Sweet Water Organics – job creators?

In 2011, Sweet Water Organics, an aquaponic fish and vegetable farm located in Bay View, received a $250,000 forgivable loan from the City of Milwaukee. Under the terms of the loan, if Sweet Water Organics (SWO) employs 10 people by 2012, 21 by 2013, 35 by 2014, and 45 by 2015, the loan will be forgiven. If Sweet Water fails to meet those job creation goals, the loan must be repaid with 5-percent interest.

At the time the loan was being considered, Sweet Water’s president and cofounder Josh Fraundorf said, “Our goal is to continue to expand because we can’t produce enough,” Fraundorf said. “We get a premium for our produce. Our demand is such we need to expand our capacity.” At the time Milwaukee Alderman Tony Zielinski (pictured, left) had high praise for Sweet Water’s loan, calling is support for the public loan a “slam dunk” case.

In a recent candidate Q & A with the Bay View Compass, Ald. Zielinski cited Sweet Water Organics as an example of his efforts to create jobs, saying, “Additionally, hundreds more jobs are being created with funding we secured for urban agriculture companies like Sweet Water Organics.”

However, as far as I can tell, Sweet Water Organics hasn’t created “hundreds” of jobs; in fact, Sweet Water Organics reports having “created or maintained” 12 jobs since receiving the loan from the City of Milwaukee, with 4 of those jobs being held by Sweet Water Organics staff members who were employed there prior to the grant and who were receiving much better pay. Two more of those twelve positions are occupied by Josh Fraundorf and Jim Godsil, the co-founders of Sweet Water Organics. For a time Fraundorf and Godsil had not been drawing pay from SWO, but it appears that for the purposes of “job creation,” both are now drawing paychecks from Sweet Water Organics.

Having reviewed Sweet Water Organics’ most recent quarterly wage report, there also appears to be a number of individuals listed as having received wages who are actually former employees of Sweet Water Organics who were owed back pay by SWO, as opposed to being “new” employees of SWO.

So here’s two questions I have: How many jobs has Sweet Water Organics actually created, and how many of those jobs are the type of jobs that are family-sustaining? It certainly seems to me that if Sweet Water Organics has created jobs, they’re minimum wage jobs that certainly aren’t the kinds of jobs that would be comparable to high-tech “Silicone Valley” jobs Ald. Zielinski mentioned in a recent mailer sent to voters.

Sweet Water Organics – when will it turn a profit?

One final question I’ve found myself wondering is when Sweet Water Organics – which is organized as a for-profit business – will actually start turning a profit. In may, 2010 SWO co-founder Josh Fraundorf told the Wall Street Journal he hoped to begin to show a profit by that fall (while employing “around 20 workers,” no less). However, in a December 30, 2011 article in the Bay View Compass, Fraundorf said he hoped to have data on April 1, 2012 that would show a profitable farm. Interestingly enough, while Fraundorf said he hoped to have data showing a profitable farm by April 1, 2012, in the same article from the Compass Todd Leech, Sweet Water vice-president and sales manager, is quoted as saying the company should be “running at a profit by late winter.”

It appears Sweet Water Organics has never turned a profit since coming into existence, leaving me to wonder when exactly Sweet Water Organics will start turning a profit – in the process showing some sort of return on the investment the City of Milwaukee has made in SWO?

What’s Next?

When I sat down to put this entry together, I felt conflicted, because I support the idea of urban farming (I’ve got four vegetable beds in my backyard) and didn’t want this entry to discredit the urban farming/aquaponics movement as a whole. However, while I applaud what the folks at Sweet Water Organics are trying to do, I can’t help but wonder if what they’re attempting to do can’t be done better/more profitably/more transparently. Hundreds of thousands of dollars have already been spent by various governmental and non-governmental bodies in order to give Sweet Water Organics a “boost” to help it become profitable, but despite years of high hopes and talk about profitability, Sweet Water Organics seems to me to be no closer to profitability than it was when it was first organized.