Marcoux Warns Not Acting Could Jeopardize Streetcar Extension

There is more than the Democratic National Convention creating a sense of urgency on taking action on a proposed, multi-phased extension of The Hop according to the Department of City Development.

Continued inaction by the Common Council would jeopardize the city’s ability to fund the construction of the streetcar’s extension to Bronzeville. The council has held the associated files since mid-May.

An email from Department of City Development Commissioner Rocky Marcoux to members of the council’s Zoning, Neighborhoods & Development Committee warns that further delay would reduce the available funding for the $160 million project by $8.1 million annually.

Mayor Tom Barrett proposed in early May to allocate $52 million to building a .4-mile extension from the Milwaukee Intermodal Station to the Wisconsin Center ($28 million), building Vel Phillips Plaza in part of a city-owned parking lot across from the convention center ($5 million) and performing planning and engineering work on an extension north via Fiserv Forum to N. Martin Luther King Jr. Dr. and W. North Ave. and south via the Historic Third Ward to S. 1st St. and W. Pittsburgh Ave. ($18.3 million).

The original plan was to complete the first extension and plaza by July 2020 for the Democratic National Convention, with the city securing a federal grant to complete the longer extension by 2024.

The entire project, which Barrett has repeatedly billed as fiscally responsible, is proposed to be funded locally by amending five existing tax-incremental financing (TIF) districts that are generating excess incremental property tax revenue after paying for prior development projects. But two of those districts are required to be dissolved under state law within the next five years, which is what triggered Marcoux’s plea to take action.

The convention center extension and plaza would be funded locally, but the city intends to leverage an $80 million federal grant from the Small Starts program to pay for building the longer extension. It would need to match the federal funding dollar for dollar to receive it, which the Barrett administration intends to do by using existing TIF districts.

“If the Common Council does not move forward with the proposed [tax-incremental financing districts (TID)] files this year, those TIDs will likely expire before they can be used to construct the extensions. Without those TIDs, we will lose our path to fund the local match for construction of the Bronzeville Extension indefinitely,” wrote DCD economic development specialist Dan Casanova in a detailed memo to the committee last week.

TIF districts, under state law, have a maximum legal life of 27 years, with no new project funding allowed in the last five years. They are only allowed to fund public infrastructure improvements within a half mile of their boundaries from incremental property tax revenue generated by new development.

District 41 (Time Warner Riverwalk) can be used through the 2021 levy year and District 48 (Park East) can be used through 2024 according to Marcoux. DCD intends to draw approximately $30 million from the districts to match the $80 million grant.

“The combined loss of funds from just those 2 TIDs for each year of delay is approximately $8.1 million annually through 2022 and approximately $5.7 million in 2023 and 2024,” said Marcoux in his email.

Will the committee schedule the files to be heard? The agenda for the Zoning, Neighborhoods & Development Committee will be released later this week. The next meeting is scheduled for July 2nd. Committee chair Alderman Khalif Rainey told Urban Milwaukee last week that he hopes the files can be scheduled.

But plenty of disagreements and wishlists remain in the council. Aldermen Robert Bauman and Jose G. Perez are advocating for a longer extension into Walker’s Point, with Marcoux telling the committee that no area TIF districts are available to fund the work. Ald. Russell W. Stamper, II is advocating for the establishment and funding of anti-displacement, job training and central city development programs. Barrett has said he remains committed to working on those things, but is working with what funding is available and laws regulating it.

Council president Ashanti Hamilton told Urban Milwaukee last week that no deadlines had been given to the council. “We haven’t gotten anything firm to tell us some of these deadlines are something we should worry about,” said Hamilton. The potential mayoral candidate, speaking of the possibility to complete the work by the DNC, said he doesn’t want an artificial timeline on something he says needs to be done right.

Even if the Common Council approves the project at its upcoming meeting on July 9th its unclear if the shorter extension and plaza to the convention center would be complete in time for the DNC. “At this point, even with an approval at the July 9th Common Council meeting, we can no longer guarantee that these items will be done by July 2020,” wrote Casanova in a memo to members of the zoning committee. Casanova offered a list of timing obstacles including the need to provide a 90-day notice to the parking lot operator, the reality that funds wouldn’t become available until July 9th and the availability of vendors to deliver track pieces in time.

Vel Phillips Plaza Renderings

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