When the company first proposed setting up at Brunswick Landing, Kestrel was offering just the kind of jobs Maine wants. But Kestrel also needed up to 100 million dollars to start up production. And it turned out Maine wasn't able to help the company find that money quickly enough to land all the jobs. Wisconsin was able to provide the needed financing, so Kestrel went West.Basically, Kestrel and other investors will get major federal tax write-offs for going in on this project, and the state of Wisconsin is gambling a large amount of their projected allotment on this one project. If you look at the New Markets tax credit 2010 award announcement, you'll see that there is only so much money to go around, and that the $90 million is just an expected amount that Wisconsin will win. What if they don't get all of the $90 million they think they'll get in the coming years? Hmmm...
Economic Development Commissioner George Gervais says Maine was very competitive with Wisconsin - except for one area. Kestrel was counting on a federal tax credit program called New Markets to provide the financing needed to start up production. A private, non-profit economic development agency called CEI manages the New Markets program in Maine, and Gervais says CEI had assured Kestrel it would provide the company all the tax credits it needed to raise money. But it only approved $20 million in credits, far less that the company required.
Wisconsin reportedly provided up to $90 million in New Markets credits. Gervais blames CEI for the loss of Kestrel. But CEI says that's not true. The agency says it never promised Kestrel more than the $20 million in tax credits the board approved last year. Charlie Spies of CEI says that was clear to Kestrel all along. He also says CEI has provided financing for at least one other company setting up at Brunswick Landing.
State senator Stan Gersofsky says he also thinks Kestrel would have stayed if it had gotten all the tax credits it expected
And it's worth mentioning that this Kestrel project was chosen by Walker and WEDC instead of many others in low-income areas that could use the help. It's a classic case of picking winners and losers, and you sure hope this wasn't done out of complete desperation by the Walker folks, given the recall election and the "50th in the nation" status on jobs.
You certainly hope there's not a backroom pay-for-play deal involved in it, like I highly suspect in another tax credit/ expansion announcement this week. Tim O'Brien homes is co-owned by current U.S. Senate candidate Mark Neumann, and announced plans to set up a second office in Madison, with a possible (key word) addition of 200 jobs over the next two years. Of course, the same announcement mentions the head of the Wisconsin Builders Association will run the Madison division of O'Brien Homes, and the Builders Association/ Building a Better Wisconsin PAC has thrown $7,000 to Walker in the last year, and the Realtors PAC has thrown another $15,000.
And gee, who was up there at yesterday's "Stand with Walker Rally" in Tosa? That's right, Mark Neumann, supporting someone he was (rightfully) calling out 2 years ago. Guess everyone's got a price, eh Mark?
Oh, and here's another one of our "job creators" putting our taxpayer dollars to good use- Spectrum Brands. Looks like Spectrum is using their state loan and tax credits to move its headquarters from Madison to Middleton late next year. (They also get a nice amount of TIF write-offs on their property taxes from Middleton. I'll try to contain your shock at that one.)
You may recall that earlier this month we found out that Spectrum gave its CEO a stock-option laden compensation package worth as much as $13.7 million as a reward for losing $75 million in fiscal 2011. Of course, it's a lot easier for a stock to go up when its getting free tax write-offs from the state and a local government. And who picks up the difference in taxes in the meantime, until this Trojan Horse actually nets something down the road? That's right, you and I.
Cool deal, huh? I think I'm going to announce that I'm opening an amusement park called "Jake's Funhouse" near Olin-Turville Park in Madison, which I'm certain, CERTAIN, will net a few hundred jobs in a few years. I just need the financing and tax credits to get it off the ground. Think WEDC and the Walker boys will float me a few million bones in credits or loans to get me rolling? Or do I need to ante up to Friends of Scott Walker first?