This post originally appeared at https://www.wisconsinrightnow.com/the-rock-refused-to-meet-community-benefits-requirements/
The Rock’s developer refused to make a “good faith” effort to meet community benefits requirements and goals that were outlined in the 2018 development agreement between Milwaukee County and the developer, documents obtained by Wisconsin Right Now show.
However, the development agreement doesn’t have much teeth, so all the county could do was make the Rock forfeit $10,000 and ban the developer from working on county projects for three years, the documents reveal.
In August 2023, an update to a 2021 Milwaukee County audit revealed that the “developer has submitted letter to the county demonstrating their intent to provide no further community benefits reporting and has agreed to forfeit their $10,000 deposit and forgo doing business with Milwaukee County for three years.”
The community benefits angle comes as several county supervisors said in a committee meeting last week that they want Milwaukee County to consider legal action against the Rock because of long-standing and unresolved noise concerns with nearby residential neighborhoods.
The Rock’s developer, Mike Zimmerman, told Wisconsin Right Now that the supervisors were acting emotionally. He said any legal action could end up being costly for them and the county. “On the surface, it would appear frivolous, emotional, and out of the jurisdiction they have,” he said of the “legal threats.”
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An audit update presented to county supervisors in August 2023, as well as a letter from the developer and the county’s corporation counsel’s office, all make it clear that the Rock has decided to stop trying to meet the community benefit requirements, which are designed to encourage minority and female representation through contracts, or, as the County’s website puts it, are designed to make sure all “are afforded a level playing field in participating on all Milwaukee County procurement contracts.”
In the past, the Rock showed good faith effort by doing things like communicating with minority Chambers of Commerce, but now the developer is refusing to try to meet those goals, documents reveal.
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A Feb. 17, 2023, memo from the Milwaukee County Corporation’s Office to the Milwaukee County Board Audit Committee and “interested stakeholders” outlined the county’s options.
On Sept. 14, 2022, the audit committee referred a file to the Office of Corporation Counsel to determine “what, if any, contractual remedies may be available to Milwaukee County related to the alleged failure of BPC County Land LLC to comply with the Targeted Business Enterprise (TBE) and workforce participation goals.” Together those are referred to as “community benefits requirements.”
BPC is the company behind the Rock, which is run by developer Mike Zimmerman. We reached out to him for comment on the TBE question and did not hear back.
The goals were listed in a 2018 development agreement between the County and the developer.
The corporation counsel said the County is limited by the agreement to damages totaling $10,000 and “the ability to bar the developer from future county projects for a period of three years.”
The counsel’s office said other remedies ”likely remain available for other breaches of the agreement.”
According to the letter, the agreement required the developer to “utilize good faith efforts to achieve” certain minimum TBE participation goals and performance of a target number of on-site construction hours by “apprentices or members of acceptable job training programs.”
The community benefits requirements were supposed to be monitored through information the developer submitted through county-provided online portals.
On May 13, 2022, ROC Ventures wrote a letter to Milwaukee County’s Director of Economic Development Calli Berg. Berg is the former Franklin Director of Economic Development. Zimmerman is owner and chief executive officer of ROC Ventures.
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The letter is signed by Thomas Johns, the CFO of Roc Ventures, LLC. It says: “This memo is meant to notify you that ROCK Ventures is no longer participating in Milwaukee County’s TBE program. In the first phases of the development, we put forth a good faith effort. We hired Carla Cross, of Cross Management to monitor our efforts and report back to the County. She presented the attached report at the July 15, 2019 ECD meeting.”
The Johns letter continues: “Milwaukee County staff failed to take into consideration this report and what construction costs should be excluded from the calculations and ever since the narrative being spun by members of the Board has been extremely negative. As a result, we feel that the program is not worth our investment and we will accept the penalties.”
In February 2023, a letter was sent “confirming that developer is in breach and notifying them of the forfeiture of their deposit and ban from working on county projects for three years.”
In April 2022, the county noted the developer “has not provided any further reporting on their community benefits goals” and noted the county “has been informally informed they do not plan to provide any further reporting.”
In August 2021, in an audit response, the Milwaukee County Economic Development office sent a letter to the Rock developer to encourage them to fulfill reporting obligations related to the development projects.
“However the developer has proven non-communicative and has not yet submitted any further reporting on past, current or future projects,” the documents say.
According to a 2021 Milwaukee County audit, the Rock’s total hours and earnings reflected lower percentages of American Indians, blacks, Asians, and Hispanics than their percentages of the Milwaukee County population. However, the percentages are not requirements.
Whites made up 86.8% of earnings and 77.4% of total hours, but are 50.6% of Milwaukee County’s population.
Blacks had 2.4% of total earnings and 2.9% of total hours when they are 27.2% of Milwaukee County’s population, the audit says.
Hispanics are 5% of total earnings and 9.4% percent of total hours but are 15.6% of Milwaukee County’s population, it adds.
The audit said there were 803 people who worked on the project, of which 69% were white, compared to just over 50% of the population.
There were 41 blacks, who were 5.1% of the total but 27.2% of the population.
Three Asians, 92 Hispanics and 9 American Indians rounded out the total.
Milwaukee County’s population is 51% female, but women were less than 1 percent of all earnings and hours listed for the projects. Of the 803 people included on the payroll records, 12 were females, the audit says.
The audit says the development agreement established the improvements that must be constructed or installed to maintain compliance with the sale, and it included the community benefits compliance plan.
The community benefit goals include ensuring targeted business enterprises have an equal opportunity to receive and participate in the construction of the projects and the use of apprenticeship/training opportunities.
They required a good faith effort to achieve the goal of at least 10% of on-site construction hours to be completed by apprentices or members of acceptable job training programs.
A minimum of 25% TBE participation for hard construction costs and a minimum of 17% TBE participation for professional services costs were goals.
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The developer needed to do things like use a public process to solicit bids, contact the minority chambers of commerce with the submittal information, meet with community business development partners, and hold pre-bid meetings with TBE firms, to show a good faith effort.
In 2019, the County wrote the Rock that it was “trending toward non-compliance of community development goals,” and the Rock detailed its actions to provide a good faith effort at that time.
The Rock had dropped off full printed plans at all five minority chambers of commerce or contractor associations, among other attempts.
Jessica McBride 38 Jim Piwowarczyk
Amy Hemmer
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