Here are 18 reasons for why I won’t vote for Scott Walker

Posted in Uncategorized on October 11, 2014 by Jim Rosenberg

KONICA MINOLTA DIGITAL CAMERA

During tax season each year, Henry Block used to appear on television with his 17 reasons why you should have your taxes done by H&R Block. Today, I use Turbotax, it’s election season — and I’ve got 18 reasons why Scott Walker should not be re-elected governor of Wisconsin. I suppose some may try to debate all this stuff in the comments section. As entertaining as wading through all of that tortured logic might be, I think those who want to do that should just write their own blog. I also apologize in advance for not talking about why Mary Burke is the far superior candidate in her own right, but I’ll be way over my word count just talking about why Walker needs to be put out on the curb.

1. Walker ran for office promising 250,000 private sector jobs. He won’t come in with half that number and a lot of that is his own fault. The sum of his efforts has been to make Wisconsin a laggard in the Midwest in job creation and it is because his policies are creating a lower standard of living for much of Wisconsin’s middle class. When you operate in an economy that is more than two-thirds consumer-driven, giving tax breaks to wealthy people who don’t need to invest or spend it in Wisconsin is not an effective way to drive job growth. Giving Walker more time is only asking for more of the same. The state sank from 11th in job creation to as low as 37th. We lost thousands of jobs in August. Walker regularly switches gears on which numbers he wants to use. Walker either doesn’t understand economics or he refuses to respond correctly to the conditions that we have in Wisconsin.

2. Wisconsin is open for business? Think again. In addition to the substandard performance on producing jobs, Walker has also managed to position Wisconsin as third worst in the nation in terms of new business startups that actually have employees. http://www.jsonline.com/business/new-census-data-shows-states-2012-start-up-rate-third-lowest-in-us-b99360146z1-277290161.html
3. Scott Walker made the decision to deny tens of thousands of Wisconsin people of health care under the Affordable Care Act by refusing to expand Medicaid under the most advantageous federal rules. This not only kept hundreds of millions of dollars out of Wisconsin, but it’s costing Wisconsin taxpayers tens of millions more to inadequately attempt to shore up health care providers who are not receiving payment for services. I’d say it was dumb, but it’s really a lot worse than that. It illustrates Walker’s propensity to put ideology over serving the most people in this state in the best and most cost-effective way possible. Republican governors across the country are accepting the expansion because it makes fiscal sense. Walker is more interested in scapegoating the poor and acting like they’re responsible for their own failures and some of his.

4. The high-speed rail fiasco lost Wisconsin a train manufacturer and will cost Wisconsin many millions of dollars in a lawsuit from Talgo, along with maintenance and upgrades that would have been covered by federal dollars and will now be covered by state taxpayers. It also cost us jobs and even more importantly, it will cost the state the ability to be a vital link between Chicago, Milwaukee and Minneapolis-St. Paul. It was short-sighted and it costs Wisconsin money.

5. You can’t trust Scott Walker to tell you his agenda. Walker’s signature legislation was Act 10 in 2011 and whether you like it or not, it was not something he campaigned on. Who knows what Walker will do to impress his out-of-state donors as he tries to ramp up his aspirations for higher office? Some guesses? Forget about increasing the minimum wage and think about what being a “right to work” (for less) state really means.

6. There is no particular reason to believe Rebecca Kleefisch would be a good governor, but that may be who you’re voting for, if you vote for Walker. It’s not that Walker will be elected President, because he won’t. It’s because also-rans tend to pick up cabinet jobs in the event that their party carries the Presidential election and Walker is only too eager to play on the national stage, no matter what the role may end up being.

7. Scott Walker is not honest. Of 109 statements ruled on by Politifact, 68 percent were only rated half-true or worse; 53 were rated mostly false, false or “pants on fire.” http://www.politifact.com/personalities/scott-walker/

