TREADING WATER

Beer made Milwaukee famous. Can water quality keep the legacy alive?

Wisconsin city touting water quality to fuel economic growth

Zurn, a company that produces valves and drains for commercial use, relocated its headquarters, shown here in March, from Erie, Pa., to Milwaukee, Wis., in 2016. Milwaukee officials cite Zurn as an example of economic growth spurred by a community focus on water technology and enterprise. (Erin Jordan/The Gazette)
Zurn, a company that produces valves and drains for commercial use, relocated its headquarters, shown here in March, from Erie, Pa., to Milwaukee, Wis., in 2016. Milwaukee officials cite Zurn as an example of economic growth spurred by a community focus on water technology and enterprise. (Erin Jordan/The Gazette)
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MILWAUKEE, Wis. — Early beer brewers in Milwaukee drew fresh water from the Menomonee, Kinnickinnic and Milwaukee rivers as well as nearby Lake Michigan.

Now the city of nearly 600,000 is trying to turn that brewing legacy of easy access to clean water into an economic engine, with leaders touting the western shores of Lake Michigan as the “fresh coast” and the “Silicon Valley of water.”

Is this just branding or has the city truly found a way to have clean water fuel its economy?

“We were the first to move forward on this effort,” said Dean Amhaus, president and chief executive officer of the Water Council, a Milwaukee nonprofit that aims to unite businesses specializing in water technology and to advance regional economic development around water quality. “There are others in the United States that try to compete and it’s hard for them because they don’t have that historical standpoint.”

In 2007, leaders at Wisconsin-based companies AO Smith, a water heater manufacturer, and Badger Meter, which builds products to measure and control water flow, recognized an opportunity to unify economic interests around water tech — an effort that gave rise to the Water Council.

The Water Council now serves as an economic hub for water tech firms, helping research and development and partnering with over 230 businesses. Its business incubator, called the BREW accelerator, has trained 34 start-ups and raised $10 million in capital since 2013.

Historical filter

Clean water has been a significant driver of Milwaukee’s economic development throughout its history through beer brewing and other “wet industries” like leather tanning.

“It was the trading that brought folks here, but it’s the water that kept them,” said Rocky Marcoux, commissioner of the department of city development.

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But Milwaukee endured the worst waterborne illness outbreak in U.S. history in April 1993, when chlorine-resistant Cryptosporidium — due to contamination at a water treatment plant — sickened more than 400,000 people.

Cryptosporidiosis, an infection that causes diarrhea in most victims but can be deadly for those with compromised immune systems, caused more than 100 deaths, over 4,000 hospitalizations, 77 business closures and at least $96 million in illness and productivity losses during Milwaukee’s crisis.

“I got it five days before the season started, and I didn’t know what I had,” said Bob Koehler, a Milwaukeean who’s an avid fan of Milwaukee Brewers baseball.

Koehler, who was 35 at the time of the 1993 outbreak, believes he contracted cryptosporidiosis from drinking tap water at his parents’ house.

Now 61, he’s recognized locally for having not missed a home game in decades — though he came close in 1993.

“I wanted to get to the game so I didn’t eat for three days,” Koehler recalled. He said that not eating would help him get to the game and stay in his seat, avoiding the bathroom. Koehler made it through that season opener without a bathroom visit, and said he recovered from cryptosporidiosis a day later.

In the wake of the Cryptosporidium crisis, Milwaukee Water Works upgraded both its water treatment facilities and introduced ozone, a highly reactive gas that kills microorganisms and is more potent than chlorine. The upgrades cost $89 million.

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“We have some of the best drinking water in the United States, but part of that was because we had a crisis,” Marcoux said.

Building on water

Part of Milwaukee’s global water hub initiative has been to support up-and-coming water tech companies in the region and recruit others to the area.

Rexnord, a Milwaukee-based manufacturer specializing in water and other industrial technologies, relocated one of its companies, Zurn Industries, from Erie, Pa., to Milwaukee in 2016. Zurn’s new headquarters — a $15 million, 52,000-square-foot development in Milwaukee’s Walker’s Point neighborhood — staffs more than 100 employees, with many others scattered across the United States and international sites.

“Zurn relocated here to be part of the thought leadership around water tech,” said Eric Loferski, marketing director at Zurn, a company that makes products including valves for toilets.

Wisconsin invested more than $400 million in real estate in Walker’s Point between 2010 and 2018, according to a University of Wisconsin- Milwaukee study, with much of the public funding supporting Water Council projects.

This includes $53 million for a UW-Milwaukee School of Freshwater Sciences. Other public money includes $2.5 million from the Wisconsin Economic Development Corp. for brownfield cleanup and an idle sites program in the Walker’s Point neighborhood.

The state agency also underwrites, at about $200,000 a year, space in the center for the BREW business incubator and a coworking space.

By bringing together entrepreneurs, scientists, business experts and investors, the state economic development group is hoping to bring more ideas to market, said Cate Rahmlow, sector strategy director.

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Rexnord will get $2 million in state tax credits through 2021 if Zurn creates 120 full-time jobs at its new headquarters. So far, the company has met annual targets set by the state, the Economic Development Corp. said.

Questioning growth

Milwaukee may want to focus attention on growth of water-related industry, but some critics suggest it’s more about branding than actual economic expansion.

“There’s some reality to some of it,” said Marc Levine, professor of history and economic development at UW-Milwaukee. “But it has been grossly exaggerated as a driver of the local economy or as something that is in any way particularly unique to Milwaukee.”

Milwaukee’s water-related businesses have clustered together to advance their collective economic interests, Levine said. Advantages of clustering include creating and sustaining a labor market in the area.

Levine noted there have been at least 20 other areas of the country that had similar proliferation of water-related companies and research and development efforts.

Amhaus, the Water Council’s president, acknowledged it is hard to calculate growth in the water technology sector. It doesn’t have its own North American Industry Classification System code, so its hard to collect statistical data about related companies. Water Council member businesses fall into several industries, making it challenging to estimate the economic impact.

Another problem is that many of these businesses are private companies not required to publicly disclose some aspects of their economic contributions.

Future plans

Milwaukee, which has a lot riding on its clean water reputation, is facing some of the same challenges as other major cities.

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Local movements Freshwater for Life Action Coalition and the Get the Lead Out Coalition recently addressed city government about lead in Milwaukee’s water. The groups assert the city’s partial replacement of water mains has caused the presence of lead to spike in drinking water — which may be a cause of increased infant mortality in some neighborhoods.

Milwaukee’s water treatment facilities also are on guard for trace pharmaceuticals, such as birth control hormones and antibiotics, that end up in the water supply, Marcoux said.

The Water Council’s strategic plan through 2021 includes establishing a Freshwater University by 2020 in part to connect talent with internships and hiring opportunities.

“I believe we’re destined to be the global water leader,” Marcoux said. “There’s a little hyperbole in that right now, but I think 20 years from now people will look worldwide to Milwaukee as one of the global hubs of water technology.”

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