Whitewater’s Innovation Center: Grants and Bonds

Whitewater’s planned Innovation Center and Tech Park rest on a multi-million dollar federal grant and millions in federally-subsidized bonds. The grant is for $4.7 million, and here is how a page from the Economic Development Administration described the purpose for those millions:

September 7-September 11, 2009

….$4,740,809 to the Whitewater Community Development Authority, the University of Wisconsin Whitewater, and the City of Whitewater, Wisconsin, to fund construction of the new Innovation Center and infrastructure to serve the technology industrial park, including a road linking the project with the University of Wisconsin’s Whitewater campus. The goal of the project is to create jobs to replace those lost in the floods of 2008 and those lost from recent automotive plant closures. The Innovation Center will serve as both a training center and technology business incubator and will be constructed to meet Leadership in Energy and Environmental Design (LEED) green building certification standards. A portion of the project’s cost will be funded through EDA’s Global Climate Change Mitigation Incentive Fund. This investment is part of an $11,051,728 project which grantees estimate will help create 1,000 jobs and generate $60 million in private investment.

Every part of this description of the grant’s goals is astonishingly inapplicable to the use and value (such as it is) of the Innovation Center that Whitewater is actually building.

The EDA states that “the goal of the project is to create jobs to replace those lost in the floods of 2008 and those lost from recent automotive plant closures.”

Although I have been a critic of the project, there’s no greater criticism possible than the gap between the goal of these millions and the use to which they’re being put.

These millions came from some taxpayers, to create jobs in our community to alleviate suffering from natural disaster and industrial decline.

Instead, resources from taxpayers were taken for this project, thus they have been denied to needy people who might have made proper use of them. They’ve been squandered on an empty project that depends on shuffling publicly-paid employees from one suffering community to another, or airy speculation about video games, etc.

Millions are out of work, across America, and our own community is afflicted with plant closures, high unemployment, and high child poverty. Other communities in the Midwest have those same problems.

It was wrong, and selfish, to take this money and use it so poorly. What we have wasted others might have used for a better and truer purpose.

In all the time that I’ve read of this project, I cannot recall anyone ever stating plainly the intended goal of the grant. When Whitewater’s City Manager Kevin Brunner mentioned the grant in one of his Weekly Report posts, he mentioned the amount, but not the federal goal of the grant. See, Weekly Report for 12-18-09.

There have been reports stating plainly the goals of other grants, including a similar one that UW-Whitewater and other schools received for $5.9 million. (That grant, involving job-retraining in conjunction with other nearby universities, apparently has a goal similar or identical to the one that the Innovation Center plainly isn’t meeting.)

Considering the Economic Development Administration’s stated project goal, it’s easy to see why those backing the project would want to omit mention of the grant’s intended, specified purpose.

No matter what one thinks of federal spending, that money should be put to good use in pursuit of the stated and specified federal goal. That’s not happening in this project.

There’s more to write about the gap between the goals of the grant and the sad use to which it is being wasted.

And yet, it’s not merely the grant that’s so ill-fitting. As I noted last January, a press release for the bonds used to supplement the eleven-million-dollar project’s cost didn’t accurately mention the poor condition of one of our tax incremental districts. Instead, that press release from Moody’s gave an unrealistically sunny description of our TIDs (“successful use of tax increment districts (TIDs), including five additional TIDs established in 2007”).

This description is both shocking and risible, as months earlier, in preparation for the city budget, Brunner mentioned the possibility of distressed status for TID 4. (The legislation for distressed TID status in Wisconsin was not yet enacted, but was then only pending.)

(See, from January 21, 2010, On Whitewater, Wisconsin’s Recent Bond Rating.)

This project wrongly relies on a grant used in ways stretched beyond all fair and reasonable meaning, and millions in bond debt for a city with an already-ailing tax incremental district.