8%. In tandem with a lower unemployment, the state benefited from a net addition of 21,700 jobs over the last 12 months.

In short, 2007 was good to Wisconsin. A researcher in this week's Milwaukee Journal Sentinel agrees and states that "overall, Wisconsin is doing better economically than most Midwestern states."

This is not to say that Wisconsin doesn't have it's share of challenges. The article points out that Wisconsin's job mix is still predominantly low-pay (Competitive Wisconsin recently announced plans to address this issue) and that the state should expect job losses in construction and manufacturing due to the housing downturn. Additionally, state tax receipts have slowed and spending cuts may be needed.

How long will labor market data stay positive in Wisconsin? Is it just a matter of time before Wisconsin sinks into recession like our neighbor to the West? We can't be sure of what our future holds but for this very moment let's enjoy our relative economic health and a Packers season to remember.

CEOs for cities

News coverage and commentary on last week's Public Policy Forum Viewpoint Luncheon, "Global wooing," has been abundant. The event featured a lively and candid conversation on Milwaukee's global competitiveness with five prominent area CEOs (from right to left in photo): Rick Armbrust, The Oilgear Co.; Jeff Joerres, Manpower Inc.; Paul Purcell, Robert W. Baird & Co. Inc.; John Shiely, Briggs & Stratton Corp.; and Tim Sullivan, Bucyrus International Inc. On the far left is Chuck Harvey, vice president, diversity and public affairs, Johnson Controls, Inc., who moderated the discussion.

If you missed any of the coverage, here it is:

News
The Business Journal Serving Greater Milwaukee
"Leaders say area still lags in attracting talent"
Milwaukee Journal Sentinel
"Business leaders want to warm city's climate"

Commentary
Steve Jagler, executive editor of Small Business Times
"Our own worst enemy"
John Torinus, chairman of Serigraph Inc.
"Leadership is key element to building business, city"
Patrick McIlheran, Milwaukee Journal Sentinel columnist
"The price of ignoring the price"
Milwaukee Mayor Tom Barrett
"Mayor responds to criticisms from CEOs"
Milwaukee Journal Sentinel
"Editorial: On talk and action"

Letters to the Editor
Jack H. Werner
"Smart business execs don't need pandering"
Richard Armbrust, Jeff Joerres, Paul Purcell, John Shiely, Tim Sullivan
"Commitment to region is solid"

What else is there left to say? Plenty, I'm sure.

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Update: More commentary today, January 18. The conversation continues...

The Business Journal Serving Greater Milwaukee
Editorial: "Listen to leaders' calls"
Steve Jagler, executive editor of Small Business Times
"Standing up against what's wrong in Milwaukee"

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Update: Three op-ed articles in Sunday's Milwaukee Journal Sentinel Crossroads section....

Jeff Browne, "Milwaukee can compete if it's willing to change"
James J. Casey Jr., "Lesson's from the Asian Tiger"
Michael Rosen, "Milwaukee Business Leaders seem to want a return to the 19th century"

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Update: An article and a blog posted today, January 25. And the beat goes on...

The Business Journal Serving Greater Milwaukee, "M7 impact questioned"
Charlie Sykes, "Who's the enemy?"

The other Iowa story

Mike Huckabee and Barack Obama were the big story last week in Iowa.

However, the big story from the last five years in Iowa has been its resilient economy. In fact, no state in the upper Midwest is adding jobs as fast as Iowa. That's right, Iowa. While the Midwest as a whole grew its overall employment 0.2% in the first half of 2007, Iowa's employment grew 1.2%. True, Iowa is no Utah when it comes to job growth but their rate of growth is impressive next to Wisconsin's meager 0.2% advance.

According to a recent Mid-year jobs report released by the Chicago Federal Reserve Bank...

Iowa reported above a 1% growth in total employment partly due to its strong professional and financial industries. For the first half of the year, Iowa also experienced greater than 1% growth in its construction, information, education and health, and leisure and hospitality industries. Similar to Indiana, Iowa recorded a significant increase in construction jobs, even as home building slowed.

Additionally, Iowa's high-paying FIRE industry (Finance, Insurance, and Real Estate) comprises 6.7% of total employment as compared to more modest 5.9% slice for the Midwest. In fact, Iowa's "insurance advantage" is attracting investment from Wisconsin's very own CUNA Mutual - CUNA Mutual recently completed a significant corporate merger in Iowa.

