New Berlin Water Park Needs Milwaukee Water: Put Development Benefits Into The Water Deal
Developers and the City of New Berlin are nailing down the final details for a major project to include a large hotel, convention facility - - and in water-strapped New Berlin - - a water park.
The new complex is in a portion of New Berlin that is outside of the Great Lakes basin, so its operations would rely upon water diverted from Lake Michigan - - if and when the city's diversion approval is obtained from regulators and the City of Milwaukee agrees to sell the water.
Two major points to consider:
Permission for the diversion to that portion of New Berlin requires the adoption of a regional water agreement known as the Great Lakes Compact.
But the Compact is stalled in the State Assembly, and obstructed, ironically, by New Berlin's State Senator, Mary Lazich, (R-), so New Berlin today does not have access to the water it needs to supply the project, and especially its water frolickers, with the water supply it wants.
Secondly: The hotel/convention facility/water park will be a direct competitor with Milwaukee's downtown convention center and nearby hotels.
Does it make economic sense for the City of Milwaukee to assist competitive development in New Berlin by selling it Milwaukee water?
And if the answer is deemed to be "Yes," or "Well, OK," then the next question is: At what price?
At a minimum, the New Berlin application, and especially the use of Lake Michigan water for this particular project, argue in favor of Milwaukee linking such water sales to formulas and prices that return to Milwaukee a portion of the tax-base enhancements in the buying community directly tied to the provision of water.
This is known as tax-base sharing, and its strategic value in the politics of water diversions in the region was favorably assessed by a legal consultant to the Waukesha Water Utility.
That consultant cited earlier business relocations and tax-base losses from Milwaukee to New Berlin's Industrial Park to support tax-base sharing as the way to help win Milwaukee's willingness to sell water to the suburbs.
Tax-base sharing, without regard to water, is already used in Minnesota to help guarantee that cities are not drained of their tax-base resources due to suburban development.
Milwaukee Alderman Michael Murphy has raised objections to the New Berlin diversion application, and Lazich has called tax-base sharing "extortion."
Information and references here and here.
Lazich's histrionics aside, tax-base sharing helps put dollars, substance and equity into regional cooperation.
Some history and a link to the Waukesha consultant's memo, are here.
Please be careful of tax-base sharing, especially the MN model, where it has met little success in curbing sprawl or eliminating real city-suburb disparities.
While it often gets kudos for being "regional cooperation," in truth it's a bad deal for core cities and inner ring suburbs. Outer ring burbs keep 60% of new commercial taxes. Core cities lose out more than win with tax sharing so skimpy.
Besides, it's forced regional cooperation (nice oxymoron, no?) for outer ring burbs and creates massive resentment, kinda like SEWRPC here. And it'll probably hurt regional transit efforts.
Ald. Murphy's backbone approach about water sales is admirable - just don't divert. Something the mayor could learn from. Sticking up for the city means not caving to deals that give scraps to the region's core in exchange for "regional cooperation."
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