Barrett Moving Forward With Streetcar
If Common Council approves at December 16 meeting, construction would start in late 2015, and Milwaukee would follow in footsteps of many other cities.
Mayor Tom Barrett is moving forward with the Milwaukee Streetcar, despite the long standing opposition by state Republicans, We Energies and announced mayoral opponent, Ald. Bob Donovan. The project will be debated on the Common Council floor during the December 16th meeting, and should it be approved, the project will enter the final engineering phase and begin construction in late 2015. A late 2015 construction start would have the full system operational in 2018. The move is an unusually bold showing by Barrett in that he’s not going to wait for the court system to decide whether the city must pay the costs of relocating some utility lines, but its a transportation and economic development project he’s been championing for nearly ten years.
It’s not likely the mayor will find a better time to move forward with the project. The growth of Downtown is an increasingly popular topic of discussion, with Northwestern Mutual building the biggest office building in the state, Irgens building the 17-story, 833 East office tower just blocks away, the potential The Couture apartment tower (with a streetcar stop inside) still in planning, numerous residential high rises proposed along the route (including 700 E. Kilbourn and a new Mandel project at Prospect and Ogden) and perhaps most prominent, a new arena for the Milwaukee Bucks that’s getting endless discussion. Moving the streetcar forward for a final vote will take advantage of all this momentum, and the mayor clearly hopes, build on that progress.
In a statement issued today Mayor Barrett said “Milwaukee residents and businesses have demanded a transportation alternative to spur development and provide more options, something most other cities our size are building or already operating. This starter system will — with future additions to other neighborhoods being planned — provide a modern, attractive way to get around Milwaukee, to and from residences, businesses, cultural institutions and entertainment destinations.”
Barrett is citing the $2.6 billion in downtown development since 2005, with an additional $980 million under construction and $1.3 billion proposed as a “strong sign that Milwaukee needs and can support a streetcar.” Barrett hopes the streetcar can significantly increase those numbers, given the experience in other cities showing fixed route transportation attracts development.
Many in the real estate community are encouraged by the prospects of a fixed rail system in downtown, with developer Barry Mandel of the Mandel Group declaring “the timing for the streetcar is perfect on so many levels. With significant new development including housing coming on line, the streetcar will be a huge benefit to residents, employees and visitors. As in other progressive cities that have leaped into the 21st century, the streetcar will attract significant new investment near the route and help bring new development and jobs into downtown, Milwaukee neighborhoods and, eventually, the region.”
Project Financing and Legal Challenges
Tax-incremental financing works by borrowing against a future increase in property tax revenues to finance improvements to a designated district. TIF districts are used to help support numerous development projects, from the new Northwestern Mutual Tower to the Park East Freeway demolition and road reconstruction to brownfield remediation in the Menomonee Valley. Once the bonds have been paid off property taxes flow back in normal fashion to the local property tax levying bodies (city, county, MATC and MPS). The city has numerous successes with TIF districts under its belt, including the Beer Line B neighborhood, the Menomonee Valley and Third Ward riverwalk. Those districts alone have added hundreds of millions of assessed value to the city’s books and will return millions annually to the city budget.
In addition to the Cathedral Place TIF district, the city intends to use funds from an existing TIF district in the Third Ward and a previously announced lakefront TIF district that would finance public improvements in and around The Couture. The lakefront area TIF would provide $31 million for the streetcar, including stops near the under-construction 833 East office tower, US Bank Center and a couple acres of soon-to-be-developable land opened up by the Interstate 794 ramp reconfiguration.
The city on Monday filed an appeal in Milwaukee County Circuit Court to a ruling by the state’s Public Service Commission that requires the city to pay all the utility costs. The city is arguing the PSC does not have the authority to override the already approved streetcar system. The city is also protesting the state law (passed in the last budget), arguing it violates the constitution’s equal protection clause. Utilities are otherwise required to bear the costs of relocating their lines, as they have for road projects both big and small, from the Marquette Interchange and Zoo Interchange to local street rebuilds.