In short, not only is Iowa adding jobs, but it's adding the right kind of jobs - the high paying kind.

How did Iowa turn its economic ship around? At the risk of sounding like a broken record here at the Forum, let me suggest to you that it started with a plan. That plan - Iowa 2010, The New Face of Iowa - was released in 2000 and set eight goals to grow Iowa's economy. The goals focused state support on the life sciences, information technology, advanced manufacturing and their emerging insurance cluster - all high-wage and high-tech industries. Each of the eight goals had a list of specific action items, identified leadership roles and measurable indicators to monitor goal progress.

Wisconsin has no such detailed economic development plan (not unlike the vast majority of municipalities and counties in the Badger State). Previous plans from the state, like Grow Wisconsin are really "plans" in name only as they lack a timetable, measurable progress indicators, responsible parties or even a unified budget. Without these critical elements the typical Grow Wisconsin "plan" tends to read more like a political position paper or wish-list than an actual plan. Perhaps Gov. Doyle's upcoming third installment of Grow Wisconsin will be more detailed.

To be sure, governments don't grow economies, businesses do. In Iowa, state government pointed the way with an actionable and accountable 10-year plan and business growth followed. At the start of the new year, this may be as good a model as any to implement in Wisconsin.

Update: Gov. Doyle released a new package of economic development initiatives today.

Water solution in Brown County. Really?

Recently, the Business Journal ran an article highlighting a just-completed 65-mile, $80 million pipeline that delivers fresh Lake Michigan water to the suburbs of Brown County from Manitowoc, WI. In the article, the Business Journal states that "what happened in Brown County could serve as a prototype for southeast Wisconsin," implying that the Milwaukee region could learn something from Brown County in addressing the water demand in its suburban communities.

Based on previous reporting in the Milwaukee Journal Sentinel (JS), this implication is puzzling. The JS article reports that instead of utilizing the existing City of Green Bay pipeline, an entirely separate pipeline had to be constructed because negotiations broke down between the city and its suburbs.

How can the construction of redundant infrastructure - two parallel pipelines stretching from Lake Michigan to Brown County) - be good public policy?

In addition to the apparent fiscal inefficiencies of the Manitowoc/Brown County pipeline, this project may have also cost the Green Bay region a chance at building regional trust, goodwill and cooperation. So state the major players in the pipeline negotiations...

From the suburbs: "Think of the old days, when people fought over water out West. Those days are still here. It just boggles the mind that you can't get people to cooperate on something as basic as water."

From the city: "This was a failure of business, a failure of government, a failure of the media. A failure by everybody. We're taking $20 million to $100 million out of the Brown County economy . . . for no other reason than we can't get along."

From the suburbs: "We all went into this with the idea that we had a regional problem and we were going to come out of this with a regional solution. Unfortunately, it didn't work out that way."

From the city: "It (the pipeline) puts a dollar figure on urban-suburban hate."

These statements from those close to the negotiations question whether this $80 expenditure should be hailed as a prototype for regional cooperation.

It looks as though the Milwaukee Common Council may have been following this debate closely, as they have decided, instead, to negotiate with their thirsty suburban neighbors. Here's hoping these negotiations don't also end up placing a dollar figure on urban-suburban hate. I'll drink to that.

The "tax-hell" obsession

"Wisconsin is a tax hell." We've had it drilled into our heads that Wisconsin's tax climate is amongst the worst in the country. Furthermore, we are told by some experts that this burdensome tax environment is responsible for slowing job and population growth in our state.

An opinion piece in this week's Wall Street Journal adds kindling to the tax-hell fires by highlighting a report which links "high-tax" states (New York, Wisconsin, Ohio, etc.) to their comparatively slower rates of population, job and income growth.

Over the past decade, the 10 states with the highest taxes and spending, and the most intrusive regulations, have half the population and job growth, and one-third slower growth in incomes, than the 10 most economically free states. In 2006 alone 1,500 people each day moved to the states with the highest economic competitiveness from the states with the lowest competitiveness.

A recent study by the Public Policy Forum confirms the migration of households from Midwestern metro areas (Milwaukee, Minneapolis, Chicago) to warmer climates (Florida, Arizona). In our report, we speculate that the Milwaukee region's sustained losses of households are driven chiefly by retiree's migrating to retirement hot-spots like Phoenix and Palm Beach.

