By Tom Daykin of the Journal Sentinel
The neighborhood surrounding Eaton Corp.’s offices on Milwaukee’s north side is poor.
Its poverty rate was nearly 23% and its unemployment rate around 13% in 2000, reflecting that year’s census data. Given more recent economic turmoil, those percentages probably will be higher when 2010 census data becomes available. The average neighborhood home is worth $81,400, compared with the citywide average of $139,600, according to assessment records.
The area around the Milwaukee County Research Park in Wauwatosa is defined by new office buildings and the nearby Milwaukee Regional Medical Complex, home to Froedtert Hospital, Children’s Hospital of Wisconsin, the Medical College of Wisconsin and other health care providers. Most of the nearby houses along Wisconsin Ave. have assessed values ranging from $160,000 to more than $200,000.
So, why does the financing plan for Eaton’s proposed new building at the research park include $20 million in federal tax credits that are supposed to encourage investment in neighborhoods that need help?
The answer lies in the unusual nature of the census tract that includes the research park.
In the 2000 census, it held 332 residents. The incomes of just five of those people were counted to determine whether the tract qualified for the federal government’s New Markets Tax Credits program.
“It’s one of those odd tracts,” said William Luecht, a spokesman for the U.S. Treasury Department, which oversees the program. “We don’t see this very often.”
People who live in that census tract are residents of long-term care facilities at the regional medical complex, operated by Milwaukee County’s mental health services division. In the 2000 census, all but five of the tract’s 332 residents were classified as “institutionalized,” Luecht said.
Under federal rules, the incomes and job status of institutionalized residents cannot be counted in determining whether a tract has high enough poverty or unemployment rates to qualify for the tax credits, Luecht said. Instead, the incomes of just the five non-institutionalized residents were tabulated – resulting in a 100% poverty rate, he said.