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Stimulus disappoints Milwaukee builders

Sean Ryan
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Milwaukee homebuilders want a direct line to stimulus money rather than fighting for a piece of it after the city lends the cash to new homebuyers.

The Milwaukee Neighborhood Improvement Development Corp. anticipates it can give loans to 20 or 30 people to buy and renovate homes.

But Chris Hyler, owner of CH Home Improvements, Milwaukee, said he thought the American Recovery and Reinvestment Act money would be distributed as grants to small contractors. He said he is disappointed it will simply generate more projects.

“We believe that the stimulus money is to help businesses — small businesses — in the city develop, give them a little aid,” Hyler said. “That’s what it’s for, not to give loans so people can buy homes and then have small business owners climb all over each other.”

Hyler said the problem with giving loans to homebuyers is there is still a delay while they line up financing to buy the house. When the projects are bid, contractors will slash their prices to try to get the project.

Considering other costs of business are going up, Hyler said, he does not see much opportunity to grow his business through the program.

But small contractors must accept the responsibility of changing and improving if they want to take advantage of the housing projects, said Nelson Soler, chief solutions officer with the Multicultural Entrepreneurial Institute Inc., a Milwaukee-based business consultant. Instead of turning to government agencies to get contracts, the companies must pursue and make themselves attractive to private homeowners, he said.

“They think, well, this stimulus package is the answer for me,” Soler said. “Well, not necessarily.”

It’s difficult to pursue private residential projects because it is difficult to get enough money to buy materials and wait until the end of the job to get paid back, said Raymond Reed, owner of All Around Home Improvement Inc., Milwaukee. He said the city should create a credit line to pay for materials at the beginning of the projects and then get repaid at the end.

“I don’t have the money to put out there on the basis of, ‘I’ll give the money back at the end of the project,’” Reed said.

There are city, state and federal programs where builders can receive loans to cover business costs, Soler said, but many small contractors don’t pursue them because of the required paperwork, including business plans and financial statements. He said the government should streamline its processes and make it easier for businesses to get the loans, but contractors also must try harder to learn the business side of running a construction company.

“Both of them have to be held accountable,” Soler said.

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