Committee Approves Milwaukee Streetcar

The proposed Milwaukee Streetcar starter system was advanced today at a marathon meeting of the Common Council’s Zoning, Neighborhoods & Development Committee. Four of the five members of the committee voted to approve using two tax-incremental financing (TIF) districts to fund the construction costs of the system following extensive positive public testimony and presentations by Mayor Tom Barrett, Department of City Development commissioner Rocky Marcoux (PDF), The Couture developer Rick Barrett, and The Couture architect Matt Rinka. The project is still on track for a December 16th Common Council vote and appears to be gaining supporters. Alds. Ashanti Hamilton and Willie Wade, Jr. added their names as co-sponsors of the legislation.

The Mayor’s Presentation

An all-hands-on-deck streetcar push by the mayor’s office had Barrett himself making a rare appearance before a Milwaukee Common Council committee. Mayors rarely address the council.  According to Barrett, who has served in the position for more than a decade, this was the first time he could ever remember making a presentation to the council using a slideshow (which he drew laughs by noting it wasn’t a Marcoux-style presentation–  known for their length, high energy and fast pace). The mayor’s presentation (PDF) focused on three key areas: why this project, why downtown and why now.

Why This Project?

Barrett’s hammered on the notion that the streetcar is a tool for economic development and a piece of a comprehensive transportation system.

The mayor noted that “we have to attain and attract more business” and that the streetcar would generate “investment and growth along and near the route.” He highlighted at length the success of similar systems in Portland, Seattle and other cities. As for the streetcar competing for scarce resources, including the federal funds that enable it, Barrett noted that “we have not starved our local streets and we don’t intend to.” Barrett pointed out that under his administration, the street replacement cycle has gone from 108 years per street to 62 years.

He went on to explain the legislation authorizing the $54.9 million in federal funds mandates the funds must go for a streetcar system. It would take an act of Congress to reallocate them to something else. The mayor indicated his belief that if Milwaukee doesn’t spend the funds on a streetcar, cities like Cincinnati or St. Louis would push for the funds to be re-allocated to their streetcar projects.

Also an issue with federal funds is the Downtown Transit Center, which would be replaced by The Couture. Barrett shared his belief that if the “bus barn” wasn’t replaced with another transit use, the federal funds used to build it would need to be repaid to the federal government. By routing the streetcar to the lakefront via The Couture both projects become feasible, he added. On the jobs front, the mayor stated the project would create 720 construction jobs and fund numerous workforce development and training programs. He also pointed out that economic development along the route would generate employment opportunities.

Why Downtown?

The mayor used a data-driven argument to show the project would “get it right out of the gate.” Downtown, he noted, is the city’s central business district, with 80,000 workers, 25,000 residents and 5.5 million annual visitors. The route would pass 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, 90 percent of downtown attractions and all of downtown’s 20 largest employers

Citing the census bureau’s average-weighted density figure, the mayor noted that Milwaukee ranks 14th and is the highest-ranked city without a fixed rail transit system. In the top 40 cities by average-weighted density, the only cities without fixed rail transit are San Antonio, Fresno, El Paso, Wichita and Raleigh. Barrett argued that much of the metropolitan region doesn’t have the density to support a streetcar system, but Downtown and many areas around it do.

Why Now?

Barrett’s argument here was pretty straightforward. The council had previously voted to authorize engineering the streetcar to 60 percent completion. After the legal challenges put forth by the state, they’re now at that point and ready to move forward. He noted they’ve worked through the utilities challenges (detailed below). As he referenced earlier in his presentation, the mayor is looking to continue the momentum from the $5 billion in projects since 2005, including those completed, under construction and planned for development.

Barrett ended his presentation by stating “it is important for us to double down on the future of this city.”