The fight between the city, state and utilities has been making its way through various legal bodies for more than two years. The city had previously been waiting for the resolution of the case to move forward with the streetcar project, but will instead move forward while the ruling is being appealed. Following the 2011 Common Council vote, the route was projected to begin operation in 2014, but once the legal challenges began from non-city residents, the project was delayed.
The project approval process will require numerous bodies to sign-off on the project before construction can begin. The proposed TIF districts are scheduled to be voted on at a regularly scheduled meeting of the Redevelopment Authority of the City of Milwaukee on December 2nd. Following that, the whole Common Council will take up the project in a floor debate on December 16th during their regularly scheduled meeting. The lakefront leg of the route requires the The Couture to replace the Downtown Transit Center, which requires county approval. At their latest meeting, the Milwaukee County Board of Supervisors held the proposal to sell the Downtown Transit Center to Rick Barrett and Tan Lo of Barrett Visionary Development (no relation to the mayor), and will need to take up the proposal again to allow that leg to move forward. The Common Council vote is by far the most pivotal and will likely dictate the project’s fate.
The project was originally to be financed with $64.6 million in federal and local funds. An 80/20 federal/local split would have leveraged federal funds first awarded to the city in 1991 to build a regional transit system. Numerous political deals have reduced that original $289 million to $54.9 million today, including funds for new buses for MCTS, removing the Park East Freeway spur, rebuilding the Marquette Interchange and replacing the 6th Street Viaduct with two bridges. The streetcar project itself has gone through numerous iterations, with former Mayor John Norquist proposing to build bus-only lanes on Interstate 94 and a light rail system to Waukesha County (both killed by regional politics), the Common Council proposing to build a electric bus system in 2006 (vetoed by the mayor) and Mayor Barrett originally proposing a downtown streetcar loop in 2007.
The current route was proposed in 2009 by the mayor, with minor modifications made since to avoid key utility intersections (such as the intersection of N. Broadway and E. Mason St.). The Common Council on a 10-5 vote approved the project on July 26, 2011, allowing the project to move from 30 percent to 60 percent engineering completion before it would need to come back for final approval. That final approval is what Mayor Barrett is now seeking.
The private sector is increasingly visible on supporting the streetcar. In a press release issued by the Mayor’s office, Mandel threw his support behind the project. Two months ago, when The Couture update was announced to include a new leg on the streetcar system, developer Rick Barrett also announced his support of the project. Wangard Partners has championed the project with their new Avenir apartments about to open based partly on the potential impact of the streetcar. Newcomers to the Milwaukee market have also jumped on board, including Carroll Properties, which intends to build a 36-story tower on the route.
Mayoral Race Impact and Common Council Debate
The fact that two aldermen are running for mayor isn’t likely to be a big factor in the final vote, but look for it to be an issue that aldermen Joe Davis and Bob Donovan will attempt to use in seeking campaign donations. Donovan has long opposed the project, going so far as to issue multiple press conferences denouncing the project. Davis hasn’t been as vocal in his opposition. If there is a significant jobs and jobs training component to the project, it will be hard for him to say no. At one time Davis had even proposed the city issue $200 million in bonds to build a city-wide light rail system and most recently proposed $100 million in bonds to pay for a new arena.
Streetcar support within the council is led by aldermen Robert Bauman and Nik Kovac. They’ll have their work cut out for them to round-up the eight required votes, but history is on their side. The project was moved to its current preliminary engineering stage on July 16th, 2011 with a 10 to 5 vote on the council. Two members who voted in favor of the project have since left the council, alderman Jim Witkowiak (who was replaced by Jose Perez who is believed to support the project) and council president Willie Hines, Jr. Hines was replaced by Russell Stamper and it’s unclear where he stands on the project. Voting against moving the project forward in 2011 were aldermen Jim Bohl, Davis, Donovan, Joe Dudzik, and Michael Murphy (now council president). A handful of the no votes at that point were issued because of the surprise announcement just days before by We Energies, AT&T and other utilities of an estimated $70 million in utility relocation costs. Engineering work on the project has reduced that estimate to a high end of some $25 million today and as low as $10 million.
