Marcus Center Cast Into Limbo

“We’re in limbo,” says Marcus Center for the Performing Arts president and CEO Paul Mathews. “This is a very difficult situation.

Mathews made this statement at meeting last week of the Milwaukee County Parks, Energy and Environment Committee Committee, where the fate of the Marcus Center was on the agenda. The county-owned facility has a long history (since 1969) as a key player in the city’s arts scene, where groups like the Milwaukee Symphony Orchestra and Milwaukee Ballet have long performed. The Marcus Center gets county funding and charitable dollars and is run by its own board as a non-profit arts organization, but is now supposed to come under the governance of the Wisconsin Center District (WCD), and no one seems to know just how that will work.

In July, the state law passed to provide funding for the new Bucks arena put the arena under the control of the WCD, where it will benefit from taxes (like the hotel, car rental and food and beverage taxes) collected by the district. But the law also included a provision mandating transfer of an “unencumbered” Marcus Center to the Wisconsin Center District “as soon as practicable.” Neither condition was defined: unencumbered is presumed to mean “without debt,” but could it also mean without needing any major repairs?

The WCD currently manages the Wisconsin Center convention hall, the UW-Milwaukee Panther Arena and Milwaukee Theatre. The new law turns the WCD into a “super-district” in order to tap the WCD’s taxing authority to borrow $93 million for arena construction. Taxpayers will also fund the arena through city, county, and state commitments totaling $250 million (about $400 million with interest).

So how did the Marcus Center become entangled in this arena deal? Assembly Minority Leader Peter Barca (D., Kenosha), one of nine elected officials on the new 17-member WCD board, recently said, “There was not a great deal of discussion” about the transfer and that it was apparently included in the state law at Milwaukee County Executive Chris Abele’s request.

Although worried Milwaukee citizens contacted legislators before the arena-bill vote requesting that they remove the unexplained Marcus provision, the Assembly leadership would not introduce any amendments. Milwaukee Rep. Jonathan Brostoff, who voted against the arena bill, said representatives were told the goal was to pass the bill without any delay.  Legislators’ eagerness to go on vacation may also have been a factor.

When asked if Abele or his staff had consulted Marcus leadership before the transfer, Matthews said “Like you, I read it in the paper.” WCD representatives had expressed similar frustration when they were learned about WCD’s multiple roles in the arena deal (including massive borrowing for it). They were also barred from speaking before the state Joint Finance Committee when others involved in the deal were invited to present.

In return for supporting the arena deal and pledging money, Abele was given expanded and controversial new powers as county executive, including the ability to sell county property without county board approval. But the change of governance for the Marcus Center has no obvious benefit for Abele, unless his goal is to eliminate county funding of the Marcus Center, which he denied in an interview with Urban Milwaukee editor Bruce Murphy.

But some some County Board members have questioned why the county should continue financial support of the Marcus Center, as the Milwaukee Journal Sentinel reported. During the recent county budget deliberations, the board removed Abele’s proposal to provide $3.4 million to do work on a long-term upgrade of the Marcus Center’s heating, ventilation and air conditioning system

Meanwhile, WCD board members are questioning why it is taking over the Marcus Center. In a story by the Business Journal, Joel Brennan, CEO of Discovery World, said, “I question whether we want to rush into another performing venue. I think we ought to go slowly.” In the Journal Sentinel story, James Kaminski said the Marcus Center has “been running itself. Let it keep going.”

WCD board members are unlikely to support providing the center’s annual subsidy, yet county board members may resist continuing a subsidy for a facility they no longer own.

Small wonder Mathews feels like he’s in limbo. Says County Supervisor Tony Staskunas: “The county executive and the Legislature bungled this job. It was a throw-in. Let’s face it—this was all about getting the arena bill passed.” Staskunas, a former state representative, says he believes a “do-over” is possible and proposed bringing all involved parties together, including the public, to envision best-case outcomes for the Marcus.

Teig Whaley-Smith, the county’s director of administrative services, told the parks committee the hand-off plan, though “imperfect, was far from an accident, far from an after-thought.” He said the intent was to bring under one ownership umbrella “four separate entities that are 1,000 feet from each other” to share all revenues, marketing and box offices. He said it was “duplicative” to have separate operations and governance for the BMO Harris Bradley Center; facilities within the Wisconsin Center District, and the Marcus Center, which has four performance spaces and other facilities. A previous statement by Abele expressed hope that management by a single administration “will also ensure that future decisions about each venue, whether about marketing or capital projects, are always made with a goal of maximizing value to all.”

