Some questions about Sweet Water Organics

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.

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68 thoughts on “Some questions about Sweet Water Organics

  1. My only argument for you is to come to sweet water and judge for yourself. I will not deny that sweet water has been without its bumps in the road, but everyone is paid and they are moving
    Forward. Would you rather defend one individual or stand up for a movement?

  2. You can say whatever you want, come to sweet water, then go to Jesse’s basement and decide for yourself who is doing more important work. Read the Harvard business journal… If you have questions send them to info@sweetwater-Organics.com

    1. If you are trying to compare the size of two operations Sweet Water has at least a $250,000 head start over an individual working on their own means. If anything this comment goes to show the dedication Jesse has to urban farming. Do you or any other current employees have their own personal system or do you leave the green movement when you walk out the door?

  3. Attack sweet water if you want to damage the aquaponics urban farmIng movement. Come to sweet water and find out fOr yourself. There is nothing to hide. Really, wDid you know that the smack you are talking is threatening six families with children e are trying to do great things. Just because sOmeone Couldnt deal… See for yourself…&

    1. Calling into question some of the business practices of Sweet Water does not equal an attack on the aquaponics farming movement, because Sweet Water is not the whole movement.

      What we’re discussing here is one company, not the entire movement, and it’s incredibly arrogant for anyone to equate SWO with the aquaponics movement as a whole.

  4. Jeff, do you work for Sweet Water? If so, the defensive snipes and distracting personal attacks do not reflect well. Particular questions were raised about the integrity and transparency of the process by which City funding was granted to Sweet Water, the use of public funds, and SWO’s job creation deliverables, none of which seem to have much to do with coming down and looking at the place. They are not the kinds of issues which can be “judged for oneself” through a visit, nor is it about whether or not one likes the type of work Sweet Water is trying to do or believes their mission or type of work has value. Again, not the issue.

  5. I’ve been there, as many others probably have have for tours and events. Still, a visit does not seem likely to address the issues at hand. Examination of relevant public and financial records seems more appropriate.

  6. Not really privy to the intricacies of the situation here, but simply based upon what people are saying, it appears Jesse was never “attacking” or “bad-mouthing” Sweet Water. He seems firmly behind the urban agriculture movement and is simply saying that this is one case of bad business managment which could happen in any industry. Jeff, on the other hand – you sound like many people I’ve come across in my life who desperately want to defend something not through real evidence or proof, but by “bad-mouthing” and blaming someone else. I could be wrong, but it sure appears that way, and it gets me all the more interested in actually finding out what’s going on. However, I agree with others here – rather than just coming down to look at a cool aquaponics operation. I think you should open the books for the public – that is now subsidizing you – to see.
    peace

  7. Ok so everyone that has a problem, come to sweet water and discuss it, so they can continue to try and be a positive business. Get rid of your individual hate and do some good. What do you think sweet water is trying to do?

  8. Jeff, why do you attack Jesse personally for blowing the whistle on a company that is being accused of misusing taxpayers dollars? Claiming that he is attacking families is inappropriate. No one has ever said starting a business was easy and anyone who works with a start up must understand the inherent risks.

  9. I’ll tell you what it appears like they’re trying to do, from my perspective. It appears that the ownership – who, from what I can gather, had no real interest or expertise in the green movement – latched on to a trendy and admittedly innovative green technology. They leveraged some resources and some political backing to get a “sweet” deal to help finance a ” business. Then, it looks like they attracted a bunch of people with actual expertise and passion in this field to come work for them. They obviously got a lot of media attention, locally and beyond. Local politician jumped on the band-wagon because of all the attention. The IBM team came in, bringing more money and media, but, alas, the ownership – through negligence, ignorance or both – were pathetically and hopelessly incapable of bringing all these parts together to create a viable business, such that they now have alienated industry professionals who could have actually helped them, they require tax payer subsidies to prop them up, and they attract sleaze-ball, hanger-on politicians like Mr. Z and Rocky Raccoon who just want ride the wave, collect taxes and pray that they are part of something bigger than themselves [without actually working for it].

  10. So, once again. I emplore you to Just come to sweet water and judge for yourself. I never had a bad relationship with Jesse or molly. We got along very well, but unfortunately he made it his mission to destroy sweet water after it didnt work out for him and that place means a lot more than Jesse. He was an owner but claims no responsibility. Sorry Jesse. That is not low, that is real.

  11. I would like to ask all of you reading this, do you think an idea / business like this happens with no complications? I mean c’mon. Sweet water is trying to make a change in the food & educational system. Say whatever you want , but why don’t you come find out what swo is trying to do. Or do it yourself. Swo will support you. If money was the issue, swo would have been out of the game long ago…

    1. “If money was the issue, swo would have been out of the game long ago…”

      Unless they’ve been receiving infusions of funding from the City of Milwaukee, for example…

  12. Jeff, if you’re so interested in defending SWO here on Blogging Blue, perhaps you can answer the questions I asked you last night. In case you missed them, here they are:

    1. How long did it take SWO to pay everyone who was owed back pay the money they were owed? What’s more, what was the total amount (in dollars) of back pay SWO owed to former employees?

    2. Further, how many of the jobs SWO has created are family-sustaining, meaning they’re above minimum wage?

    3. What about rumors the folks at SWO buried their outdoor fish “tanks,” filling them with construction debris and garbage before they did so?

