Tom Kertscher writes about MATC and its new business incubator program in the January 20th Journal Sentinel. It seems that the only press MATC can get is 'bad' press. And they seem to get better and better at that.
The article goes into the MATC's two urban business centers. They have taken over old industrial building space and have rented that space in small increments to new businesses at very low rent cost. The idea of business incubators, as the name suggests, is to enable them to mature in a protected environment until they're self-sufficient and can move out into the real world bringing jobs to the community. Few of these businesses have reached the point of self-sufficiency which is not uncommon with new businesses. Many more fail than succeed no matter where they start.
As Kertscher drilled down, however, we began to see the MATC we've grown to know and 'love'. There are 98 tenants in the two locations. The average incubator period nationwide is three years. 80% of those in the MATC locations have gone on longer than that. Interestingly, the wife of State Senator Spencer Coggs (D-Milwaukee) whose name is Gershia Coggs, has been in the incubator for more than 20 years. Her husband is also a tenant and rents space to store his personal and campaign materials for $55 per month. That doesn't sound like a new business start-up situation.
17 of the MATC's tenants have stayed in their incubator space for more than a decade, including Mrs. Coggs. More than 40% of the tenants are behind on their rent payments to MATC for a total of more than $80,000. One tenant is three years behind in its rent payments but is still housed in the incubator receiving heat and electricity in addition to the space. 25% of the tenants are not even businesses such as Sen. Coggs. These are comprised of social service agencies and other non-profit organizations.
MATC is losing some $125,000 per year on the incubators and guess what? This is such a good deal that they are planning another investment of $4,000,000 to improve one of the two incubator locations. That sounds exactly like something a real business would do, huh? Pump more money into a losing proposition? Only if it is taxpayer money, I guess. Except that MATC is going to try to get grant money to cover part of the cost. Apparently grant money grows on grant money trees that cost no one anything.
Of course, there is the potential that jobs would be created, so maybe that is the mitigating factor here? There is no way to tell because MATC doesn't track the number of jobs that have been created. MATC says it doesn't have enough people to be able to track this. On top of that, the two people within MATC charged with the responsibility for this program admit they can't think of any 'recent' success stories where a tenant actually got on its feet and moved out into the real world.
MATC's spokesman, Jim Gribble, is quoted in this article as saying that allowing tenants a grace period on paying rents is favorable to evicting them because then MATC would collect less rent. That statement sums up many of the problems that MATC has. Here is an institution that plows through taxpayer money like there is no end to it (and so far there has been no end to it), and somehow convinces itself that it is better to continue to give its space away to non-paying tenants because MATC will collect more rent.
I sincerely hope MATC is not offering accounting or economics classes for future business people using that logic. By the way, one of the tenants is an economics instructor at MATC and runs his business in one of the incubators. He indicates that his business isn't likely to employ anyone else for some time. He sculpts items from driftwood, has been in business since September 2004 and has yet to sell anything he has created.
This is the kind of story that one wouldn't believe if it were published as fiction. It is simply too far-fetched. It demands too great a stretch of one's imagination. But, again we're reminded that this is MATC and nothing should be viewed with disbelief simply because it is nonsensical.
View the whole article here.
