Last updated on July 1st, 2019 at 03:48 pm
The state budget heading to Gov. Tony Evers’ desk includes a provision that would provide financial backing on bonding related to a possible expansion of the convention center in downtown Milwaukee.
Members of the Wisconsin Assembly on Tuesday passed a budget plan that increases by $100 million the state’s existing moral-obligation pledge for new debt issued by the Wisconsin Center District, the entity that oversees the Wisconsin Center convention space and other downtown event venues. The Senate approved the budget on Wednesday.
The increase means up to $300 million in bonding from WCD would be backed by the state. This backing is essentially a pledge by the state to appropriate money toward debt-service payments if the district ever was not able to do so for its bonding, said Steve Baas, senior vice president of governmental affairs and public policy of the Metropolitan Milwaukee Association of Commerce.
Baas noted the state has backed financing of other projects, such as the construction of Miller Park and work on Lambeau Field in Green Bay. There has also never been an instance in state history that the state has ended up having to pay as a result of it backing such financing.
“It doesn’t cost the state anything unless there’s a default on the project,” Baas said.
The move by state lawmakers makes it easier for WCD to put a financing deal together on the proposed expansion project by making it cheaper to borrow money.
“(It) causes the financial institutions to look more favorably at the entity that they’re providing funds to, because the state is saying we will be the back-stop that if, for some reason the WCD should not be able to make its payment, the state comes in,” Marty Brooks, WCD chief executive office, said.
Evers will still have to sign off on the state budget. However, Evers has indicated both publicly and in conversations with MMAC and others that he generally supports the convention center being expanded, said Baas.
“Every indication we’ve had from (Evers) is that he’d be supportive,” he said.
Beyond that, there are still a number of steps to be taken before the actual expansion work could begin. In May, WCD announced it had tapped Morgan Stanley as a financial consultant that would help the district craft a way to finance such an expansion, which would cost around $300 million.
Then there’s the business of hiring an architect and contractor on the project.
Even so, WCD officials have an idea of when they want to actually begin turning dirt. Brooks said that although nothing is set in stone, “we would hope that the project would start fourth quarter of 2020 or first quarter of 2021, (and) take about two years for completion.”
Under this timeline, so long as they had shovels in the ground on the project and could point to a specific expected completion date, the center district could start booking business in the entire expanded building somewhere around the first quarter of 2023.
“The next steps are for us are to secure an architect and construction manager, and once we have that we’ll know exactly what it is we’re building, how much exactly it’s going to cost, then have a real specific construction timeline,” Brooks said.
In 2017, a study found the convention center’s exhibit hall space should be expanded to 300,000 square feet. In addition, the study recommended meeting space be doubled and ballroom space should be expanded by 15,000 to 20,000 feet. In order to be successful, the convention center would also need 1,000 new hotel rooms within walking distance, the study said.