Milwaukee has money to burn on rehabilitation projects

By James Briggs

A February deadline is looming for the city of Milwaukee to spend millions of dollars on neighborhood rehabilitation projects.

City officials aren’t quite sure where to spend the money, however, creating a possible scenario in which Alderman Robert Bauman said Milwaukee could find itself “at the 11th hour trying to shovel money out the door.”

Milwaukee has spent $3.95 million of $25 million awarded by the federal government as part of the Neighborhood Stabilization Program 2. Authorized by the American Recovery and Reinvestment Act, the program seeks to mend neighborhoods that have fallen into decay because of foreclosed and abandoned properties.

Milwaukee must spend at least half of its grant total, or $12.5 million, by February 2012 and the rest by February 2013 or risk losing the money. With $8.55 million left to spend in less than five months, though, Bauman said, “It could be a last-minute rush.”

The city has issued contracts to demolish 101 structures and has targeted another 58 buildings, said Art Dahlberg, commissioner of the city’s Department of Neighborhood Services. Those projects, he said, should result in another $1.5 million in expenditures.

“From a DNS perspective, we are meeting on this on a weekly basis and making sure all the triggers are being pulled and that we’re going to deliver the goods,” Dahlberg said.

Still, the city has a long way to go.

Maria Prioletta, the city’s Housing and Neighborhood Development manager, said she was confident the city could spend the money, but also do it in a strategic manner.

“I’m not saying I’m just totally relaxed about it. It’s a huge obligation,” she said. “But we are very well aware of it and working to make sure those deadlines are met, and we do have some Plan Bs.”

Those plans, she said, could include buying and rehabilitating troubled rental properties that have been managed by slumlords in the past.

But Alderman Michael Murphy cautioned the city could overpay for buildings if everyone knows Milwaukee needs to dump millions of dollars. Apartment buildings, he said, are “selling for 20 cents on the dollar. If anybody senses the city has to spend money, it’ll jump to 40 cents on the dollar. I don’t want to do that.”

The city also could demolish even more buildings, but Bauman said that would be a thoughtless way to spend the grant money.

“Two years ago, we said we’d better be very careful because we don’t want to be in a position where, in order to move the money out the door, we just start wildly demolishing things,” Bauman said. “We can demolish a house in 24 hours and, boy, we can create a lot of work real fast and pay people to wildly demolish stuff, but is that in the long-term best interest of the city?”

Failing to spend the money, though, could be “pretty embarrassing,” Murphy said, because he, along with Mayor Tom Barrett and Common Council President Willie Hines, are preparing to seek additional money from the U.S. Treasury Department.

“It would not look very good for us,” Murphy said, “if we send this letter and they call back and say, ‘President Hines, mayor, those are great ideas, but you haven’t even spent the money we gave you.’”

Murphy has asked city staff members to provide a detailed report by the end of September on how the city can spend its remaining $8.55 million by February. If it doesn’t seem feasible, Murphy said, Milwaukee might have to ask for an extension.

“I’m really nervous about spending $8 million in four months,” Murphy said. “The worst thing (would be if) the public gets the impression we’re just wasting money.”

Bauman, though, said the city needed to come up with a plan, because the federal government likely won’t grant extra time.

“That’s the whole point of stimulus, is to spend it,” Bauman said. “They’ll be happy to give it back and reprogram it to someone else who is spending it.”