Last updated on March 27th, 2020 at 01:39 pm
Wisconsin Center District officials are scheduled to consider next steps in their planned expansion of downtown Milwaukee’s convention center after city leaders this week reversed their endorsement of the project.
The Milwaukee Common Council voted to rescind a previous approval related to the project’s financing, citing ongoing talks of revenue sharing and community-benefits agreements as well as market uncertainty in the wake of the COVID-19 outbreak.
WCD, which owns the Wisconsin Center and other downtown venues, has for months been laying plans to expand the convention center. The nearly $420 million project would double the size of the Wisconsin Center.
The Common Council action came one day after WCD president and chief executive Marty Brooks said he was leaving the door open for a final project approval in April. Brooks detailed the possibility in a memo to WCD Board members, who could vote to approve the project when they next meet on April 2.
Brooks proposed in the memo that board members allow him the ability to issue bonding to finance the project whenever market conditions improved. The district initially planned to issue bonding on April 21, but Brooks said recently this would no longer be the case due to market calamity caused by COVID-19.
A WCD spokeswoman said in an email that the district’s Governance and Finance & Personnel committees will “provide further direction and clarity on our next steps” for the project when they meet on Monday.
Alderman Robert Bauman, who represents downtown and also sits on the WCD Board, said it did not make sense for the district to take a vote on the project given current conditions.
“I find it irresponsible that they would even be contemplating a vote on April 2 to approve bonding for a $419 million project in an industry that has essentially shut down,” he said during Tuesday’s Common Council meeting.
Bauman has called for WCD to share a portion of its hotel-room tax revenues with the city. One-third of annual revenues would equal $5 million. Other council members have asked that the project be tied to broader community benefits, such as anti-displacement efforts and contracting goals for small and minority-owned businesses.
Although nothing has been made final, the city and WCD have been in talks about a payment-in-lieu-of-taxes agreement where the district would share some of its tax revenues with the city.
Common Council President Ashanti Hamilton, who also sits on the WCD Board, argued that council members should revisit the matter later in the week, which would allow them more time to gather details and invite WCD leaders to speak. He also voiced concern that if the city reversed its decision it would lose any leverage it had with WCD.
“I want to keep that opportunity before us, because I think that’s a major win in the event the project happens and things return to normal at some point,” he said.
Hamilton also said it appeared both sides were moving toward an agreement on addressing the issues the city had raised.
To make project financing more feasible, WCD plans to rely on moral obligation backing from the state. This is a guarantee that legislators would appropriate money to make debt-service payments if the district were ever unable to make the payments itself. Such a guarantee provides WCD with more favorable interest rates.
But in order for the WCD to use that moral obligation pledge, the city of Milwaukee needed to endorse that certain project assumptions were true. Among other things, the list of assumptions included that the project would attract at least 50,000 out-of-state visitors annually and would support at least 2,000 full-time equivalent jobs.
Alderwoman Milele Coggs, another WCD Board member, questioned whether rescinding the city’s approval would even prevent the project from moving forward. She said she and others were told during talks with WCD management that the district could move forward with the expansion without the city’s consent.
Bauman countered that it would be very unlikely the district would do that, since the use of state moral obligation was dependent on the city’s endorsement.