    4. Oh, and since you invited folks to check Jesse out on CCAP, mind posting your full name so we can check you out as well?

  13. I am not an employee. I have done work for Swo. My comments are exactly that, mine. I obviously have a lot of love for sweet water, and I don’t believe that I will change anyone’s mind here, so I am done. Sorry I cannot give you all the answers you want. Jim godsil would be a good person to discuss your issues with swo. Thnx

  14. WOW, that took guts Jesse, Molly.

    It’s been a while since I was up at Sweetwater. I think perhaps I was there near the start of the time the “specialists” were brought in to try and help get things working right.

    What I saw was a huge investment by people with a Grand Idea, but almost no idea of how to implement it functionally and some newer attempts by the newer people to try and get things working properly but lack of money or materials with which to do it.

    Growing plants and veggies in a big warehouse doesn’t really work well. Plants need far to much light to make it really cost effective. Also, The fish tanks were far too large in relation to their plant growing space or filtration, let alone the lighting available to grow those plants.

    Granted that was quite a while back.

    Urban farming is a great idea, but I think it generally needs to start smaller, especially where people don’t really have the experience. For instance, Growing Power started smaller and it just keeps growing and expanding.

    Questioning the financial dealings and politics behind such loans is not attacking Urban farming, nor is it attacking Sweetwater’s employees though it may be attacking some of the founders business practices and definitely their budgeting skills.

    It is disheartening to hear that they are still struggling because we all want to hear of success in the realm of Urban agriculture and Aquaponics on a commercial scale. However, remember that Farming is hard and the truth is most farms don’t make anyone rich since most money goes right back to paying the bills/payroll, buying/repairing equipment, buying seed and feed, what is left often goes to improvements and expansion and hence why few farms show much “profit” and perhaps why it is so difficult to start up large operations with borrowed money.
    Heck, I suppose same could be said about most start up businesses.

  15. I think discussion about whether Sweet Water is trying to do a good thing is a distraction. The relevant discussion that needs to be had is scrutiny of the role of City of Milwaukee Department of City Development, Alderman Tony Zielinski, and the other Milwaukee alderpersons involved in allocating a forgivable $250,000 of public money to a private startup business without proper due diligence and stewardship of public resources. It is the considerable public funding that gives the public an interest in scrutiny of Sweet Water–not desire to question the value of aquaponics itself. Where was the due diligence regarding SWO’s financial health before the infusion of the public’s quarter-million dollars, if SWO had recently lost several highly-skilled employees due to nonpayment of wages? Where was the due diligence of their business model and its likelihood to successfully create family-supporting jobs and produce a profit? Only about a month prior to the grant, the IBM Smarter Cities project was in Milwaukee and evaluated Sweet Water’s operations. After what they saw, its recommendation to the City was the need to develop an Aquaponics Innovation Center that could analyze and work towards developing a sustainable business model for aquaponics. http://city.milwaukee.gov/ImageLibrary/Groups/cityDCD/Urban-Agriculture/IBMSmarterCitiesChallenge-Milw.pdf What findings from IBM did the City ignore in instead simply handing money over to this particular aquaponics business? Why was SWO’s proposal hastily re-written and resubmitted after DCD questioned the initial proposal that funding would go towards paying wages, a use which does not qualify for DCD Development Fund dollars (but that apparently was a desperate situation for SWO at the time)?

  16. In response to Jeff from Sweetwater, just because the former employee(s) are disgruntled doesn’t mean they are wrong or lying, they might have good reason to be mad and feel cheated. Sweetwater has been the recipient of all sorts of extraordinary government subsidies, even before the quarter million dollar grant which I suppose is gone forever, I predict they don’t make the promised hires and don’t ever pay back the money and aren’t ever asked to. This isn’t unique to Sweetwater either, I can think of a couple other examples at least, it’s how our elected officials handle public money in Milwaukee, I’d call it cronyism, and the speculation that Zielinski would to it just to burnish his “green” and “urban ag” credentials sounds somewhere between too generous and naive.

  17. AK, I’m with you. Where’s the accountability? This business was clearly ‘enabled’ by the alderman who gave them our money to play with, so he could get his ‘green’ credits. He walks away happy, puts it on every piece of crap mail he sends out, everybody thinks he’s awesome… and several former employees are left in the lurch because of it.

  18. Take a look at yourself, fix up your own life. Stop whining, stop complaining. Grow up and make a difference in the world. This whole chain of comments is utterly pathetic.

    And to the people who worked jobs and didn’t get paid: that’s just plain old stupid. I’ve had over 15 different jobs in my life and every one paid every other friday without fail. Now because people are so foolish to take jobs that pay 0 we all have to sympathize? i don’t think so. sounds like they shot themselves in the foot, and “coming out” about that isn’t strong it’s embarrassing.

    1. I bet everyone of those employees also had numerous jobs in which they were actually paid. That is by definition, what a job is. I doubt any of them signed on knowing they would go a period of time without pay. This article is not about sympathizing with anyone, it is about a company who has a history of mismanaging their employees as well as their finances now taking money from taxpayers to continue this pattern.

    2. Anyone who gets so mean and nasty so quickly without provocation is probably very close to the problem and feels a little guilty or afraid of getting caught for something.

      Hopefully Zach W could make a couple phone calls, or e-mails at least, to invite Alderman Zielinski and Jim Godsil to explain how the $250,000 was spent and comment on the other issues raised by this article.

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