A consulting firm hired by the Wisconsin Center District presented three concepts to expand the downtown Milwaukee convention center Friday, but there is still no funding plan in place for the $247 million to $277 million project.
Tampa, Florida-based Crossroad Consulting also told Wisconsin Center District Board members that a larger convention center would need 1,000 new hotel rooms within walking distance to be successful.
Ellen Nowak, chair of the WCD board, said the cost of the project is in-line of what she was expecting.
“How to pay for it is the big question,” Nowak said. “There are a lot of sensitivities that have to go into it.”
The Wisconsin Center District owns and operates the Wisconsin Center convention center, the UW-Milwaukee Panther Arena and the Milwaukee Theatre. When the new Bucks arena is complete, the district will assume ownership and a new board will be seated, most likely by the end of August.
The new board will determine the future of the convention center, Nowak said.
The district currently has a ability to borrow about $200 million for the project.
The Wisconsin Center District is funded by three Milwaukee County taxes: a 2.5 percent tax on hotel rooms, a 3 percent tax on rental cars, and a 0.5 percent tax on food and beverage; plus an additional 7 percent tax on hotel rooms in the city of Milwaukee.
The only tax the district board has the authority to raise is the Milwaukee County room tax, to 3 percent, which would generate an additional $1 million per year.
Increasing a tax to pay for the remainder of the project would need the authorization of the Republican-controlled state Legislature and Gov. Scott Walker.
The current convention center, which was built in 1998, is 266,000 square feet, with about 189,000 square feet of exhibit space. By comparison, Cincinnati has 196,800 square feet of exhibit space at its convention center; Columbus has 373,000 square feet; Minneapolis has 475,000 square feet; and Indianapolis has two convention venues totaling 749,000 square feet of exhibit space.
Crossroads and Kansas City-based Populous, which is also the lead architectural firm for the Bucks arena project, recommended the convention center be expanded to between 422,800 to 437,800 square feet.
Of the three concepts presented, the consultants leaned heavily on a “multi-purpose” model that included 98,932 square feet of multi-purpose space.
All three models include onsite parking, which would also be a revenue generator.
Susan Sieger, president of Crossroad Consulting, told the board they would be at a competitive disadvantage if there weren’t 1,000 new convention quality hotel rooms within a three-block radius of the Wisconsin Center.
“This needs to be done together,” Sieger said, “There needs to be an equal commitment from a timing perspective. Chicken and egg game is not one you should play.”
The city of Milwaukee has been seeking proposals for two years to develop a 2-acre parcel at Fourth Street and Wisconsin Avenue, across the street from the Wisconsin Center, a site that could be suitable for a large convention center hotel.
Marcus Hotels & Resorts and Milwaukee-based hotel development firm Jackson Street Holdings LLC both submitted hotel proposals, but neither has moved forward. The RFP has since been reissued.
Alderman Robert Bauman asked if the Milwaukee streetcar would alleviate the need for so many downtown hotel rooms, but Sieger said it would not.
Marty Brooks, president and CEO of the Wisconsin Center District, said he is excited to bring the project to this step.
“Expanding is necessary not only for business to grow but for it to be maintained,” Brooks said.
Jim Villa, CEO of NAIOP Wisconsin and a VISIT Milwaukee board member said the expansion of the convention center is a critical missing piece to the revitalization of downtown west of the river.
“In addition to more and larger conventions and guest spending, the project will stabilize and raise property values, increase the overall tax base, and expand economic growth and job creation outside of the traditional central business district,” Villa said.
