City Could Get Cash From Convention Center Expansion
Wisconsin Center District still pushing for expansion even though it can't sell bonds.
The Wisconsin Center District (WCD) has a proposal to provide the city with annual cash payments in exchange for restoring a certification that would save the district up to $50 million on the proposed convention center expansion. But will the Common Council accept it?
On Tuesday, the Common Council revoked a certification required to enable the state’s backing of $300 million in debt related to the $420 million expansion of the Wisconsin Center. Without the state’s backing, known formally as a “moral obligation,” a WCD report estimates that borrowing costs on the project would rise by $40 million to $50 million.
Alderman Robert Bauman led the charge to revoke the previously approved certification as part of a move to force the Wisconsin Center District’s leadership to negotiate with the city over projected surplus revenue. According to financial models by project consultants, the district is expected to have hundreds of millions in excess tax revenue, including from a 7.5 percent hotel room tax that formerly went to the city, over the life of the project’s proposed 40-year bonds.
Prior to the pandemic drastically altering the United States economy, district CEO Marty Brooks had sought an April 2nd vote to approve the financing package without any city support. He indicated support for still doing so in a memo Monday and another sent Friday. “I think the change in circumstances is so dramatic, so dire, that if the Wisconsin Center District is not going to hold up this vote, then we have to,” said Bauman on Tuesday in successfully encouraging his colleagues to revoke the certification.
His strategy appears to have worked, at least insofar as bringing Brooks to the bargaining table. “Over the past several days very productive discussions with multiple City officials and have yielded a Payment in Lieu of Taxes (PILOT) program that both the Common Council and WCD Board could accept,” wrote Brooks in his Friday memo.
The district would provide the city with $750,000 annually for its first $750,000 to $30 million in annual income starting in its 2025 fiscal year. For each additional $10 million in income, not including depreciation, the district would provide the city another $750,000. If the terms of the deal were applied to the district’s past three fiscal years, the city would have received $750,000 in each year.
As part of the deal the city would have to forego revenue from building permits on the expansion and any future WCD projects as well as not levy any new fees or expenses not otherwise required by state or federal government. The district would apply the standard workforce and contracting requirements to the expansion that the city does to all projects receiving more than $1 million in city funds, including that 40 percent of the work hours be performed by unemployed or underemployed city residents.
But the Common Council has not voted on the deal. Multiple council members told Urban Milwaukee they haven’t been briefed on the deal. “As far as the reference to ‘acceptable to the Common Council’ assertion, apparently there was a council meeting over the last two days that I missed,” wrote Bauman. He said his starting position was a third of the hotel tax, which generated approximately $15 million in 2019. He said avoiding a fixed amount would allow the amount to go down during a recession and go up in boom times. He also wants the distributions to start earlier.
Alderwoman Milele A. Coggs, Hamilton and Bauman serve on the district board as the council’s appointees.
Two WCD committees are scheduled to meet virtually on Monday morning to decide whether to proceed with an April 2nd vote. The board would also need to authorize the PILOT agreement with the city.
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More about the Wisconsin Center expansion
- Eyes on Milwaukee: City Approves Wisconsin Center Deal - Jeramey Jannene - Apr 15th, 2020
- Eyes on Milwaukee: Convention Center District Authorizes $420 Million Expansion, Raises Hotel Tax - Jeramey Jannene - Apr 2nd, 2020
- Eyes on Milwaukee: Wisconsin Center Faces 50% Revenue Cut - Jeramey Jannene - Mar 30th, 2020
- Plats and Parcels: City Could Get Cash From Convention Center Expansion - Jeramey Jannene - Mar 29th, 2020
- Eyes on Milwaukee: Council Delays Convention Expansion? - Jeramey Jannene - Mar 24th, 2020
- Plats and Parcels: Convention Center Expansion Paused - Jeramey Jannene - Mar 22nd, 2020
- Plats and Parcels: 11 Key Details About the Convention Center Expansion - Jeramey Jannene - Mar 8th, 2020
- Eyes on Milwaukee: Renderings Released for Convention Center Expansion - Jeramey Jannene - Mar 6th, 2020
- Eyes on Milwaukee: City Wants $5 Million of Hotel Tax Per Year - Jeramey Jannene - Mar 3rd, 2020
- Plats and Parcels: UWM Gets Okay to Partially Demolish Columbia Hospital - Jeramey Jannene - Mar 1st, 2020
- Eyes on Milwaukee: City Okays Convention Center Expansion - Jeramey Jannene - Feb 11th, 2020
- Plats and Parcels: Gilbane, CD Smith Will Build Wisconsin Center Expansion - Jeramey Jannene - Jan 12th, 2020
- Wisconsin Center District Announces Construction Manager for Wisconsin Center Expansion - Wisconsin Center District - Jan 10th, 2020
- Wisconsin Center District Announces Architectural Team for Wisconsin Center Expansion - Wisconsin Center District - Dec 19th, 2019
- Plats and Parcels: River One Apartments Construction Starts in March - Jeramey Jannene - Dec 1st, 2019
- Plats and Parcels: New Apartments Near Streetcar Line - Jeramey Jannene - Oct 20th, 2019
- Convention Center Expansion Advances - Alana Watson - Aug 17th, 2019
- Wisconsin Center District Board Unanimously Passes Resolution Regarding Exposition Center Expansion - Wisconsin Center District - Aug 16th, 2019
- Plats and Parcels: State Aids Convention Center Expansion - Jeramey Jannene - Jun 30th, 2019
- Plats and Parcels: Convention Center Expansion Inches Forward - Graham Kilmer - May 20th, 2019
- Wisconsin Center District Updates Timeline for Completion of the Wisconsin Center - Wisconsin Center District - May 10th, 2019
- Evers Budget Overlooks Convention Center - Corri Hess - Mar 8th, 2019
- Plats and Parcels: About That New Convention Center Plan - Graham Kilmer - Jun 17th, 2018
- Plenty of Horne: Downtown Power Brokers Mull Expanded Convention Center - Michael Horne - May 15th, 2014