May 18, 2009

Summary of SC Johnson tax-exempt stories

We've written a few thousand words about SC Johnson's Administration Building, Research Tower and roughly half of its new $39 million Project Honor going tax-exempt thanks to an executive order from Gov. Jim Doyle and a deal with former Mayor Gary Becker.

Here's a timeline of our stories:
  • First, we reported SC Johnson's Frank Lloyd Wright-designed Administration Building and Research Tower were exempt from property taxes. That turns out to be about $40,000 per year.
  • Then, we learned that Becker and SC Johnson made a deal. SCJ gets the tax-exempt status and Becker gets $500,000 over five years for Uptown. (We filed a records request with the city to gain documents surrounding this deal, but are still waiting to hear back from the city attorney's office.)
  • SC Johnson responded to our story noting it was still expected to contribute $166,942 in property taxes from the new Project Honor to the city's Uptown tax incremental district. The money will be used to rebuild streets and buildings.
  • We then reviewed SCJ's Project Honor building permit and found the project was expected to cost $39 million to build. The company then estimated it expected to save between $150,000 and $200,000 in property taxes for Fortaleza Hall, the tax-exempt portion of Project Honor that will honor the late Sam Johnson.
That brings us up to today (when WTMJ's Charlie Sykes credited us with a "flagrant act of journalism"). Neither Mayor Tom Friedel nor Mayor-elect John Dickert returned our calls on this situation. It's not surprising. Little can be done to reverse the governor's executive order, and maybe nothing should be done. SCJ is a pillar to Racine's economy and a great local employer.

Our concern with these stories was Becker's backroom dealings. Decisions like this should go before the Common Council and get a public airing before they're finalized. No doubt SCJ and Becker could have made a strong case for approving the tax-exempt properties and moving forward with Uptown. But the fact that they never made that case suggests they knew they some would raise objections - and possibly nix the deal.

I do believe SCJ is getting unfairly tarnished in the comments. It's a good, smart company that makes good, shrewd business decisions. They found a state law that applied to their property and they used it to save money. It's those decisions that will, hopefully, keep local residents employed for years to come.

Becker should be taking heat here, but the former mayor's reputation is so in tatters that a questionable tax deal seems hardly worth mentioning. Let's hope Mayor Dickert and our new cast of city leaders know enough to conduct these deals in the open, if only to minimize the suspicion.


  1. I find it hard to believe that SCJ would make a backroom deal.
    The risk of it coming out into the public is too high nowadays.
    Though we may never find out the true negotiations that went on, I tend to think it wasn't simply pay-to-play.

  2. I said it before and now again....SC Johnson Wax does nice things but NEVER without getting in return.

  3. Dickert will be making these exact same shady secret deals (perhaps not with SCJ) once he's in office also. Just watch and see.

  4. It is of enormous value to have those Frank Lloyd Wright buildings in Racine, and the fact that Johnson Wax maintains them at very great expense is service enough to the community, undoubtedly exceeding the dollar amount they would pay in property tax on the properties in question. I can tell you as a Racinian (not a J-Wax person) who has lived in multiple cities on the East Coast, and also in England, that everywhere I have lived I meet people who say "Oh, you're from Racine! I've been there. I went there to see the Frank Lloyd Wright buildings." Not only is that great PR for the city (how many other mid-size Midwestern cities are recognizable at all, or in any positive way, to people living thousands of miles away?) it's generates a certain amount of tourist revenue for local businesses.

  5. It isn't so much what was done as it is HOW it was done.

  6. My father was a small manufacturing business owner on Racine's south side for 40 years. He was born on the south side and stayed there.

    Like my father used to say regarding the Johnson Company: "they had a lot, so they could give a lot; but they never gave more per % of profits as any small business; it just so happened that Johnson's profits were huge. We love the rich guy more than the little poor neighbor, even if both give as the same percentage of profits to charity"

  7. The buildings are great. Yes people want to see them. They need to come here. But, the manipulation and demands they place on the peasants around the castle is going to cause a revolt.

  8. TaxedTooMuch5/19/2009 4:23 PM

    I don't believe Johnson's is as squeaky clean as many purport it to be, but that isn't the real issue here. How the meetings were handled was probably more Becker's fault than Johnson's (it seems to be more his SOP than Johnson's). But, that isn't the real issue either.

    The real issue is that if the city is going to lose up to $200,000.00 in property taxed annually from Johnson's, where is the city going to make up that loss? You know the answer to that as well as I do: from us, the property owners and taxpayer here in Racine!

    Thanks Gov. Doyle for sticking it to us again. Oh, and we do need to keep an eagle eye on Dickert. After his real estate dealings I certainly would not put it past him to make backroom deals with anyone.

  9. The truth be told, S.C. Johnson actually projects to save at least $500,000 to $600,000 A YEAR from the tax exemption of Project Honor and the Frank Lloyd Wright buildings.

    This is not coming out in the story, but I know it to be fact. Also, I know it to be fact that there was indeed a pay to play here between SC Johnson and Becker. The City of Racine lost out on this deal big time and remember how the property tax works. SC Johnson received a tax exemption - that means every other property taxpayer in the City of Racine will be paying more tax to make up for the exemption given to SC Johnson. Why is corporate welfare going to one of the most successful company's in the country when ordinary taxpayers in the City of Racine are lucky to afford to remain in their houses the way it is.

    This is reverse Welfare. Were is everyone that complained about Welfare to people to sit around and do nothing? It is now ok for all of us to pay more property tax so a big profitable company can make even more profits? When will the Johnon's have enough? They now need to take from the mouths of the working poor so they can make yet even more. Someone has pointed out that SC Johnson then gives "back" to the community. I see, so we pay more tax so SC Johnson can be more profitable and give back 5% of these additional profits in the form of so called charitable contributions. It seems to me that the taxpayers of Racine are still down 95%