So, who's right? Are households leaving our state to seek shelter from Wisconsin's snow or Wisconsin's taxes?

Unfortunately, we don't know the motivations of those that leave the Midwest for points south. Absent perfect data, we can only infer as to who these people are and why they choose to leave the snowy environs of the upper Midwest and Northeast.

We know people are leaving, we just don't know why.

If we don't exactly know why people are leaving, why the obsession with taxes? The reason is that it fits a particular ideology.

Like it or not, political ideology plays a central role in the crafting of economic development policy. Those on the left push for "investment" while those on the right advocate for "cost reduction" as the proper economic stimulus. Truth is, you need both. Economic development needs investment in land, labor and capital while simultaneously keeping a watchful eye on costs.

In a recent article in the Rocky Mountain News, the Forum suggests that investment into our economic infrastructure as key to our ability to expand and attract employers and their workers. We do not arrive at this conclusion lightly.

A survey of 177 manufacturing employers in the Milwaukee region conducted for the M7 in 2006 had respondents rate the average importance of 14 specific "business climate" elements. The following were the top seven most import factors according to area manufacturers:

1. Workforce quality
   
2. Workforce availability
   
3. Health care expenses
   
4. K-12 education
   
5. Technical education
   
6. State taxes
   
7. Universities/colleges
   

Note that five of the top seven elements concern investment, while two are associated with costs.

Just cutting taxes won't automatically result in a thriving community. Instead, both Wisconsin and Milwaukee need to pull up their collective sleeves and do the hard work to control costs (taxes, fees, health care, regulation) while simultaneously making critical investments in our economy (workforce development, brownfield cleanup, K-12 education, quality early childhood education, the development of a sustainable transportation system, university and corporate R&D, etc.).

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See "Doyle bets on innovation: He will push tax, regulation changes to spur economic growth" in today's Journal Sentinel which picks up on the theme of coupling cost reductions measures with specific investments to spur economic growth.

Transit referendum could have steep hill to climb

As you may have heard, the Wisconsin Alliance of Cities has recently crafted legislation that would allow, by referendum vote only, the creation of regional transit authorities with taxing powers. However, a recent article in the Daily Reporter announces that some transit advocates would rather it be left up to elected leaders in each region to implement taxing authority for transit.

The Milwaukee Journal-Sentinel voices support for the referendum proposal in this morning's paper. In their editorial, they state:

"...it's up to the business community to start pushing for referendums and to get behind a sales tax that can pay off big in economic development."

Naturally, strong business support would be needed to pass any sort of tax increase. Public sector support probably wouldn't hurt either. In fact, support and leadership would have to be garnered from many different constituencies if advocates expect eventual passage.

However, "needing support" is not a very intriguing point. It's a given.

A more compelling analysis is to weigh the actual chances for support in southeastern Wisconsin for funding a transit authority. So, what are the chances?

Based on what I've seen in other regions, referendum passage could pivot on the following three issues:

• What transit referendum? Oh, you mean the "livability" referendum. The saying goes, "he who frames the issue determines the outcome of the debate." And, so it is with transit. Framing an improved transit system beyond just "moving people" - but, instead, connecting transit to land-use, economic development, quality of life and other livability issues.
  
• Has the train already left the station? Many regions find that having a system component already in place makes it easier to gain voter approval. The reasoning is that voters generally abhor change and that envisioning a "system expansion" is much easier to swallow than voting for "a whole new system."
  
• Is this your first time? Transit referendum typically don't pass the first time out of the gate. The reasoning is that it takes time to build coalitions and conduct adequate public engagement in the lead-up to the vote.
  

Based on these observations, southeastern Wisconsin could have an uphill climb in persuading the public to support passage of a regional transit authority with taxing powers.

Holding the presidential candidates accountable

The Brookings Institution is on an election-year push to hold the presidential candidates accountable for a more competitive metropolitan America. In a recent op-ed article in The Plain Dealer, Bruce Katz and Alan Berube of Brookings wrote:

The United States has yet to recognize and leverage the ever-intensifying primacy of metropolitan regions as the building blocks of global competition, productivity and competitive advantage. And it has yet to take the necessary steps to ensure that metros grow in inclusive and sustainable ways that enhance national prosperity.

