Milwaukee’s Million Dollar Pipeline

1600 E. College Ave. pipeline. Map from the Department of City Development.

People are always on the lookout for the proverbial money tree. Milwaukee found one that is buried underground.

A fuel pipeline that serves Milwaukee Mitchell International Airport will net the City of Milwaukee more than $1 million over the next 25 years.

It’s free money for allowing a pipeline to continue to run across a city-owned former landfill, 1600 E. College Ave.

The city, with no fee attached, approved a 25-year easement in 1972 to allow a fuel tank farm to cross the property and connect with the airport. In 1997, it renewed the agreement for another 25 years, again with no fee.

“It didn’t pay us a thing,” said Dave Misky, assistant director of the Redevelopment Authority of the City of Milwaukee (RACM) to members of the Public Works Committee Wednesday.

A consortium of airlines that use the fuel, led by Southwest Airlines, will pay the city $30,000 per year with a 3% annual increase through 2047.

Misky said he started trying to reach Southwest, the airport’s heaviest user, in 2022 as the prior easement expired.

“I finally got a hold of the right people at Southwest and negotiated an easement that I think is very favorable for the City of Milwaukee,” said Misky. “In order to establish an easement fee, I was able to identify a formula that is used across the country for these underground easements.”

Aviation fuel easements, unlike many other utility easements, often have an expiration, said the RACM representative.

The only cost to the city was his already-budgeted time and that of the City Attorney’s Office. A signed document means the money will start flowing to the city’s general fund.

“Very good,” said Alderman Robert Bauman.

“So pure profit?” asked Ald. Russell W. Stamper, II. “Good job.”

In 2021, the city also started using above-ground portions of the 44-acre site to make money, and renewable energy.

We Energies, through its Solar Now program, leases the property for approximately $100,000 per year and operates a 2.25-megawatt solar farm on the site. Bauman strategically delayed that lease’s signing to earn the city an extra $13,000 annually after a regulatory authority issued a rate adjustment.

The 10-inch-wide pipeline parallels the Union Pacific railroad tracks along the city site and 128th Air Refueling Wing National Guard base before crossing onto airport property.

Related Legislation: File 221925