Utilities Cost

The cost to relocate the utilities for the streetcar project has been an extremely contentious issue. Initial cost estimates put the relocation expense as high as $70 million. A legal challenge continues by the city attorney against the state Public Service Commission regarding its decision that the city must pay the entire cost of relocation (which would be unique to public works projects in this state). But Barrett noted that city engineering work has already reduced those costs by nearly $50 million. All parties involved in the discussion have agreed that as of today the relocation costs for the project would be $22.7 million, Barrett said. He noted that the utilities (of which the biggest is We Energies) have indicated a number of minor route modifications that would drive down utilities costs by millions more. The mayor stated that the city is actively working on those modifications as part of its engineering work. “I am 100 percent confident that number is going to come down by millions of dollars,” Barrett said, concluding his remarks.

Streetcar Cost Breakdown

Barrett presented a detailed cost breakdown of the streetcar during his presentation this morning. Costs

• Maintenance facility: $7.5 million
• 4 Vehicles: $17.6 million
• Phase 1 route: $73.8 million
• Phase 2 route (Lakefront extension): $25 million

Funding Sources

• Federal ISTEA funding : $54.9 million
• Federal TIGER grant: $10 million
• Cathedral Place #49 TIF: $9.7 million
• Erie/Jefferson Riverwalk TIF #56: $18.3 million
• East Michigan St. TIF #82: $31.0 million

Project Schedule

The mayor’s presentation laid out the following schedule for the project.

• Vehicle selection: 2015
• Final design: 2015
• Construction: 2015-2017
• Streetcar operations: 2018

Milwaukee Journal Sentinel Called to the Table

In a strange twist of standard operating procedure, Ald. Willie Wade asked if a reporter from the Milwaukee Journal Sentinel was present, and then called that reporter to the table to answer questions. The paper’s new city hall reporter, Crocker Stephenson, came forward (under no legal requirement to do so, as chairman Jim Bohl noted). Wade rhetorically asked Stephenson if he had heard Marcoux state that the funds couldn’t be used for anything else. He then went on to ask why the Milwaukee Journal Sentinel keeps printing that they could be, which drew lots of laughter (and some gasps) from the room. Ald. Robert Bauman interrupted to note that he didn’t think it was the fault of the paper, but some of his colleagues (clearly a dig at Ald. Robert Donovan and maybe others) distributing false information. The strange exchange resulted in lots of laughs, including by Stephenson and Wade, but also drove home a oft-misunderstood point. According to federal law dating back to 2011, the $54.9 million in federal funds cannot be used for anything other than a streetcar project in Milwaukee. The only way to change this would be to get Congress to re-appropriate the money. The state’s rejection of the $823 million in high speed rail funds illustrates what is the more likely result: when one state rejects the funds they go to similar projects in other districts.

Redevelopment Authority Bonding

In his ongoing quest to kill the project, Donovan has put forth the argument that the use of redevelopment authority (RACM) bonds to pay for the infrastructure is a way to avoid any referendum on the project. The bonds by the redevelopment authority offer a better deal for the taxpayers because they’re not secured by city tax revenues, but instead by project revenues. Marcoux noted that they don’t always use RACM bonding, but it is commonly used and is nothing unusual.

Alderman Bauman rhetorically asked Department of City Development Commissioner Marcoux, “this is not some gimmick we dreamed up in the 11th hour, this is a well-used, well-worn funding mechanism the city has used?” Following up on the use of the bonds, alderman Bohl asked if they could exceed cost projections out of the TIF districts (and their bonding) without council approval. Marcoux answered that they could not, and would need to come back to the council for approval for any changes.

Future Extensions

The city is eager to get to work on the extensions for the project. Marcoux noted the mayor has directed the project team to move forward with extension planning immediately in 2015. Marcoux intends to issue a request-for-proposals in January 2015 to plan the four extensions (UWM, Bronzeville, Marquette/Avenues West and Walker’s Point/Bay View/airport). Responding to a question from Alderman Jose Perez, Marcoux noted how eager they are to get extensions in the ground (as the mayor said during his speech, it is a “trojan horse” designed to get into the ground and expanded quickly). Marcoux had earlier stated that they are working on a timeline that could have extensions breaking ground before the first phase even finishes construction.