8. There are far too many indicators of corruption to just shrug them off. The John Doe investigation has brought up a troubling pattern of flaunting Wisconsin’s election laws and a number of Walker’s past staffers have been convicted of wrongdoing. There are quid pro quos with actions and campaign contributions. There are unqualified people who have been put into high-ranking positions for which there is no particular reason to believe that they can do the job. Some of them have had to be pulled back when it became too embarrassing for even Walker, who has proven very difficult to shame. Others continue on in an environment where political loyalty to Walker is far more important than qualifications or competence. Then there are those who have already been convicted while investigations still continue. Kelly Rindfleisch, deputy chief of staff while Walker was Milwaukee County executive, was convicted of illegal campaign activity. Tim Russell, a Walker appointee who headed a veterans group while Walker was county executive was convicted of stealing more than $20,000 and sentenced to two years in prison. Darlene Wink, constituent services director while Walker was county executive was convicted for working on the Walker campaign on county time. Kevin Kavanaugh, Walker-appointed member of the Milwaukee County Veteran Service Commission, was convicted of stealing $51,000 from donations for military veterans and families and sentenced to two years in prison. Bill Gardner, Walker campaign worker and president of Wisconsin & Southern Railroad convicted of violating campaign finance laws during Walker’s first gubernatorial run and received two years’ probation. Brian Pierick, Walker website administrator, who sent lewd text messages to 17-year-old. This is more than just a run of bad luck.

9. Walker is inaccessible to the people of Wisconsin. He makes very few public appearances and instead opts for controlled environments; often on private property in which he carefully controls who is there and then allows “credentialed media” for photo ops. His security costs are astronomical in comparison to his predecessors. He spends an inordinate time out of state courting donors to fund his campaigns and trying to burnish his far-right bonafides. His private and public air travel expenses alone are more than most Wisconsinites earn in a lifetime. A man of the people is something Walker definitely is not.

10. Walker and the GOP legislature are following the right-wing script in diminishing women’s rights. Scott Walker signed a Republican bill to require women seeking abortions to undergo an ultrasound and ban doctors who lack admitting privileges at nearby hospitals from performing the procedures. He repealed the 2009 Equal Pay Enforcement Act, removing state legal recourse for women who are victims of pay discrimination. Five Planned Parenthood clinics have closed in Wisconsin thanks to state budget cuts directed at them. None of them provided abortions. Walker told the Journal-Sentinel editorial board in 2010 that he opposed the right to choose abortion even in cases of rape or incest. Despite a sincere-sounding ad he made trying to sound reasonable, he’s an anti-choice extremist and he always has been, which why he is so strongly supported by that crowd.

11. Walker wasted Wisconsin taxpayer money defending the state’s unconstitutional ban on same-sex marriage while presenting an image of backwards, reactionary leadership that is not attractive to progressive companies who might want to locate in the state.

12. Wisconsin is one of only three states to end residents’ access to increased food assistance paid for by the federal government through “heat-and-eat” programs. We will now see cuts in federal Supplemental Nutrition Assistance Program (SNAP, or food stamps) benefits as a result of the states’ decisions not to increase the amount of heating assistance given to people in poverty. States could contribute $20 per household in order to receive federal food stamp funding averaging $1,080 in additional food stamps. What governor turns down leverage of $54 to $1 to help poor families? Answer: Scott Walker. It’s more evidence of his contempt for the poor and it matches up well with his move to slash the Earned Income Credit to help fund tax breaks for the wealthy. While Minnesota was beefing up funding for heating assistance during the most brutal winter many Wisconsinites have seen in their lifetimes, Walker was offering to loan money to the fuel suppliers. It takes a real ideologue to refuse spending 20 cents to help a poor family get $10. That’s what Walker is.

13. Even though Wisconsin did more than enough to get rid of its deficit and be in the black through cuts, Wisconsin now faces a looming $1.8 billion structural deficit because Walker and the GOP thought it was time to play Santa Claus with tax cuts and now revenues aren’t matching up to expenses. Enjoy the 22 cents a day that Walker is touting in his campaign ads (because that’s what the average tax savings adds up to, although it isn’t being expressed that way in the ads. Go ahead, do the math.)

14. Allowing Walker to continue as governor will mean more years of a Wisconsin government that has no checks and balances. The reason the state is miserably gerrymandered, growing its debt and building an ever-larger structural deficit is because it suits Walker and the Republican legislature just fine. Things won’t get fixed by the people who are breaking them and their thinking doesn’t reflect Wisconsin values. Between a compliant GOP legislature and the fact that Club for Growth/WMC bought seats on the Supreme Court, Walker can operate with impunity and that is exactly what he does. It’s also why Walker truly owns his failures; he’s had every advantage.

15. Walker and the GOP are weakening public schools and higher education by choking them off from resources needed to maintain a quality program. The longer they have unfettered power, the more damage they will do – and they’ve done plenty already.

