Alderman Robert Bauman on Tuesday failed for the second time to persuade his colleagues to extend — rather than rescind — Harley-Davidson Inc.’s obligation to build a 100,000-square-foot office building in Milwaukee’s Menomonee Valley.
The Common Council approved a settlement in which Harley-Davidson will pay Milwaukee $700,000, forfeit $1.2 million in tax-incremental financing and give the city a five-year option to buy back undeveloped land for $535,000.
The deal was necessitated by Harley-Davidson’s failure to live up to a 2004 agreement that called for the company to build a museum, archive building, restaurant and office building on 13 acres. To close the deal, Milwaukee offered a lucrative incentive package and paid $25 million to move its Department of Public Works, which operated at the site at Sixth and Canal streets.
Harley-Davidson finished the first two development phases ahead of schedule but failed to begin work on the third phase by its June deadline. Company officials have said economic conditions made any new development unwise.
Bauman’s proposal, though, stirred a testy debate during which some council members called into question Harley-Davidson’s commitment to Milwaukee.
Company officials did not immediately respond to a request for comment.
Bauman called his five-year extension a “proposition I can’t conceive of them not agreeing to, but for the fact that they just don’t want to create jobs in the city of Milwaukee.”
Alderman Jim Bohl said the settlement, piled atop the original deal, reflected Harley-Davidson’s successful efforts to negotiate on behalf of its corporate interests.
“I would argue we coddled them the first time around,” Bohl said. “I think Harley-Davidson put its finger on the map and said, ‘That is our place,’ and we rolled over and said, ‘We’ll do it at whatever cost.'”
It’s another factor to consider, Bohl said, that Harley-Davidson reports it can’t build in Milwaukee, yet recently has opened new offices in other cities and reported a 36.8 percent increase in corporate profits over the past year.
Alderman Michael Murphy, who helped negotiate the settlement, said he is concerned the rhetoric of some council members depicted Harley-Davidson as having suckered Milwaukee into a bad deal.
“I don’t think they’re the bad guy,” Murphy said. “I think the economy is the bad guy, and they’ve been put in a difficult spot.”
Alderman Willie Wade agreed, saying, “It’s been unfairly framed that Harley is trying to get away with something.”
The company’s intentions notwithstanding, Bauman said, the city’s settlement could let private companies enter into future agreements with Milwaukee under the assumption they easily can back out later.
“I think it’s important that we hold corporations to their obligations,” Bauman said. “Harley-Davidson made a promise to the citizens of Milwaukee.”
Harley-Davidson’s $700,000 payment to Milwaukee will go toward future development in the Menomonee Valley, which has undergone a rebirth stretching nearly to Miller Park since the Harley built its museum.
“The Menomonee Valley,” Wade said, “is an example of what happens when government works with private industry to create jobs.”
But the city’s settlement with Harley-Davidson, Bauman said, is an example of what businesses could come to expect from Milwaukee.
“We’re letting someone off the hook,” Bauman said, “because they don’t want to be on the hook anymore while creating jobs somewhere else.”
Although the city’s $700,000 check will do some good, Alderman Nik Kovac said, it will fall well short of adding the same type of value to the neighborhood that could have come with a new office building.
“This may be the best deal we could have gotten,” Kovac said, “but I certainly wish it wasn’t.”