A Tosa resident since 1991, Christine walks the dog, cooks but avoids housework, writes and reads, and enjoys the company of friends and strangers. Her job takes her around the state, learning about people's health. A Quaker (no, they don't wear blue hats or sell oatmeal or motor oil), she has been known to stand on both sides of the political and philosophic fence at the same time, which is very uncomfortable when you think about it. She writes about pretty much whatever stops in to visit her busy mind at the moment. One reader described her as "incredibly opinionated but not judgmental." That sounds like a good thing to strive for!
Maybe ABB is a household name to you. But the headline ABB puts Wauwatosa’s Innovation Park on the map sent me on a three hour search. Who? What? Why?
The where is clear enough: ABB will be the first business on the the Milwaukee County Grounds land recently sold to the UWM Real Estate Foundation for an engineering campus and research park.
The business is never really described beyond “a power and automation company,” although we are told it’s glad for the opportunity for cross pollination and making a natural marriage, that it’s global and well established , that it absolutely puts the campus on the map, and that it fits “the vision of innovation campus.”
Oh. And it will have underground parking.
Well. I know what underground parking is, and thank goodness for that.
ABB is indeed a big deal. A Swiss company with branches in 100 countries and some 145,000 employees, it makes, among other things, really fast switches to turn off high voltage direct current power. Transformers. Switching stations. Power products, power systems, automation, low voltage products, process automation. All kinds of sophisticated power grid stuff. Possibly, they make a little paper on the side. I'm not sure about that, though.
In 2009, ABB spent $1.3 billion on research and development alone.
With this deal, Wauwatosa will begin borrowing $12 million to pay for property developments – water and sewer mains, electric lines, roads – for the Tax Incremental Financing (TIF) district that ABB’s $13 million building will put on the map.
Perhaps you are wondering why a multinational company worth a gazillion dollars needs help from Wauwatosa to build here. The answer is, it doesn’t. But getting TIF subsidies has become an expected way for even big and successful businesses—maybe especially big and successful businesses—to improve their building cost bottom lines.
The idea is that the increased value of the developed land will create tax revenues in excess of the loan payments. According to Alderman Dennis McBride, “when UWM buys the land, the property will immediately have a taxable value of $13.55 million, which will provide $200,000 a year to pay off the TIF. . . The combination of the land purchase value, the value of the ‘accelerator’ building, and the built-out Eschweiler area is expected to exceed $32 million even before other buildings are built in the UWM park. These early developments should throw off enough money to pay for the TIF financing by themselves.”
If you are a bit skeptical about projections, speculations, and “shoulds,” you’re not alone. Let's hope.
Let's also question.
I suspect this is a good enough investment in Wauwatosa. But I don’t believe for a moment that TIFs should be used to make the rich richer. The system was created to help build vital things communities wouldn’t be able to afford any other way. Now it’s just an expected “bribe” to land a business.
Interestingly, ABB has a bit of a history with bribes and kickbacks in Mexico, Iraq (the Oil For Food program), and Nigeria. Only in those places, the money went the other direction. Google it if you want to know more. If the real journalists don't do the work for you, I'm certainly not going to.