16. Forget about anything related to improving the environment. In Walker’s Wisconsin, degradation for private profit is the order of the day.

17. Republicans used to be about local control. Forget that with Walker and the GOP. They’re all about expedience for their campaign donors. Ditto for consumer protection, where they have also gutted and rewritten the rules on behalf of their big business supporters at WMC.

18. I played softball with Tommy Thompson. Doyle was everywhere. There were compromises and middle ground in those days. Not only is Scott Walker unable to appear in public or reach across the aisle, he can’t hear or see across the aisle because instead of building bridges, he builds walls and serves his own interests instead of the people’s.

Times were not good when Scott Walker came into office, but looking across the river to Minnesota, it is clear that a more progressive, collaborative approach to governing produced much better results with income, unemployment and more. Walker is a polarizing figure and Wisconsin won’t be able to perform to its capacity until we stop trying to alienate and marginalize half the team, but that is what Walker is constantly doing. He’s a poor leader because he fancies himself as a ruler – and no, it’s NOT working.

The sad truth is that If Walker and the Republicans had spent half as much time trying to serve the people of Wisconsin as they did figuring out how to stack the deck for themselves in upcoming elections, perhaps we actually would all be better off. It’s well past time for this experiment with the far-right wing agenda to end in Wisconsin. Scott Walker needs to go.

JR

Walker campaign: still trying to sell the big lie on jobs

Posted in Uncategorized on September 3, 2014 by Jim Rosenberg

Walker AFP - Reduced
“Mary Burke served as Jim Doyle’s commerce secretary. She said, ‘I support Governor Doyle’s policies entirely,'” the narrator in the Walker ad says. “And when Doyle’s term ended, Wisconsin had lost 133,000 jobs.”

It kind of makes you think that Mary Burke had something to do with Wisconsin losing all those jobs, doesn’t it? But that’s not the case. Mary Burke was commerce secretary from January 2005 until November 2007. During that time, Wisconsin added more than 72,400 jobs. The unemployment rate dropped from 4.8 percent to 4.6 percent. In fact, if Walker had added jobs at the same rate as Wisconsin jobs were being added during Mary Burke’s 22 months as Commerce Secretary, he would have around 35,000 more jobs to his credit by now. Instead, he will come in at less than half of the 250,000-job promise that was the pillar of his 2010 campaign.

In August of 2013, Walker tried to walk back his promise. It didn’t work. Then he tried to reaffirm it. That didn’t work, either:

http://www.huffingtonpost.com/2013/08/29/walker-jobs-pledge_n_3838356.html

Walker job graph

Walker can’t even blame his commerce secretary, because essentially, it’s him. He chairs the scandal-plagued Wisconsin Economic Development Corp., which replaced the Wisconsin Dept. of Commerce. Last year, the non-partisan Legislative Audit Bureau found the Wisconsin Economic Development Corp. “did not have sufficient policies, including some that were statutorily required, to administer its programs effectively.” More recently, the Wisconsin Economic Development Corp. approved a $6 million tax credit to Ashley Furniture, whose officers then quickly gave $20,000 to Gov. Scott Walker’s re-election campaign. It’s something that seems to fit a pattern, according to observers.

“We’ve seen Gov. Walker use our tax dollars for companies that outsource Wisconsin jobs overseas and give over $500 million in tax dollars to companies that have given his campaign over $1 million. If we were looking for a return to the days of corruption, cronyism and incompetence, then Gov. Walker’s got a ‘Wisconsin Comeback’ for you,” One Wisconsin Now Director Scot Ross said.

As for Gov. Doyle, he had the unfortunate timing of happening to be in office during the Great Recession, which began under Republican President George W. Bush. The U.S. lost 8.7 million jobs as a result of the recession and some of those were in Wisconsin, but Republicans don’t like to talk about that happening under Bush. Instead, they are trying desperately to blame it all on Doyle and then, by extension, to tie it to Burke. The problem is that even if you wanted to blame everything on Doyle – which is ridiculous – the job losses didn’t occur while Mary Burke was serving as commerce secretary.

