$420 million Wisconsin Center expansion could still get final board approval in April

Bond issuance date in question as market impacted by COVID-19

Rendering: tvsdesign and Eppstein Uhen Architects
Rendering: tvsdesign and Eppstein Uhen Architects

The Wisconsin Center District’s Board of Directors could still give final approval to the proposed expansion of the downtown Milwaukee convention center, even though the construction project may be pushed back due to the COVID-19 outbreak.

WCD, which owns the Wisconsin Center and other downtown Milwaukee event venues, plans to double the size of the convention center as part of a nearly $420 million project. The expansion includes, among other things, increasing the exposition hall to 300,000 contiguous square feet and adding a new 30,000-square-foot ballroom. The existing space would also be updated.

In a memo sent to board members Monday, WCD president and chief executive officer Marty Brooks left the door open for a final project approval on April 2. That’s when the board is next scheduled to meet, and has been the targeted date for final approval the last eight months. Specifically, the approval would allow district officials to issue bonding to finance the project.

“COVID-19 has impacted the world in a way we have never seen before and has taken a huge toll on the hospitality industry,” Brooks wrote in the memo. “Everyone, regardless of position, has been deeply impacted. I believe the need to approve this project is more important now than ever before.”

The memo was sent a couple days after Brooks said WCD would not issue project bonding April 21 as planned. This would likely, but not necessarily, push back the anticipated project groundbreaking date of spring 2021.

Brook told BizTimes on Friday the WCD would hold off on issuing bonds due to market uncertainty caused by the outbreak. According to the memo, the proposal slated for approval on April 2 would allow the district to issue bonds “at such time as market conditions have rebounded.”

Brooks said in the memo the project should move forward even as markets are in turmoil due to its expected economic impact. According to the memo, the expansion will generate 1,154 on-site construction jobs and an equal amount of off-site jobs, with total estimated earnings of more than $100 million during two years of construction.

In addition, the expansion is expected to attract 100,000 new out-of-state visitors annually to Milwaukee.

Brooks wrote that he contemplated removing the expansion vote, but “in response to my own imbalance on the right approach, we will be soliciting guidance from both the Finance & Personnel and Governance committees that will be meeting next Monday (March 30).”

WCD previously set a “not-to-exceed” amount of $425 million for the expansion project cost. Since then, the project team consisting of owner’s representative CAA ICON, the design team of tvsdesign and Eppstein Uhen Architects, and construction managers Gilbane Building Co. and C.D. Smith, came up with a specific cost of nearly $420 million, according to the memo.

“By all accounts, the hospitality industry; hotels, restaurants, bars, theaters, arenas, festivals and amusement parks have been hit hard and thousands of employees have lost their jobs,” Brooks wrote. “The expansion of the convention center is ready and poised to bring economic stimulus to downtown. It will be the catalyst to creating a greater demand for hotel rooms, restaurants, bars and meeting and convention support businesses. As the largest convention center in the state, the WCD has an obligation to the entire hospitality industry to be ready to secure funding and begin construction. With this, the region can resume its course to making Milwaukee a not to be missed destination for conventions, meeting, residents, and leisure travelers.”

Also in the memo, Brooks detailed a number of cost-saving measures WCD has taken that will cut about $2.25 million in expenses for the fiscal year. The actions were taken after nearly all events scheduled to take place at the convention center through late May were either canceled or pushed back.

The cost-saving measures included reducing by 20% the pay of all salaried and hourly full-time staff through at least June; deferring non-essential 2020 capital projects to 2021; putting a freeze on new hires through at least June; reducing departmental expenses; and reducing utility use.

“The need for further adjustments will be closely monitored over the next 30-45 days and specifically watchful for changes made in connection with the Democratic National Convention,” Brooks wrote. “Inquiries for date availability in all three WCD facilities for the third and fourth quarters of this year are encouraging and we are guardedly optimistic that we will be able to offset some of the impact we are experiencing through June.”

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Alex Zank
Alex Zank covers commercial and residential real estate for BizTimes. Alex previously worked for Farm Equipment magazine and also covered statewide construction news at The Daily Reporter. He graduated from the University of Wisconsin-Eau Claire, where he studied journalism, political science and economics. Having grown up in rural western Wisconsin, Alex loves all things outdoors, including camping, hiking, four-wheeling and hunting.