In the same article, Katz and Berube outline specific policy areas where they would like to see more assertiveness from the federal government:

1. Clean up of the Great Lakes - there is a cleanup plan, but no federal funding thus far
   
2. Clean up land - accelerate brownfield remediation to fuel economic development
3. Increase federal funding for sustainable transportation improvements
   
4. Expand the EITC for workers
   
5. Encourage interstate partnerships between metro areas (Chicago/Milwaukee, Cleveland/Pittsburgh)

Earlier this year, the Public Policy Forum hosted a presentation by John Austin of Brookings on The Great Lakes Economic Initiative (GLEI), which is a multi-year campaign to leverage the voting power of the Great Lakes into federal and state support of the region's powerful, yet struggling metro economies. There is particular interest in bolstering the profile of the Great Lakes region in the eyes of the presidential candidates.

Although federal government's leadership on metro issues has waned in recent decades with the devolution of power from Washington to the states, a more assertive federal government could have a profound impact on Milwaukee's revitalization efforts.

Whether or not you agree with The Brookings Institution's many recommendations is up to you, but, in this election year, placing each presidential candidate on the proverbial "hot-seat" when it comes to articulating a vision for strengthening the Great Lakes region does seem to make a great deal of strategic sense.

More immigration, less crime

Could Milwaukee's relatively low immigration rate (7.7% foreign-born) be partially responsible for its stubbornly high crime rate? That is a new theory being tested by scholars and criminologists throughout the U.S.

One study, was conducted by Harvard University sociology professor Robert J. Sampson, and followed 3,000 youths (aged 18-25) in 180 Chicago neighborhoods from 1995 to 2002. The findings revealed that Latinos perpetrated violence 10% less than their white counterparts. The researcher also found the odds of perpetrating violence were 85% higher for blacks compared with whites. Surprisingly, the reasons behind these disparities were largely not economic.

"That's not to say that the socioeconomic context you grow up in doesn't help explain the gap," says Sampson, "but in terms of family structure and characteristics, what matters instead of poverty are a family's years of residence in the neighborhood, having married parents, and living in an immigrant neighborhood, all of which reduce a youth's risk of engaging in violence." For instance, the study attributes the low rate of violence among Mexican Americans to a combination of factors: that group's high proportion of married-couple families, residence in neighborhoods with high concentrations of immigrants, and individual's first- or second-generation immigrant status. PRB

The relationship of high-immigration and relatively low violent crime rates seems to explain trends in cities including New York, Miami, Chicago and Los Angeles. Conversely, "low-immigration" cities with relatively high crime rates include Milwaukee, Detroit, Baltimore and Philadelphia.

Of course, some cities don't fit this model at all - Boston has seen an up-tick in crime since 1999 despite high levels of immigration. Some skeptics also point to the fact that many of these immigrant neighborhoods have benefited from "community policing" tactics, which could also be the reason why these neighborhoods are showing reductions in crime.

Successfully reducing violent crime rates is a complex and multi-faceted proposition, no doubt. But experts seem to be suggesting that one such tool to reduce crime rates would be to encourage more immigration, not less.

Just released - Income migration report

Income drain highlights Chicago’s value to M7
Milwaukee region loses $1.3 billion

A new Public Policy Forum study has found that households moving out of the Milwaukee region from 2001-2006 took with them $1.3 billion more in personal income than newcomers to the region brought in.

The report estimates the income drain has resulted in $105 million in lost tax revenue and thus a greater tax burden on those who remain in the region. But it also shows that the region is a big beneficiary of income moving from the Chicago area. In fact, southeastern Wisconsin’s only income gain comes from northern Illinois. Plus, Chicagoans brought with them higher average annual incomes ($47,880) than Wisconsinites who moved into southeastern Wisconsin ($34,124).

Sources of net personal income gain to the region include Lake, Cook, McHenry, DuPage, Will, and Kane counties in northern Illinois. Those six counties represented almost $400 million in income coming to the region during the period, 2001-2006.

Only Kenosha and Walworth counties in southeastern Wisconsin experienced net personal income gains last year. Kenosha attracted more than $30 million and Walworth was far behind at a little more than $3.2 million.