More importantly, people need to understand that as the handmaiden of far right-wing interests, any talk about more jobs and better pay coming from people like Scott Walker is going to be exactly that: talk. The only reason that Walker talks about jobs at all is because he has to. Even cursory polling will tell any politician that jobs and the economy represent the Number 1 issue for voters, as has been the case for many years. But what some people on the right really want when it comes to labor is very different from what most people want. Instead of a rising tide for all, they want a buyer’s market for labor; where pay, benefits and upward mobility are all very limited; where people are grateful to have any job at all and will take whatever they can get. That is what is eroding the middle class in this county and that is the unfavorable environment for workers in Wisconsin that Walker has been able to consistently deliver during his term. And plenty of his biggest campaign donors like that situation just fine.

JR

Fix organizational culture issues at Wausau’s City Hall first

Posted in Uncategorized on July 31, 2014 by Jim Rosenberg

Today’s announcement that Finance Director Maryanne Groat is receiving a 10-day unpaid suspension to be divvied out as essentially the equivalent of furlough days between now and the end of year is just the latest episode in a long-running series of issues at Wausau’s City Hall. There have been other casualties, including Public Works/Wausau Water Works head Brad Marquardt, who was invited to resign last month with six months of severance pay and health insurance.

The never-ending story with the still-unresolved Thomas Street project – for which the city lost millions in federal support – and the infamous no-bid bird art projects are a couple of things that figure prominently in the storyline, but they are symptoms of something larger. Last week, Mayor Tipple held a press conference to float the idea of switching from a mayoral to city administrator form of government.

There should be a hippocratic oath for governing: First, do no harm. I’ve tried to bite my tongue on this stuff, with mixed success. Since I served on the city council for six years with Mayor Linda Lawrence and six more with Mayor Jim Tipple, of course I have some opinions and insights. I also know the people involved personally and I’m not interested in poisoning relationships by making comments that would do little or nothing to improve the situation.

Regarding the idea of a city adminstrator, it might be a good idea – but that move alone will not fix the kinds of problems that we’re seeing. The current structure of our city government is fully capable of delivering efficient services. It has done so for Wausau in the past and it works elsewhere, too. So while I think it’s a great discussion to have, I’m not all that fond of pursuing it in an overriding context of simply trying to deal with current occupants of elected offices and staff positions in the city. It is also not the first or primary way in which to approach the challenges that we have. A city administrator is a strategy. Strategies are important, but culture eats strategy for lunch, as they say.

The problems we have at city hall are related to organizational culture. They are about the way the organization and its people behave right now.

So, how do you deal with that? First, simply recognize it. Then define it and then devise ways to improve. Forbes had an article on changing organizational culture by Steve Denning in July 2011. It had a great little graphic that I’ll share with you here. Note that the things we’re seeing in the media lately come from the bottom of the Inspiration-Information-Intimidation tool box. That’s the “power tools” part, where we keep the threats, coercion and punishments. But there are a lot of management and leadership tools that we should be looking at first; vision, role modeling, learning and more. They are at the very top for a reason.

Tools-for-changing-minds

A few years back in a conversation with Marathon County Administrator Brad Karger about organizational culture in the county, I suggested that the county look at a tool that Wisconsin Public Service was using, the Denison Organizational Culture Survey.

www.denisonconsulting.com/diagnostics/organizational-culture

Various factors are examined in four broad areas: Mission, Consistency, Adaptability and Involvement. The results map out organizational strengths and weaknesses, including comparisons with other organizations. They can be broken down to the department level and areas of focus for improvement can be readily identified. We did that in Marathon County and gained some valuable insight. More importantly, it shouldn’t be a one-time thing. By establishing a baseline, the organization can track its progress as it improves with subsequent surveys.

So here’s my free advice to the City of Wausau (and, as always, it’s worth every penny.)
1. Study your organizational culture with an objective tool.
2. Find and define the deficiencies.
3. Put together a plan to address the issues.
4. Measure your progress.

And if it is subsequently decided that a city administrator is needed to achieve excellence, then that is fine – but that doesn’t come first. Because altering the governance structure in the absence of an effective approach to dealing with the organization’s obvious cultural issues will do nothing but provide another person to point fingers at when failings persist.

Bon Vivance: France’s fight over factory food

Posted in Uncategorized on July 16, 2014 by Jim Rosenberg

?????????????????????????????

A few years back at an airport management conference, I was checking out the various vendors for everything from runway lights to bathroom fixtures and I came across one selling franchises for Indian restaurants. I thought this was kind of interesting, since not having a restaurant specializing in cuisine from India is something that is pointed out to me from time to time as a glaring amenity that is missing in Wausau. I didn’t think this particular offering would really fill the bill for us, since one of the virtues being touted about the brand was that nobody operating the restaurant would have to know how to cook.

