In Three Words, Build Baby Build
In short order, Wisconsin has found itself in a very enviable position. With an influx of billions of dollars, the question for the state remains, what will it spend its stimulus check on? How about the future?
Capital improvements and infrastructure spending both have short and long-term economic benefits for workers and contractors, as well as ancillary businesses and communities. Coupling these investments with economic development programs, like the Small Business Enterprise (SBE) and Residents Preference Program (RPP), would ensure that all Wisconsinites are able to reap the benefits.
A Shot in the Arm
The American Rescue Plan Act (ARPA) is a $1.9 trillion COVID-19 relief package, which builds upon multiple other stimulus packages (the Families First Coronavirus Response Act (FFCRA), the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the year-end spending and aid package; and is likely not the last push for pandemic-related stimulus spending as Congress takes up a $2 trillion infrastructure bill, dubbed the American Jobs Plan.
This last piece of legislation would have an obvious direct impact on construction, with $621 billion slated for transportation alone, including $115 billion for highways, roads and bridges, $85 billion for public transit, and billions more focused on pieces like air, rail, water, electric and transportation inequities.
More tangible, however, is the opportunity that is before us now. Through ARPA, Wisconsin will receive roughly $3.2 billion in direct funds, with additional aid to counties and municipalities of over $2 billion. With the city of Milwaukee alone receiving over $400 million in direct aid, elected officials face critical decisions on how best to optimize the greatest benefit from this opportunity.
Double or Nothing
In a regular year, the construction industry has a tremendous direct economic impact on Wisconsin, primarily through labor, but also on goods and materials and other professional and support services. All this spending has a ripple effect throughout the economy. A recent research study released by the AGC of Wisconsin found that approximately $1.81 in economic impact is created in the state for every $1 spent within the construction industry.
With that same report finding that average annual wages in the industry far outpace the state average for all sectors, and that roughly 12 jobs are created for every $1 million in construction spending, it shows that investment in infrastructure and development pays expansive, long-term dividends. Connecting these investments to programs that ensure equitable opportunities will help counties and municipalities achieve greater economic prosperity for their local small businesses and residents.
Investing in Successful Partnerships
For many years, the city and county of Milwaukee have utilized project-financing tools to leverage construction projects to increase opportunities for local small businesses and their resident workforce.
At the city level, the SBE Program, currently run through the Office of Equity and Inclusion, has had a long track record of success with area contractors. Partnering with professional, reputable contractors has been the key to helping enterprising small businesses grow successful sub and general contracting firms. These contractors who are willing to give the time necessary to pay it forward are the same contractors who appreciate that investment in partnership is necessary to growing a robust industry.
By partnering with the Building and Construction Trades, local contractors are positioned to make joint investments in areas such as recruitment and apprenticeship readiness programs through organizations like WRTP/BIG STEP. With WRTP/BIG STEP already in place, the city of Milwaukee has had a strong community partner to help accomplish the goal of workforce development through establishing career pathways into the building and construction trades. Specifically, the city has relied on WRTP/BIG STEP to help meet residency hiring goals through RPP certifications on a wide range of projects, from small scale to some of the more iconic projects located in the Park East, Harbor District and East Town neighborhoods.
The secret recipe here has been the partnership of public financing, community-minded owners, reputable contractors and the skilled trades, to produce successful outcomes for enterprising small businesses and a community workforce. Any municipality or county looking to fully optimize this influx of spending for their community would be well-served to look at this model.
A Marketplace of Ideas
As communities get set to work on this difficult task, leaders at the city of Milwaukee have pledged an open and transparent process through public input and analyzing the impact on equity. During this process it is important to obtain input from the community at large, but it will also be crucial to listen to the voices of industry experts, those who can help the city parlay this financial investment into long-term economic gains for the greater good of the community.
So, as the city looks at pieces like lead abatement, workforce and small business development, Century City strategic action plan projects, broadband and critical infrastructure, they can turn to trusted commercial real estate development organizations, like NAIOP Wisconsin, who are proactively cultivating a list of community facing projects that have historically been met with underfunding. Projects like brownfields, gap financing for shovel-ready community projects, grants for cost-prohibitive permit fees and workforce housing.
There’s Only but One Way
Appreciating that all communities have immediate financial holes to fill, it will still be vital to lean on the experts and trusted industry partners to ensure that as much long-term economic gain is created for the small businesses and neighbors that make up the fabric of this state. In our region, we are fortunate that the die has been cast in favor of investment in partnership between government, owners, contractors and the trades.
By fostering opportunities for enterprising subs and general contractors and providing career paths for Milwaukee residents, the Milwaukee Building and Construction Trades and their affiliated contractors will continue to do as they have always done — the right thing for the community.