The primary beneficiary of the region’s income loss has been the rest of Wisconsin ($491 million), particularly the counties immediately ringing southeastern Wisconsin ($211 million), including Rock, Jefferson, Dodge, Fond du Lac, and Sheboygan counties. Other top beneficiaries of the region’s income drain include Florida ($328 million), Arizona ($132 million), and Minnesota ($62 million).

Of the regions studied for the report, only the Phoenix area had a net income gain, of 1.6%, last year. Arizona’s Maricopa County (in which Phoenix is located) was the biggest recipient of southeastern Wisconsin income, at $107 million.

The Chicago and Minneapolis-St. Paul areas lost 1.0% ($2 billion) and 0.7% ($518 million), respectively, of their total personal incomes. The Madison area almost broke even, but still lost 0.1% in personal income. Southeastern Wisconsin’s loss was 0.9%.

Income data for the study came from the Internal Revenue Service and the U.S. Census Bureau.

Denver or Milwaukee for MillerCoors?

Milwaukee, and its fledging regional economic development group, M7, have gotten themselves into one heck of a fight. The battle over attracting the newly merged MillerCoors headquarters will pit the upstart M7 against a colossus in the world of regional economic development - the Metro Denver Economic Development Corporation (MDEDC). Led by the highly regarded Tom Clark, the MDEDC was the first group of its kind in the nation and can trace its roots back a full 20 years.

This is a true David vs. Goliath story.

Based on what we know about both organizations, how will each group play their cards to capture the MillerCoors prize?

Quality of life and workforce
Right out of the gate, both sides will predictably advertise their superior quality of life and educated workforce. To be sure, there is plenty to support both Milwaukee and Denver's claim of "most educated" and "most livable." Denver has mountains and modern transit. Milwaukee has beautiful lakes and little traffic. Denver is located in a state that has 35.5 percent of its residents with a bachelor's degree or higher - third highest in the nation. Milwaukee is located in a state that hosts one of the world's best research universities and a superior K-12 system.

At this stage, both regions will have similar approaches - bombard the subject with favorable data on educated workers and livability. However, from this point forward, the strategies of Milwaukee's M7 and Denver's MDEDC could diverge in rather dramatic fashion.

Taxes
The M7, along with others in the community, will stoically downplay Milwaukee's "reputation for high taxes" while highlighting Milwaukee's lower cost of living.

Conversely, the MDEDC may actually downplay Colorado's low taxes. Such a contrarian strategy would instead highlight the Denver region's recent history of large public investments. Such a move by the MDEDC would draw from an experience the organization had in November of 2005 when their phone rang off the hook after a $3.7 billion "tax increase" passed in Colorado by referendum vote, 52%-48%. Who was calling? It was prospective businesses and, no, they were not mad at the tax increase. They were interested in moving to Colorado because of the anticipated greater dollars that would flow to higher education and infrastructure.

In short, Milwaukee talks costs, Denver talks investment.

Incentives
The M7, along with Governor Doyle's office, will follow through with a substantial incentives package aimed at "sealing the deal" with MillerCoors. Wisconsin plays the incentives game with gusto.

Conversely, the MDEDC will offer only a modest incentives package for MillerCoors because Colorado has little in the way of incentives to offer. Instead, recruiters will play up the Denver region's recent history of public infrastructure investments. Investment examples that the MDEDC touts:

• FasTracks - $4.7 billion commuter and light rail build out
  
• T-Rex - $1.7 billion freeway replacement project
  
• DIA - $5 billion international airport
• New baseball, football and hockey stadiums in downtown Denver
  

Again, Milwaukee talks subsidies, Denver talks investment.

End game
All else being equal, what would you take? Milwaukee, which downplays its high taxes but offers an attractive incentives package. Or, Denver, which plays up its recent investments but offers only a small incentives package?

On D-Day (Decision-Day), the MDEDC will presumably lay it on thick to MillerCoors by saying exactly what an MDEDC representative told the crowd at a recent conference in Denver, "incentives don't make a bad deal good." Denver will claim that despite Milwaukee's large incentives package, Milwaukee is actually the quintessential "bad deal" because of its inability (whether true or not) to make strategic investments that are important to the business community. MDEDC will predictably hit on the same theme over and over and over: Investment, not incentives.

If we lose MillerCoors, many will blame Wisconsin's high taxes. However, defeat could just as easily be blamed on an approach that views economic development as simply cutting checks (incentives) and cutting costs (taxes). Economic development is also about investment. Just ask Denver.