I thought about that for a minute, since it sounded odd that somebody would find it to be strong selling point — that nobody in the restaurant would have to know how to prepare food. The more I thought about it, the more I realized that having restaurants where nobody knows how to cook may be more of a rule than an exception these days.
Think about it. We regularly go into restaurants and bars where there is a full menu offered consisting of items that take hours to prepare and we expect things to arrive piping hot on our plates in about 20 minutes, never thinking much about what is really involved in making that happen. (I make great baby back ribs, but if you want them for dinner tonight, you’re going to have to let me know by noon, at the very latest. I would need to find some shortcuts to make something like that work on a restaurant menu.) When it comes to franchises, we expect a consistent quality and uniformity to prevail in a way that would not be possible if anyone along the way was exercising even a modicum of creativity.

Simply put, a lot of our food is made in factories. General Tso’s chicken – a “Chinese” dish that was invented in North America and is essentially unheard of in China – is pretty much the same at any Chinese buffet around the country, just like the individually wrapped fortune cookies. We know that nobody is making hamburger patties at McDonald’s or cutting up potatoes in the back room. We pass Sysco, Rheinhart and Asian Foods trucks every day and we don’t think much about what it all means, but the fact is that a lot of “restaurants” are simply retailers of fully-prepared foods. The value that they add often consists almost entirely of keeping the place clean, creating some ambiance, plating the food, serving it and washing the dishes. Food factories enjoy an economy of scale in procuring their ingredients and the savings allow them to maintain competitive prices on products that significantly reduce labor costs at the heat-and-serve restaurant level.

I’m not necessarily knocking it, but once you start thinking about many restaurants as simply retail outlets for factory-produced food, you realize why you might get a quizzical look when you try to faithfully answer the question, “How was everything?” There is a good chance that anything you might mention is completely beyond the control of anyone in the building, since their role in preparing your meal is extremely limited. It would be like having a discussion about the finer points of seasoning with the guy handing you a hot dog from the concession stand window at the ball park or expecting the person who rings up your Twinkies at the C-store to be a pastry chef.

logo-housemade-french-restaurants
It is against this backdrop that France has begun a simple program to let people know if their food is actually being prepared in-house. France’s chefs are a very picky lot who live – and sometimes even die – by their Michelin Stars. Restaurants in France will now be able to add an official logo next to menu items that are made in-house. The “fait maison” logo was approved by the French government ‘to reign in the amount of processed foods used and to preserve France’s high gastronomical standing.’

Restaurants can label dishes as “homemade” even if the raw products have been frozen, refrigerated, cut up, ground, smoked, or peeled before being delivered to the restaurant. (The exception is potatoes and some have already complained that to meet the requirements, they will have to hire more staff to peel potatoes that they previously bought peeled and frozen. This being food and this being France, that is likely to be one of the more minor points (or small potatoes) in what is sure to be a continuing controversy over the initiative.) Pasta, bread, cheese and wine can also be used in “homemade” dishes.

It remains to be seen how all of this will play out on the plate, but if you’re going to have a food fight, you couldn’t pick a more appropriate battleground for it than France.

JR

The Hmong: arriving again, with Yee Leng Xiong.

Posted in Uncategorized on June 10, 2014 by Jim Rosenberg

Image

“The torch has been passed to a new generation…”

I had an interesting experience Saturday and it was a very big deal – but let me start at the beginning.

Last year, one of our University of Wisconsin-Marathon County students told me he wanted to run for the D.C. Everest School Board. At 19 years old, Yee Leng Xiong had an unusual combination of intelligence, humility and a desire to make a difference by serving. We went through the paperwork required to get on the ballot and he put together a campaign committee. I told him that almost everyone who ran for local offices such as city council, village board, county board, school board or township offices in our area ran “exempt” campaigns, meaning that they would spend less than $1,000 annually on getting elected. It was pretty much about dropping literature, knocking on doors and getting the word out.

