The mixed-use Iron District development in downtown Milwaukee would receive $9.3 million in cash from the state to help pay for a $45 million, 8,000-seat professional soccer stadium, under a funding proposal from Gov. Tony Evers, submitted to the State Building Commission (SBC) on Tuesday.
The proposal is part of $3.8 billion in recommended Capital Budget Investments – a list of projects and funding recommendations that next will be considered for approval by the commission and the Republican-controlled Legislature’s Joint Finance Committee (JFC)
If approved by the full Legislature, the $9.3 million in state money would go solely toward funding the $45 million soccer stadium that will be the centerpiece of the $160 million Iron District development northeast of the Marquette Interchange. The remaining $37.5 million for the stadium – much of it already secured – is slated to come from developers Kenosha-based Bear Development and Grafton-based Kacmarcik Enterprises in the form of equity or debt, said S.R. Mills, chief executive officer at Bear Development on Tuesday.
“We are very thankful to the governor and his team for seeing the merit of the project,” Mills said. “We certainly looked at all financing sources for stadium, but we always had a vision of working with the state on this impactful development.”
As the developers wait for the SBC and JFC to consider Evers’ funding proposal, Mills said they will be working hard to educate all state lawmakers about the project.
“Our goal, first and foremost, is to make sure our line item is ratified. We think it will be a significant benefit to the city and state,” he said. “We certainly will work hard to show all members of the Legislature the merits of the project.”
News of possible state funding for the project comes as developers continue to line up financing for the entire $160 million Iron District development, which will be constructed on an 11-acre site.
“At this point, we’re really looking to finalize the capital stack,” said Mills in an interview with BizTimes Milwaukee in December.
Announced in May, plans for the Iron District include a full-service hotel, an indoor concert venue, a residential development, and the 8,000-seat soccer stadium that would house a USL Championship league pro soccer team and Marquette University’s soccer and lacrosse teams.
In June, the city approved the creation of a developer-funded tax increment finance district (TID) for the proposed apartment building portion of the project.
In December Mills said he was hoping not to have to seek TID financing for the other parts of the project. He did indicate, however, that the soccer stadium portion of the project, might require some public funding, Urban Milwaukee
reported at the time.
Speculation circulated about what steps developers might need to take to secure additional city funding, such as inking union contracts and offering living-wage jobs, but there was no public discussion of state funding at that time.
The recommendation for the Iron District and legions of other public and private projects in Evers' $3.8 billion in recommended Capital Budget Investments comes as the state’s budget surplus has grown to $7.1 billion. And $1.9 billion of the Capital Budget Investments funding being recommended by Evers, including the $9.3 million for the Iron District soccer stadium, would essentially come from the state’s reserves, as opposed to being borrowed. According to an Evers administration press release, that move would save taxpayers nearly $1 billion in future debt service payments.
“Our historic surplus means we have historic opportunity and responsibility—to invest in key projects that have long been neglected while still staying well within our means, keeping borrowing low, and saving taxpayers money in the long run, and that's exactly what our Capital Budget does,” Evers states in the release.
The State Building Commission is slated to meet on March 23, to vote on the recommendations. The commission’s capital budget recommendations must be submitted to the Joint Committee on Finance by April 4.
What’s happening now?
As the Iron District developers wait to see if they will get state funding for the soccer stadium, other parts of the project are forging ahead.
Construction of the Iron District's affordable housing component – the 99-unit Michigan Commons apartment building - has already begun on a 0.78-acre site on the west side of the district, Mills said Tuesday.
The demolition of the old Ramada Inn hotel at West Michigan and North 6th
streets is nearly completed. Once cleared, that site will be used for future expansion of the district.
The developers are hoping to start construction on the soccer stadium this summer and complete it by February of 2025.