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Boston Store deal clears hurdle

The lack of assurance that other retail development would follow Milwaukee’s offering Boston Store $1.2 million to stay downtown frustrated some aldermen Wednesday even as the Common Council approved the deal.

“At the end of the day, it really is about investment,” Alderman Joe Davis Sr. said after the meeting, during which he voted against the Boston Store subsidy. “It’s not about subsidies.”

The council voted 11-3 to approve the subsidy, which would be offered to York, Pa.-based The Bon-Ton Stores Inc. in exchange for commitments to keep its store and offices on Wisconsin Avenue through January 2018. Mayor Tom Barrett would need to sign off on the proposal for it to take effect.

According to information provided to the Common Council’s Zoning, Neighborhoods and Development Committee, the downtown Milwaukee Boston Store lost about $600,000 in revenue in 2012. About 800 people work in the headquarters offices and the store.

Jeff Fleming, spokesman for Milwaukee’s Department of City Development, said a term sheet still needs to be signed to finalize the subsidy, which would be made available by extending for one year a downtown tax increment financing district that otherwise would close.

The $1.2 million would be offered in four annual $300,000 checks, but the payments could be less if job-retention requirements are not met. Boston Store could use the money for advertising, store promotions, equipment, leasehold improvements and working capital.

Davis said he objects to using TIF money to subsidize payrolls, and he said that is exactly what he fears could happen. Furthermore, he said, he has not heard any explanation of how the subsidy would lead to additional development along West Wisconsin Avenue.

Alderman Bob Donovan, who also voted against the proposal, said the city needs a broader vision than its current Downtown Comprehensive Plan, which last was updated in 2010.

Plans, he said, often end up on shelves, collecting dust. However, he refused to elaborate on how the city has failed to enact the Downtown Comprehensive Plan.

Davis said one root of the problem is the DCD’s focus on housing projects. While that is important, he said, the department also should be trying to attract retail development, and that does not seem to be happening.

Fleming said he rejects that characterization and cited as an example the Wisconsin Avenue Milwaukee Development Corp., a task force led by Milwaukee real estate attorney Steve Chernof. Fleming said that task force is proof of the city’s commitment to promoting retail development.

“We’re not in a position on our own,” Fleming said, “to define what the private sector can or ought to do.”

Chernof was not immediately available to comment Wednesday afternoon.

Barrett named Chernof the leader of the task force, Fleming said, in an attempt to stimulate investment using private-sector expertise. The group, formerly the West Wisconsin Avenue Task Force, is exploring how to promote development, including retail, downtown.

Alderman Nik Kovac, who voted in favor of the Boston Store subsidy, is a member of the Wisconsin Avenue Milwaukee Development Corp.’s transportation committee. He said he has reservations about using TIF money for operating costs but sees the value of retaining the corporate jobs.

He also said he agrees the city needs to ramp up implementation of past planning efforts, such as the Downtown Comprehensive Plan, but the task force’s efforts and Boston Store subsidy could spur more retail development on Wisconsin Avenue.

“Whatever plan we come up with,” he said, “having an open and functioning two-floor department store can only help.”

But the task force, Davis said, despite its expertise, is not a substitute for city government.

“There has to be a long-term, viable plan,” he said.

About Beth Kevit

Beth Kevit is the Milwaukee city beat reporter and also covers real estate. She can be reached at [email protected] or 414-225-1820.

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