If anything, I thought that a low-cost candidacy would be all the more likely for a college student, but I was wrong. Yee’s candidacy quickly gained legs within the Hmong community and soon, he needed to file campaign finance reports. Literature was printed and passed. He made a television ad:

https://www.youtube.com/watch?v=gpaCnnFb6QI

To make a long story short, Yee won a seat on the school board, edging out a 27-year incumbent by 81 votes. Many more than just Hmong people voted for him to make that happen. Of nearly 31,000 people living in the D.C. Everest District, only around 1,500 are Hmong.

The Hmong are a people and a culture, but they are not a nationality. They began arriving in the Wausau area in the late 1970s as refugees. Hmong had aided the U.S. in Southeast Asia during what is known as “The Secret War,” which was conducted in Laos and involved some 30,000 Hmong fighters under the command of Royal Lao Army General Vang Pao. The Hmong essentially faced extermination in Laos after the war for their collaboration with the U.S.; communists took over there at almost the exact same time as the fall of Saigon. A few were evacuated, but many more made a long and dangerous trek to Thailand on their own, often spending time in refugee camps until eventually being granted status to immigrate.

Adjusting to life in the U.S. took some time and there were growing pains for everyone involved. In April 1994, an article titled “The Ordeal of Immigration in Wausau” in the Atlantic magazine by Roy Beck – who would become executive director of the anti-immigration group NumbersUSA just a few years later in 1997 – put the Wausau areas struggles into the national spotlight:

http://www.theatlantic.com/past/politics/immigrat/beckf.htm

It was followed by a segment on the CBS news magazine program 60 Minutes. About the time all of this was going on, Yee Leng Xiong was born.

Today, 20 years after the turmoil described in The Atlantic and on 60 Minutes, things are much different. There had been a Hmong member of the Wausau City Council a few years back, but it had been a while. Yee is from a different generation that comprises primarily Hmong young people who have spent their entire lives in the United States. Getting started so young, he has plenty of time to grow into a larger role in the future, but it’s bigger than Yee. He is a paving a path not only for himself, but for others in the Hmong community going forward – and it’s something that was not lost on the people in attendance at Saturday’s celebration. A number of them had been refugees themselves. They long for their children and grandchildren to be successful and to flourish in the land that they suffered so many challenges and personal hardships to come to and make a life. Yee’s election is a powerful symbol of these deeply-held aspirations and because of that, he might as well have been elected governor.  As his accomplishment was feted Saturday, hundreds showed up at the Wausau Labor Temple to mark the occasion, from elderly to children.

I can tell you two things that apply to the Hmong celebrations that I am familiar with: they are long and it is not possible to overdress.

The doors opened at 1 p.m. and the event began an hour later. There were speakers, including Sen. Jerry Petrowski, County Administrator Brad Karger, D.C. Everest School Superintendent Dr. Kristine Gilmore and Phil Salamone, a fellow who had filed to run for school board, but then met Yee and told people they should vote for Yee – literally getting out of the way to help make Yee’s election more likely.  There were leaders of the Hmong community. There were performers and gifts. Tears of joy were shed. Yee was given an honorary membership in the United States Special Guerilla Unit by Major General Charle Hang, complete with a commemorative medal.

Image

As dinner approached, it was time for the Basi Khe Tes ceremony; the tying of the hands. Led by a shaman, the ritual included white strings which were part of large centerpiece of fruits, eggs and flowers. People took these and one by one, they tied them on to Yee’s wrists as they gave him their personal well wishes, blessings and advice. We ate some fruit kabobs and an elaborately prepared pig was removed from the head table following the ceremony so that it could be served for dinner, which had been carefully prepared and brought to the event. The night party followed.

Image

In all, it was more than 10 hours of celebration and ceremony, effectively forming a profound and poignant bridge between the past and the future. I’m not sure if anyone winning a seat on a school board has ever experienced a greater show of support and honor than Yee Leng Xiong did on Saturday, but it was bigger than politics and Yee or anyone else who was there. After beginning to arrive here more than three decades ago, the Hmong were beginning to arrive here in another way. The Hmong community’s decision to underline the significance of this and mark its historic nature was something that I was happy to be able to take in and to be a small part of. In the context of all that has preceded it, it was a very good idea to make a big deal out of it; good for them, good for Yee and good for all of us.

JR

What’s the ROI for waiving Wausau Center Mall fees?

Posted in Uncategorized on April 12, 2014 by Jim Rosenberg

Image

 

This from the April 9 edition of the Wausau Daily Herald:

“WAUSAU — The city is considering waiving rental and other fees totaling $146,000 for the owners of the struggling Wausau Center mall.

