Closure of Johnson Controls facility costing 277 jobs, and also, $1M worth of YOUR tax dollars
GLENDALE -- Johnson Controls is closing its "Milwaukee Business Center" on N. Lydell Avenue, and that means 277 people will be out of a job. FOX6 News has learned your tax dollars may have gone down the drain as well.
The closure will impact 277 employees between January 26th and June 30th, 2016.
FOX6 News has learned there may be more people losing out as a result of this announcement than just these workers.
Since 2014, Johnson Controls has received more than $2.5 million of your tax dollars.
The Wisconsin Economic Development Corporation (WEDC) awarded the company millions of dollars in tax credits. Some of the money went to rehabilitate a historic building, and create jobs at Johnson Controls' Glendale headquarters.
According to WEDC officials, $1 million was handed over for new jobs at the Milwaukee Business Center -- the center that's now set to close.
"It's not necessarily this company's fault to take advantage of an administration that`s throwing money around like a drunk guy at bar close," Senator Chris Larson (D-Milwaukee) said.
Senator Larson says taxpayers likely just lost $1 million.
He says there's little power for the state when it comes to getting tax credit money back.
WEDC officials disagree -- saying in a statement, in part:
"All companies failing to fulfill contractual obligations are subject to penalties, which may include clawbacks or denial of tax credit claims."
"It`s not really a clawback. It`s more like a kitten-paw-back. The money is not going to come! It`s out the door. They didn`t put any teeth in this provision," Senator Larson said.
Larson says the best shot for taxpayers getting their money back would be for the company to agree on its own to return that money.
FOX6 News reached out to Governor Scott Walker's office and Johnson Controls officials for comment -- but we didn't hear back.
A Johnson Controls spokesman told a Madison television station they are "reviewing our agreement with the state of Wisconsin to determine our next steps."
Below is the full statement from WEDC officials to FOX6 News:
There are three different WEDC awards to Johnson Controls Inc.
1) JCI was awarded $275,871 in Historic Preservation Tax credits to rehab their building at 507 East Michigan St. in Milwaukee. That building was constructed in 1902. To date, JCI has spent over $1.3 million on the rehab.
2) JCI was awarded $2.5 million in Economic Development Tax Credits to invest over $42 million, retain 987 jobs, and create 329 new positions at their headquarters in Glendale. On September 30, JCI submitted a performance report current through May 31, 2015. JCI reported they have invested over $42 million, maintained 987 jobs and created 280 jobs. To date, JCI has earned $1,466,800 of credits for job creation.
3) JCI was awarded $1 million in Economic Development Tax Credits to create at least 167 jobs at the 5055 N Lydell Avenue location. On September 30, JCI submitted a performance report current through May 31, 2015. JCI reported they have invested over $200,000, maintained 304 jobs, and created 266 jobs. Because they met their contract deliverable of initially creating 167 jobs, the company has earned $1,000,000 in credits.
All WEDC Economic Development Tax Credit contracts, including JCI’s, require the company to maintain existing and new full time positions for which tax credits have been verified. WEDC has reached out to JCI and will work with the company to understand how the layoffs effect their Wisconsin operations and the potential impact on their existing contracts. All companies failing to fulfill contractual obligations are subject to penalties, which may include clawbacks or denial of tax credit claims.