Reality Check: Vacant lot deal in dispute in governor’s race

Federal government says deal was issued in error
Reality Check: Vacant lot deal in dispute in governor’s race

A vacant lot in Kenosha County is at the center of the 2014 race for governor.

The latest ad from Gov. Scott Walker centers on property in Pleasant Prairie, and whether a deal his Democratic challenger Mary Burke made in 2006 was a wise one.

“As Jim Doyle’s commerce secretary, Mary Burke spent $12.5 million to buy a vacant lot for a company that said it had no plans to create jobs in Wisconsin,” the ad says.

News 3 finds this is true. Burke said after an event Tuesday, that the deal was a long-term investment using a federal block grant to bring health care company Abbott Labs to Wisconsin.

“It was a great opportunity to the state,” Burke said. “You don’t often get a chance to have a Fortune 500 company locate a corporate headquarters in Wisconsin, and Abbott bought over 400 acres of land in anticipation of a possible long-term development, and we were happy to support that.”

News reports on the deal at the time reported that Abbott had purchased the land, but had no immediate plans to develop the property. But Burke claims there are still provisions for the state to get its money back.

“The deal, if you look at the paperwork, certainly has clawback provisions if it doesn’t go forward,” Burke said Tuesday.

Walker, answering questions after an event in Oregon, differed on that count saying that no jobs had been created and the state alone was on the hook for the money.

“They didn’t do a claw back,” Walker said. “They didn’t put provisions in. We do now through WEDC, we put clawbacks in there, but this was without conditions like that.”

News 3 finds this needs clarification.

The Commerce Department sent $12.5 million to the Kenosha Area Business Alliance to buy property alongside Abbott’s larger purchase to keep the land together for a possible development. Abbott was not included in the agreement. The agreement shows that if Abbott did not create a minimum of 2,400 jobs by 2016, the business alliance would have to sell the land at fair market value and pay that money back to the state. But, the agreement never legally required Abbott to do anything.

The state also released documents Tuesday showing the federal government said the entire deal was issued in error and wants all its money back. The Federal Department of Housing and Urban Development said the deal met no “national objective” of job creation and last August asked for money back in 60 days. The state said Tuesday it notified HUD it would pay the money back sometime next year.

An email from a Burke spokesman said she disagrees with HUD’s finding and would challenge it as governor.