The city’s Finance and Economic Development committees unanimously recommended Tuesday that the city allow mall owner CBL & Associates Properties to forgo rent for one year, totaling $76,000, and another $70,000 in additional cash flow that would go to the city under terms of the lease between Wausau and CBL.

The full City Council will vote on the measure April 22.

CBL, which has leased property from the city since 1980, asked the city to waive the fees after learning JC Penney would be closing its doors in the mall as JC Penney’s corporate parent shutters 32 other stores across the country.

The agreement would require the company to pay $1 in rent for one year starting May 1.”

In other coverage in the Wausau Daily Herald, CBL, Sears, Younkers and J.C. Penney pay property taxes at the mall totaling about $992,000 annually, according to Economic Development Manager (and former Wausau Center mall manager) Megan Lawrence. They also have a parking lease for the ramps, for which they will pay $144,000 in 2014.

There is no question that the loss of an anchor tenant likes Penney’s in the Wausau Center mall is a big deal. On the other hand, I have no idea where that leaves CBL in the big picture with the Wausau Center mall. Does it mean they’re losing money — or just making less? But $1 in rent sounds pretty cheap and a year looks pretty long, (although filling or repurposing that much floor space is certainly a tall order and it could take even longer.)

“The risk of failure for a mall increases dramatically once you see anchor closures,” said Cedric Lachance, managing director of Green Street Advisors in a January article in Business Insider. “Their health is very important … and most of them are highly likely to continue closing stores.”

http://www.businessinsider.com/shopping-malls-are-going-extinct-2014-1#ixzz2yfTuOQBq

So does an agreement like the one being contemplated by the City of Wausau make sense in a dynamic environment, where some of the writing may already be on the mall wall?  Should taxpayers be

providing an operating subsidy to a $3.1 billion corporation to commence at the moment that Penney’s moves out? Without some offsetting consideration, it just looks like another attempt by a business to socialize some lost income, while continuing to assure that profits are unfailingly privatized. Heads, they win and tails, you lose.

What might a counteroffer look like? Well, if you’re anybody else investing in CBL Properties, you get something for your money besides the knowledge that you’re doing what you can to keep a huge presence in your downtown from failing.  CBL & Associates Properties Inc. is a Real Estate Investment Trust for which between two and three million shares trade daily on the New York Stock Exchange. It pays a dividend of nearly five and a half percent; fairly lofty — but it also sells for 66 times earnings, which is really lofty. It’s a company with substantial assets and more than $1 billion in annual revenue.  Of 18 analysts rating the stock, four said to buy it, 12 said to hold it and two recommended selling it. The accommodation being requested by CBL from the City of Wausau is around one-fourth of the annual base salary of the company’s CEO, whose family owns many millions of shares. Besides his father, the chairman of the board, other big investors include Vanguard, T. Rowe Price and BlackRock. These are not charities.

And by the way, this is nothing against CBL, which appears to be an extremely solid and ethical operator. As they say in the Godfather, this is just business – but that doesn’t mean CBL’s offer is one that we can’t refuse, (or modify.)

If the city is putting up money for CBL, then the city needs to honor its fiduciary responsibility to its citizens and not just give funds to a corporate entity with no hope or mechanism for a tangible return because somebody happened to have the audacity to ask for it.

 

Here are some things to think about:

  1.  Do not enter into a one-year agreement for $1. If there is to be a waiver, a better approach would be a shorter agreement – say, six months — that can be extended and modified, as necessary. The city is planning to hire a consultant to deal with the Wausau Center Mall issue. Why bring that expert advisor on board AFTER cutting a one-year deal, when all of the leverage has already been deferred until May 2015? If we don’t have anything for our consultant to do, then let’s not get one until we do.

