Moments before I took the stage to moderate the Metropolitan Milwaukee Association of Commerce Future 50 program at the Hilton Milwaukee City Center last September, an economic development official who shall remain nameless wanted to tell me something.
“Today is very important day. There are representatives from a company from Spain in the room. They’re here to get a feel for what our business community and our business climate are like. They’re thinking of moving jobs here,” the official whispered to me.
With more than 500 people in the room … As if I wasn’t nervous enough!
A month or two later, the chief executive officer of a local manufacturing company told me that local economic development officials had arranged for some people from a foreign country to tour his plant. The mysterious, unidentified visitors wanted to learn more about potential vendors or partners in the region, in case they decided to move here.
Weeks later, I learned that Richard “Rocky” Marcoux, commissioner of the Milwaukee Department of City Development, would not be able to attend the BizTimes Commercial Real Estate & Development Conference because he needed to travel to Spain on a business recruitment mission.
It was an “Aha!” moment.
Soon thereafter, BizTimes Milwaukee broke the story that Milwaukee was one of three finalists to be the North American headquarters of a Spanish alternative energy company.
As we now know, that company turned out to be Ingeteam, a Spanish wind turbine company that confirmed Tuesday it will construct a $15 million, 100,000-square-foot facility in Milwaukee’s Menomonee River Valley. The complex will span about 8.1 acres at 3757 W. Milwaukee Road.
Ingeteam, headquartered in Bilbao, Spain, will employ about 275 workers in Milwaukee by 2015.
Milwaukee was chosen to be the site of the new plant after a coordinated recruitment effort that included officials from the Milwaukee 7 economic development team, We Energies, Marcoux and Wisconsin Commerce Secretary Richard “Dick” Leinenkugel, who went to Spain to seal the deal.
“The Menomonee Valley was once Wisconsin’s largest brownfield,” said Milwaukee Mayor Tom Barrett. “Now, the valley is home to businesses that employ thousands of people.”
The deal was made possible by $1.6 million in tax credits through the federal stimulus program, up to $4.5 million in state tax credits and another $500,000 forgivable loan from the state.
"After carefully analyzing our company's needs, we selected Milwaukee for our new production facility because the city is conveniently located for distribution of our products and has a solid industrial base from which Ingeteam can source materials," said Ander Gandiaga, Ingeteam's corporate director for international development.
“Milwaukee also has a labor pool experienced in electrical manufacturing. In addition, the area boasts prestigious universities with some of the highest-ranked engineering departments in the country that offer specific courses in renewable energy, which will be very useful when it comes to finding specialized staff," said Aitor Sotes, chief executive officer of Ingeteam Inc., Ingeteam's subsidiary in the United States.
Gandiaga also said the Wisconsin team "made an impressive effort to sell Ingeteam on the virtues of locating in this community. The Ingeteam project perfectly fits the model of the clean energy economy and job creation goals that the city and state are pursuing.”
Ingeteam considered more than 80 sites before selecting Milwaukee as the North American home for its company.
“They could have located this $15 million facility anywhere in the nation. Believe me, Michigan tried very hard,” Leinenkugel said.
Meanwhile, Spanish high-speed train manufacturer Talgo is shopping around for a site in Wisconsin to build an assembly plant after the state agreed to purchase two 14-car train sets.
Javier Rupérez, consul general of Spain in Chicago, said more Spanish firms are considering coming to Wisconsin.
“The state I have been visiting more often is Wisconsin,” he said.
“Milwaukee is going to be the first stop for a lot of Spanish companies to check out, ‘What did Ingeteam see?’” said Marcoux, who met with several Spanish firms during his journey.
The doomsday naysayers who perpetually beat the drum that Wisconsin is a horrible place to do business again had to take a holiday Tuesday. I love when that happens.
Steve Jagler is executive editor of BizTimes Milwaukee.
10 Comments
No holidy here. What you see as some sort of great triumph, we naysayers see as a sorry indicator of the folly of government's vanity.
According to your post the government will give at least $6,600,000 to pay a foreign company to bring 275 jobs here. You seem to think that it is an encouraging fact that the government has to pay about $24,000 per job to coax employers to hire here.
Another way to look at it is that the business climate here is such that we have to take substantial sums of tax money from those who already employ people here and from people who already work here and give it to others so that they will hire here. Your implicit point is that we should be content that Engeteam would not locate here without these involuntary transfers payments from Wisconsin taxpayers.
According to a January 27, 2010 WISN.com news item, the state lost 163,000 jobs last year. At $24,000 a head, the government could replace those jobs for mere $3.9 billion. I have a better idea. Why not leave that $6,600,000 and other so called economic development money with the taxpayers to spend and invest as they wish. That money would be at least as effective in creating jobs if left in the taxpayers' hands.