But are joint operations likely if the Marcus Center is not funded by the WCD, as all its other facilities are? And if the WCD does take over the Marcus Center, what’s to stop the county board, which regularly disagrees with Abele, from cutting off all funding to the Marcus Center?

Another critical issue is whether the Marcus Center’s charitable donors, who have helped subsidize the facility, would want their contributions mingled among four facilities that do little arts programming. Will they see these contributions as helping subsidize the Bucks arena or convention center or Visit Milwaukee (whose efforts to promote tourism to Milwaukee also gets funding from WCD taxes)? The only facility under the WCD that seems like a match for the Marcus Center is the Milwaukee Theatre, which books arts and entertainment offerings but is located not 1,000 feet away, but about five blocks from the Marcus Center. And even further away in terms of its governance.

Whaley-Smith used his appearance to repeatedly urge supervisors to devise a plan for supporting the Marcus Center—including with capital funding–until it’s handed off. The board did approve $900,000 for Marcus operational support in the 2016 budget, but the facility is still owned by the county, at least for now.

Supervisors expressed dismay that they were suddenly asked for a transition plan when neither they nor county residents, who own the complex, were consulted earlier. Parks committee chair Gerry Broderick said his preferred plan was for the Marcus Center to remain a county asset committed to serving area residents. Broderick asked Whaley-Smith if he knew any precedent for the state giving a county asset to a third-party, especially without a request by “the people’s representatives.” Whaley-Smith said he would look into it.

Though state law now gives Abele the power to dispose of the Marcus Center and other non-park county property without board approval, Whaley-Smith noted that board members still “control the purse strings,” which is why he was imploring them to continue funding the Marcus Center. Supervisors Khalif Rainey and Steve Taylor asked if Abele would hold public hearings about the arts center’s future. “I can certainly make that request,” Whaley-Smith said. Board members seemed doubtful this would happen, but given opposition by them and WCD board members to the transfer of authority, Abele may have no choice.

Indeed, Brennan encouraged the WCD board to consider passing a resolution to postpone transferring the Marcus Center, perhaps until the new arena is built–now scheduled for 2018. The parks committee, which oversees cultural entities, had invited a WCD representative to report. Its board declined and CEO Russell Staerkel sent a statement saying it would be “premature” to comment until the board defines a position. The WCD board could revisit the issue at their December 18th meeting.

Several civic leaders have challenged Abele’s “efficiency” rationale for unmooring the Marcus. Matthews told supervisors that the Marcus Center runs a “very lean operation; we are not top-heavy.” During his 10-year tenure, the nonprofit set a goal of gradual self-sufficiency and has been weaning itself from county funding. It’s thriving despite a 35 percent decrease in public support, he said.

Long-term, Matthews is looking to replace the Marcus Center’s parking garage located across the street on land leased from the city. The idea is to build higher, creating a mixed-use development that would expand the potential revenue streams. But to secure financing, the Marcus Center would need a long-term lease, which it now lacks. The confusion over its governance makes that project an impossibility.

Brennan argues that effective collaboration among publicly funded entities could be achieved without mingling under one umbrella. Matthews said that the Marcus already collaborates on projects with partners that rent their facilities. He said its resident arts groups (also including the Florentine Opera and First Stage children’s theater) want to “make future commitments” and that sponsors and donors want the issue to be resolved. Uncertainty about the Marcus Center’s prospects is breeding chain-reaction skittishness.

Although legislators did not set a time frame for transferring the Marcus Center, state budget director Michael Heifetz told WCD board members, “I wouldn’t say [the board] can forever decline,” according to the Journal Sentinel. The district board must request the hand-off and the county executive must issue a proclamation supporting it. Undoing the planned transfer would require new legislation.

For now, Abele’s dream of greater “efficiencies” among disparate neighboring organizations may be stalled for a while. And if the county board makes it clear it won’t fund the Marcus Center after the governance shift, it’s hard to imagine the WCD board ever requesting to take over the arts center.