Finding additional funds for extending the route will certainly be easier than building the starter system itself. It’s likely the Milwaukee Bucks arena discussion will dictate how the route will traverse Westown, and might even provide funds to extend the route north. At the northeastern end of the route, a proposed high rise by the Mandel Group could be supported with a TIF district, which would allow for partial financing of a route extension towards E. Brady St.
Following the rebirth of the American streetcar in Seattle and Portland, numerous cities have streetcar projects in various states of completion. Cincinnati has a highly controversial project under construction, Atlanta has a starter system undergoing final testing, Tucson has a system that just began operating, Washington D.C. has a system under construction, Seattle has another line serving an entirely new area under construction, Kansas City has a system under construction, and Detroit is underway on a streetcar-light rail hybrid system. All of those systems will likely be in operation before the Milwaukee Streetcar’s planned 2018 start.
The proposed route would have the system run from N. 4th St. and W. St. Paul Ave. through the Third Ward to N. Broadway and N. Milwaukee St. where a directional split would occur as the route turns north towards E. Wells St. At E. Wells St. the two tracks would both be on the street, before splitting again at N. Jackson St. and N. Van Buren St. The route is proposed to again run both directions down E. Ogden Ave. to the intersection with N. Farwell Ave.
The lakefront leg, which would also be built with the final approval, would have the system split east down E. Michigan St. to N. Lincoln Memorial Dr. and then come back west on E. Clybourn Ave.
Provided final approval is granted, engineering work would also be done for the system to be extended up N. 4th St. turning W. Juneau Ave heading into The Brewery. In addition, an extension to E. Royall Pl. just north of E. Brady St. between N. Farwell and N. Prospect avenues will be studied. The engineering work will leave these extensions in a shovel-ready state should future funds be available. Additional extensions would require further study.
According to data from the city, the initial route would be within a quarter mile of 100 percent of downtown hotels, 90 percent of occupied office space, 90 percent of occupied retail space, 77 percent of parking stalls, 77 percent of downtown housing units, 90 percent of major downtown attractions, and 100 percent of downtown’s 20 largest employers.
Milwaukee Streetcar Renderings
Urban Milwaukee Streetcar Coverage
- Who Will Be Streetcar Operator – Michael Horne – May 8th, 2014
- A Streetcar Named Cooperation? – Dave Reid – April 27th, 2014
- How a Streetcar Spurs Development – Angie Schmitt – November 3rd, 2013
- Streetcar Social – Michael Horne – September 12th, 2013
- Mayor Says Streetcar is a “Trojan Horse” – Michael Horne – April 17th, 2013
- Whoops, We Changed Our Mind – Dave Reid – September 27th, 2012
- Battle of the Bobs: Donovan vs Bauman Streetcar Press Conference – Jeramey Jannene – May 18th, 2012
- Important Hoan Bridge and Milwaukee Streetcar Meetings This Week – Dave Reid – November 14th, 2011
- Milwaukee Streetcar Passes Common Council – Jeramey Jannene – July 26th, 2011
- Keep the Milwaukee Streetcar Moving Forward – Jeramey Jannene – July 8th, 2011
- Milwaukee Streetcar at Apex – Jeramey Jannene – June 16th, 2011
- Milwaukee Streetcar Takes Key Step Forward – Jeramey Jannene – May 6th, 2010
- Milwaukee Streetcar Meeting This Thursday – Jeramey Jannene – October 5th, 2009
- Milwaukee Streetcar Routes Unveiled by Mayor Barrett – Jeramey Jannene – September 21st, 2009
- Milwaukee Streetcar Round-Up – Jeramey Jannene – April 19th, 2009
- Vote for your Favorite Milwaukee Streetcar Route – Jeramey Jannene – March 25th, 2009
- Design Your Own Streetcar Route – Jeramey Jannene – March 23rd 2009
- Streetcars Coming to Milwaukee – Dave Reid – March 14th, 2009