Our governing class and those who influence them recognize that if the money were left with the taxpayers, it might not be invested in wind turbines. And that's point. They believe the government should decide how our money is spent and invested. No wonder it takes some sort of bribe to convince businesses to relocate to a place where the object is to take as much cash as possible from the taxpayers and give it to politicians to spend on programs that provide good press release material, and to those who otherwise please those politicians.
To the usual "progressive" commenters: No need to get nasty, we just see the effectiveness and proper role of government differently.
That last comment was asinine. This is FANTASTIC news for the region. Anytime we can bring 275 family-supporting, cutting-edge, green jobs here ... That is GREAT news! Kudos to the people who made this happen. This is exactly the kind of forward thinking we need to compete in the 21st century. To heck with the naysayers. We're moving forward without them. They are going to complain no matter what happens. They are just angry people by nature. Viva la Milwaukee!
Congratulations to everyone who worked so hard - and continue to work hard - to bring us into the new century.
It seems that in Wisconsin the government will give you money if your are big enough (Mercury Marine) or create the right kind of jobs (green or trains). If you are a small business you will get squeezed.
Wisconsin has yet to adopt the increased Section 179 provisions for equipment purchases. While I can deduct up to $250,000 on a federal return I am limited to $25,000 in Wisconsin. That's just one example of Wisconsin's tax code that makes our tax climate hard for business to deal with.
Instead of the tax handouts for the blessed few, it would be far better to pass across the board cuts for everyone and create a better overall climate. If the climate is good we will not have to bribe companies to be here.
It appears an interesting approach to effectively give this newcomer a tax break. In truth, all the recent good news of new jobs has come by way of providing the newcomer (or potential departing enterprise) with a significant tax break. Is it possible that we are taxing to much? Food for thought.
Some of you people need to get a grip. 80 cities competed to try to get these jobs, to get this new factory to come to their town!!!!! Hello????? This is fantastic news! Are you kidding me? You are putting your partisan politics ahead of reality. You complain about taxes and now you complain that companies are getting a tax break. Milwaukee wins this one. Great job! And it sounds like there's more to come. The state people, Mayor Barrett's people and the MMAC all deserve some applause here. Bravo!
Marty and Tim:
Don't be so emotional. This is not about angry people versus enlightened people or partisan people. It simply boils down to whether one believes that it is better to take money from the firms and workers who earn it and to spend that confiscated money in ways that appeal to politician and their retainers or whether the people should be allowed to keep and invest and spend their money to generate economic activity. If political press releases and photo ops make you happy, good for you.
Engeteam is merely the latest variation on a theme by which taxpayers subsidize special interests. Mercury Marine is another example. Governments fall all over themselves in plant siting battles. By all means, let's join in the competition among states and local governments to see who can out subsidize the others to attract big businesses and institutions. The process guarantees that the "winning" suitor is actually the loser who, caught up in the competition, has paid the largest margin over the value to the community of the siting of the entity.
Wisconsin lost 163,000 last year. You celebrate giving away $6,600,000 of your and my tax dollars for 275 jobs. (It does come from tax revenue-where do you think the money comes from that replaces the taxes foregone via preferential tax credits?) Why do you think that money spent by citizens and businesses would have less of an employment effect?
Engetean is a mere token, an idle gesture. I believe that you and I would spend and invest our money in ways that would better create economic activity. You think the government is a more efficient and effective engine of growth.
It's a simple difference of opinion and you are welcome to yours.
I don't see this as a democrat/republican issue (although Dems usually hate corporate welfare). I see this as how we, as a state, create an environment to attract business. If politicians are going to pick winners and losers based on the political correctness of the jobs it simply means that they will have to continue to businesses like the accounting firm I own at a high rate.
I think if you created a better environment in the state you would attract businesses without having to bribe them to come.
michael pretty much nailed it. we just provided a foreign competitor with $6,600,000 in tax breaks. Will we also provide $6,600,000 to the companies in wisconsin that have the misfortune of already being in our state? Or when a local business folds due to the significant competitive advantage just handed to engeteam will we provide them a bail out?
we take taxpayor money then:
a. give it to a foreign competitor
b. thus the competitor already has $6,600,000 on the bottom line
c. with the enhanced bottom line they beat out local competition
d. the local business folds
e. the worker now must get unemployment from our taxes
f. taxes are increased to pay for the unemployed
g. we bribe another company to come in to help employment rate
h. see the pattern yet?
It is intellectually lazy and in fact a lie to say that Wisconsin has a horrible business tax climate. Rather than just taking the word of the talk radio twits, do some honest research. According to an independent study by Ernst & Young, Wisconsin has the 30th-highest business tax burden among the 50 states and D.C. (http://www.cost.org/Page.aspx?id=69654). Don't be a sheep. Like someone else here said, 80 other cities tried to get these jobs ... And lost.