Lease extended through 2030. Milwaukee World Festival plans to rebuild south end of the grounds.
The Milwaukee Common Council on Tuesday approved a 10-year lease extension to Milwaukee World Festival Inc. for use of the 75-acre Henry Maier Festival Park, the home of Summerfest and several ethnic festivals, on Milwaukee’s lakefront through 2030.
To take affect, the lease extension agreement still needs to be approved by Mayor Tom Barrett.
The lease extension allows Milwaukee World Festival to move forward with plans to improve the southern end of the Summerfest grounds. Milwaukee World Festival is currently evaluating design and architectural options for the future redevelopment project.
The project will completely rebuild the area of the Summerfest grounds between the Harley-Davidson stage and the Marcus Amphitheater. The project will include the redevelopment of the Briggs & Stratton Big Backyard stage and the M&I Classic Rock stage area.
The specific plans and costs are yet to be determined. Milwaukee World Festival’s new lease with the city requires it to spend at least $10 million on the project, said John Boler, vice president of sales and marketing for Milwaukee World Festival. However, the actual cost of the project could exceed $20 million and will be one if the biggest, if not the very biggest, capital improvement project done to Maier Festival Park, he said.
Milwaukee World Festival needed the 10-year-lease extension so it can be certain that it will get a return on investment from the project, Boler said. The project is expected to be completed in 2015 and will be done in phases over several years.
“This 10-year lease extension cements the future operations of Summerfest on the lakefront and provides the opportunity for Milwaukee World Festival to embark on a planned capital improvement initiative to redesign and redevelop approximately 22 acres on the southern portion of the grounds,” Don Smiley, president and chief executive officer of Milwaukee World Festival, said in a news release.
Improvements done in recent years to the Miller Oasis and the Harley-Davidson stage have enhanced the need for improvements to the older facilities on the south end of the grounds.
“It is in need of an upgrade,” Boler said. “We’re going to do a complete renovation, which would mean bulldozing a good portion of the area.”
Some of the goals of the redevelopment of the south end of the grounds will include a redesigned traffic flow, new food and beverage buildings, stage improvements and an enhanced festival-goer experience with Lake Michigan, Boler said.
Over the term of the current lease, the average annual rent paid by Milwaukee World Festival to the City is $1,385,437.00, which includes periodic increases over the term, and required Milwaukee World Festival to make a $2 million capital contribution for the construction of Lakeshore State Park.
Under the lease amendment, the average annual rent and increases consistent with that of the current lease. However, to pay for the police and fire services provided by the city for Summerfest, Milwaukee World Festival will now pay a supplemental services fee of $100,000 per year with an annual increase of 3 percent from 2010 through 2020, 4 percent from 2021-25 and 5 percent from 2026-30.
Ald. Michael Murphy led the charge for the police and fire services fee.
“After reviewing the lease and determining the significant cost of providing police and fire services, I felt strongly that Milwaukee World Festival could pay more for those costs,” Murphy said. “With the current economic conditions, I’m pleased the public safety fee is included in this lease, and the city will receive more than $3.3 million from the fee through 2030.”
The negotiations for the new lease are a dramatic improvement from the acrimonious battle that played out during previous Summerfest lease negotiations years ago between former Milwaukee World Festival leader Bo Black and former Milwaukee Mayor John Norquist.
“Summerfest is a valued community asset,” said Common Council president Willie Hines.
“We are appreciative of the time, consideration and approach Mayor Tom Barrett, the Common Council, the Harbor Commission and City Attorney, Grant Langley and his staff, took in negotiating and granting this extension,” Smiley said. “The parties handled the process professionally and fairly and the outcome delivered value to both parties and the necessary assurances to extend the relationship.”