Speaking in Favor

A number of people spoke in favor of the proposed streetcar system. I’ve included them below and the organizations they noted they were representing. Speakers included Michael Cudahy (Discovery World), Juli Kaufmann (Fix Development), Bill Sell (citizen), Jerome Knapp (BID #8 – Historic King Drive), Beth Wierick (BID #21 – Milwaukee Downtown), Nick Johnson (Hilton Garden Inn), Dan Bukiewicz (Milwaukee Building and Construction Trades Council), Dr. Eve Hall (African American Chamber of Commerce), Gary Grunau (citizen and owner of Schlitz Park), Earl Buford (Milwaukee Area Workforce Investment Board), Teresa Thomas-Boyd (citizen), Jackie Ivy (citizen).

Not speaking, but registering themselves in support included Jorge Franco (Hispanic Chamber of Commerce), Stacie Callies (Westown Association, BID #5 – Westown), Nancy O’Keefe (Historic Third Ward Association, BID #2 – Historic Third Ward), Ken Kramer (citizen), Tony Neira (laborers local #113), Dave Reid (citizen and Urban Milwaukee Publisher).

The Only Opposition

Alderman Tony Zielinski was the only person to speak in opposition to the project. Zielinski, who does not serve on the committee, attempted to introduce an amendment to split the new East Michigan St. TIF district in two. This change would allow for individual votes on The Couture financing and streetcar financing. Finding no support from the committee to introduce his amendment, Zielinski stated that he would attempt to introduce it on the council floor. During Zielinski’s testimony, alderman Bauman asked of Zielinski if he heard developer Rick Barrett say he could not move forward with The Couture unless the streetcar project also happened. Zielinski said he did. Bauman then asked Zielinski if he thought Barrett was a “liar or incompetent?” Zielinski said he disagreed with the characterization, but clearly things were getting testy. Alderman Bohl stepped in to ask for civility. Zielinski went on to say that he had an article from 2012 that said the project could move forward without anything else (waving a BizTimes article in his hand), and that he thought things could change again. This drew no response from the committee.

New Streetcar Supporters

The streetcar project has long had two active champions on the council, Bauman and Nik Kovac. But it appears others are jumping aboard. Alderman Hamilton asked to be added as a co-sponsor and noted “it really is time for us to embrace something that is bold enough to have a reverberating impact across the city. Downtown is everybody’s neighborhood. This is where everybody comes.” Hamilton also noted that he was sitting in on the committee for Kovac, who is out of town. Alderman Wade also asked to be added as a co-sponsor. Clearly aimed at referendum backers alderman Donovan and Davis, Wade stated “this is why we are elected. To make bold, courageous decisions, even when we’re staring in the face of opposition. That’s what leaders do.”

Today’s Vote

The committee, including committee substitute Ashanti Hamilton, voted 4 to 1 to approve both of the TIF distrcts as financing mechanisms for the streetcar’s construction (and for the public infrastructure portion of The Couture). Aldermen Bauman, Hamilton, Perez and Wade voted in favor. Committee chair Jim Bohl voted in opposition.

Moving Forward

The project will be voted on Wednesday morning by the Public Works Committee chaired by Bauman. That committee could possibly vote against the proposal, although its impact on the eventual full council approval of the project is unclear. The Public Works Committee is made up of streetcar sponsors alderman Bauman and Wade, mayoral candidates and streetcar opponents aldermen Davis and Donovan and Bohl, who voted against the project today, but was cordial in allowing it to move forward. Regardless of what happens on Wednesday, the project will be heard in a full meeting of the common council on December 16th.

Streetcar Map and Renderings

Urban Milwaukee Streetcar Coverage

• Committee Takes No Action on Streetcar – Jeramey Jannene – December 10th, 2014
• Committee Approves Milwaukee Streetcar – Jeramey Jannene – December 9th, 2014
• RACM Approves Tax Funding for Streetcar – Michael Horne – December 8th, 2014
• How to Sell the Streetcar – Michael Horne – November 28th, 2014
• Next Stops for the Streetcar – Michael Horne – November 24th, 2014
• Barrett Moving Forward with Streetcar – Jeramey Jannene – November 18th, 2014
• 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

Have an Opinion?

Let the Common Council and Mayor know what you think about the project via the form on our website. We’ll keep it open until the expected project vote on December 16th.