 

  1. We need more than talk about how important the mall is to our city, how everyone enjoys indirect benefits from its presence, or how the city’s relationship with the mall is unique. At present value, the city’s contribution to CBL over the coming 12 months would be an amount equal to 8,150 shares of CBL stock. While it involves risk, it’s far superior to just kissing the money goodbye in a giveaway. Having the city receive an equity stake equal to the average cost for each month of the waiver treats taxpayers fairly and gives them an opportunity for a direct return on their investment. It also sets up a far more defensible precedent for the activity and that is important, since CBL isn’t the only distressed property owner out there.  It requires city leaders to treat the city’s investment as exactly that: an investment; not a donation. Make no mistake that the money being waived will be coming directly out of the city’s general fund and that it was already committed to other things in the current budget before this topic came up. The benefits to taxpayers should have the possibility of being just as direct, substantial and measurable as they are to CBL. A city-underwritten micro Troubled Asset Relief Plan for the mall with no prospect for recoupment and no strings attached doesn’t do that. (By the way, when the federal government became involved in saving automakers, banks and insurers, the feds took equity stakes that enabled recovery of a lot of that outlay for the taxpayers.)

 

  1. Providing an operating subsidy via fee waivers inherently reduces pressure on CBL to fill the space. Yes, vacant space of this magnitude can be pretty toxic – but if you’re an accountant in Chattanooga, it may not seem nearly as toxic to you, so long as the money is green. Perhaps if the city wants to reinvest this money in the Wausau Center operation, the funds should continue to be collected and set aside in a separate fund administered for that purpose so that there is some oversight over these public dollars, some criteria for its use and some delineation of expected outcomes. I’m not seeing that with this deal. Instead, I’m seeing what are now public dollars in a revenue stream being waived and essentially turning them into private dollars (by altering the agreement and never letting them become public dollars.) Once the city stops collecting the fees, then that is the status quo.

 

  1. Understand that regardless of what we do, the end game may well be eventual redevelopment of mall. If that occurs, it will almost certainly be the result of a combination of factors extending far beyond prevailing economic conditions in Wausau and some local fee waivers for CBL.

Port Plaza demolition

(Above: Opened in 1977, Green Bay’s Port Plaza Mall, later known as Washington Commons, was demolished in April 2012.)

Earlier this month, the Milwaukee Journal-Sentinel reported that Milwaukee City Council voted to provide a $1.2 million subsidy to its downtown Boston Store, which is losing about $600,000 annually. In return, Bon-Ton Stores Inc. will keep the department store, with about 100 jobs, open through at least January 2018, extending the existing lease by three years. The company also will maintain its downtown Milwaukee corporate offices, with about 650 jobs, through January 2018. All told, the company operates 270 stores in 25 states, but only nine of them are downtown stores. The company lost $3.6 million last year, following a loss of $21.6 million in 2012.

Ald. Bob Bauman, whose district includes downtown, said he supported the proposal in part because it’s important to keep the Bon-Ton corporate jobs. But Bauman also said he had reservations about the financing plan.

“We’ve never subsidized operating losses before. Now, we are,” Bauman said.

JR

UPDATE:  Wausau Center Mall owner CBL to sell 21 properties:

http://timesfreepress.com/news/2014/apr/12/chattanooga-based-cbl-to-sell-21-shopping-centers/

Motley Fool on CBL stock:

http://www.fool.com/investing/general/2014/04/18/3-dividend-paying-stocks-lets-go-shopping-for-mall.aspx

UPDATE: City agrees to $755K package for CBL over 5 years, with conditions:

http://www.wausaudailyherald.com/article/20140527/WDH01/305270385/Updated-City-gives-mall-755-000-relief-incentives

 

 

 

Wausau School Board race: Vote for Leigh, Henning and Trollop

Posted in Uncategorized on March 13, 2014 by Jim Rosenberg

People are always asking me who I’m planning to vote for, so I’m going to tell you. When I was in Madison, I appreciated the no-nonsense, homespun campaign literature that I received at my door. No long, wordy, policy statements. No “kind to animals and a member of the safety patrol.” No testimonials. Just a straight up or down recommendation from whoever was making it and you could judge it by the source. So here is my take for Wausau School Board.

There are three candidates that you should vote for. They understand and support quality public education:

- Jeff Leigh

- Yvonne Vonnie Henning

- Lance R. Trollop

There are three candidates being supported by the far right, a point of view that is already well-represented on the Wausau School Board. You may even get another Americans for Prosperity mailing supporting these folks, but regardless, they have been formally endorsed by the Wausau Tea Party.

Image

- Chad Dennis

- A.J. Gordon

- Mary Kowatch

The election is Tuesday, April 1. You need to vote.

JR

UPDATE: Leigh, Henning and Trollop all won election and the Tea Party slate lost by a large margin.

 

Follow

Get every new post delivered to your Inbox.

Join 34 other followers