Last updated on August 22nd, 2022 at 02:24 pm
The Wisconsin Center District Board on Friday approved issuing $20 million in additional long-term debt, and a mix of other financing measures, to cover what is projected to be $36 million overrun in the budget for the Wisconsin Center expansion project.
Construction for the convention center expansion project began in late October and remains on track for an early 2024 completion. It is expected to double the size of the venue.
The growing price tag for the project, which Wisconsin Center officials attribute to inflation and supply chain issues, brings the projected cost for the expansion to $456 million. It had originally been projected to cost $420 million when it was first approved by the board in April 2020.
“Due to inflation and supply chain issues, the expansion project of the Wisconsin Center was facing a $36 million gap in funding. WCD management has identified $16 million in strategic solutions: $4 million in excess interest income, $5 million in grants from Levy, and $7 million from the restricted reserve account. That leaves $20 million in additional bonds needed,” said Marty Brooks, president and CEO of the Wisconsin Center District in a statement released Friday. “Today the WCD Board authorized two resolutions which support the $20 million bond issue along with an extension of the Levy food and beverage contract. All of our BID packs are now in, and this funding request will allow us to complete the project as it was originally proposed and deliver the right venue for the city.”
Discussing the financing strategy, Sarah Maio, vice president of marketing and communications for the WCD, noted that since the restricted reserves can only be used to pay down debt, the district will be issuing a $7 million short-term bond that will be paid off within the year, using the $7 million in restricted reserves. The board – having authorized the district to issue tax revenue bonds not exceeding $525 million to help fund the project in 2020 – has already issued just over $444.4 million in bonds. The added $20 million would bring that total to $464.4 million, while still keeping it under that $525 million threshold. The $20,000 bond issue will be paid off over the next 40 years using revenue that the Wisconsin Center District generates from a mix of countywide hotel, restaurant, and car rental taxes, just like the previous bond issues.
Cheers for RNC boosters
With an expanded footprint and space upgrades the hope is that the Wisconsin Center will make Milwaukee more competitive in attracting conventions, such as the Republic National Convention, which is slated to take place in Milwaukee in late summer 2024. Fiserv Forum is expected to house the convention floor and main stage, but the remainder of the event is slated to take place at the Wisconsin Center.
At the Friday meeting, Brooks thanked all those who had worked to seal the deal that will bring the RNC to Milwaukee, including Peggy Williams-Smith, the president and CEO at VISIT Milwaukee, as well as WCD Board Chairman James Kanter, and board members, Milwaukee Common Council President Jose Perez, and Omar Shaikh, partner of SURG Restaurant Group.
“It truly has been an incredible project to be a part of and to witness how people on both sides of the aisle and in the public and private sector have worked together to support something that is just so terrific for the region and for the state,” Brooks said.
Jeers for FPC Live, Bucks
But while Brooks had plenty of praise for those who worked to bring the RNC to Milwaukee, he had jeers for the Milwaukee Bucks and their decision to partner with a division of Madison-based Frank Productions, which is owned by national concert promoter Live Nation, on its recently revamped plans to construct a building with two live concert venues – one serving 800-persons and other 4,000-persons – next to Fiserv Forum.
Brooks said the move will adversely affect the Miller High Life Theater, which is owned by the Wisconsin District and managed by the Pabst Theater Group, as well as other concert venues in the city.
“The Bucks are using property they now own … only because of a deal financed by the city and county of Milwaukee, the state of Wisconsin, and the Wisconsin Center District. They are partnering with Live Nation to build and operate two venues that would directly compete not only with the Miller High Life Theater, but the rooftop ballroom on the (WCD) expansion and the grand ballroom in our existing center,” Brooks said. “While we have an exceptional relationship with the Bucks, I believe the partnership between the Bucks and Live Nation is a show of bad faith to our organization, the city, county, and state.”
Brooks said that Live Nation having its own pair of venues in the city would hurt any other comparable venue in the city, “because any Live Nation tour will only play in the Live Nation-owned venues, which is not the case currently.”
“These venues will not bring new business for a positive economic impact,” Brooks said. “They will simply be redirecting shows from Miller High Life Theater and other venues for a zero net economic impact for the city.”
Asked for a response to Brooks comments, Milwaukee Bucks and Fiserv Forum President Peter Feigin issued the following statement:
“We are strongly committed to the creation of new opportunities for Milwaukee,” Feigin stated. “Whether it’s the expansion of the Convention Center, which we strongly supported, the exciting prospect of the Iron District, the beautiful upcoming Trade Hotel, the dramatic forthcoming Milwaukee Public Museum, or, in conjunction with FPC Live, the first modern general admission venues in the market, we are thrilled about the continued growth of our city. This resounding progress reinforces Milwaukee as an evolving and engaging place to visit, live, work and play.”