The Wisconsin Center District, the organization that owns and operates downtown Milwaukee’s convention center and other entertainment venues, finished last year about $30 million down from pre-pandemic expectations.
The COVID-19 pandemic wreaked havoc on tourism and hospitality business for much of last year. Industry impacts are quantified through things like drops in hotel occupancy and lost revenue for convention venues.
WCD expected a net income of $21 million last year. It ended the year with a roughly $9 million loss. This created a negative budget variance of $30 million, said Steve Marsh, WCD chief financial officer.
This came from mass event cancellations amid the pandemic. The convention center’s big event of 2020, the Democratic National Convention, was a largely virtual affair.
WCD management did two things to keep the district afloat. It cut operational expenses — which included cutting staff — and enacted a capital restructuring plan.
This positioned WCD to “weather the worst of the COVID storm,” Marsh said.
“Twelve months ago, I’m not sure I would have thought it possible for our organization to overcome a $30 million negative swing on our income statement, and quite frankly, I would have thought it would have been financial ruin for our district,” he said. “However, as we sit here today, we’ve proven quite the opposite.”
Amid all this, WCD also borrowed more than $400 million to pay for a roughly $420 million Wisconsin Center expansion. Marsh said the expansion will be an economic driver for the region in the coming years.
Marsh shared district financials this morning during two committee meetings of the WCD Board of Directors. This included a final review of the district’s 2020 income statement.
The convention district is again showing signs of life. Marty Brooks, WCD chief executive officer, did not put the increased interest in the convention space into numbers. But, he told committee members that current event demand comes from volleyball tournaments and graduation ceremonies.
For this, he credits rising vaccination rates and relaxed restrictions for holding events.
“We’ve got a very healthy schedule of graduations, primarily in the (UWM Panther) Arena, because of the added space and ability to adhere to social distancing requirements,” he said.
It may be awhile before the convention business returns to the level it was before the pandemic. But WCD officials say they’re better off than a year ago.
“Certainly 2020 was a memorable year for all of us, and one that I’m glad is in our rear-view mirror,” Brooks said.