Supervisors Waffle on Marcus Center

Marcus Performing Arts Center. Photo by Jeramey Jannene.

The Milwaukee County Board’s powerful Committee on Finance has put off making a decision on financial support for the Marcus Performing Arts Center (MPAC).

MPAC is seeking to extend its relationship with the county to ensure the institution is entirely self-sustaining before going independent. County administrators are proposing extending financial support, providing $1.75 million in operating funding and $2.3 million in capital funding during that time.

“What we are trying to do is build infrastructure and allow for a longer term plan that provides self-sustainability for the cultural institution,” said Celia Benton, the county’s director of Economic Development.

But supervisors are entering a difficult budget season, with more financial needs than they can afford to meet and a projected $46.7 million budget deficit. The board could have approved or denied the proposal this past month, but the finance committee decided to pause the decision for now. Supervisors won’t be able to take it back up until September, when the board returns from its August recess.

“I really feel like we’re so close,” President and CEO Kevin Giglinto told Urban Milwaukee. “But we need that time.”

Giglinto joined the Marcus Center in 2023. MPAC’s revenue had been decimated by COVID-19 and then by the loss of the Milwaukee Symphony Orchestra as its primary tenant. He found an institution without a significant annual fundraising program and regular budget deficits draining the cash reserves.

In that time, Giglinto and his team have turned the ship around. Revenue from touring Broadway shows is increasing and becoming the most important source of earned revenue for the facility. They have rapidly built out a strong donor base, growing from fewer than 50 annual donors to more than 1,100. They are renegotiating agreements with vendors and trying to cut costs where they can.

The institution is on track for a break-even budget this year, he said. But it still has a cash-flow problem, or at least, a cash timing problem. Broadway revenue doesn’t get deposited until a show closes its run. Which means the center will not realize a huge chunk of its revenue until after the end of the fiscal year; during that time it is on track to completely deplete its cash reserves.

Giglinto emphasized, and the county officials from the Economic Development Division agreed, that the institution needs a little more time and support from the county to truly achieve fiscal sustainability.

The Marcus Center is a county building; the building and the land are owned by Milwaukee County. In 2016, the county board finalized an agreement that was supposed to create a 10-year off-ramp for the institution to eventually operate on its own without taxpayer support.

During that time, MPAC and the county have both invested in maintaining the building, though MPAC has invested more than the county has. As a result, the Marcus Center is one of the few buildings in the county’s portfolio without deferred maintenance.

“So we’re not just sitting here, just taking money from the county and maintaining their building,” Giglinto said. “We are contributing to maintaining what is a county asset.”

Giglinto said he understands the county’s serious financial challenges and that if the county board wants more time, and financial information before they make a decision, “I have no problem with that at all.”

If the institution does not receive extended funding support, it won’t fold, he said. His team has worked out a number of potential plans to respond.

“We’re going to have to make some very hard choices, and the things that will have to be eliminated or cut or reduced will have to be community programs, arts education programs, and unfortunately, on the capital side, we’ll have to put off some capital improvements,” he said.

The arts and community programs are either not fully funded or don’t collect admission. Rainbow Summer, for example, is a very large event that is free to attend. MPAC has also grown the number of students served at the center in recent years, going from 10,000 last year to 12,000 this year, Giglinto said. A number of these programs are funded in part with donations and if they are reduced, it’s unlikely donations will remain at current levels, he said.

There remains a lot of competition in the Milwaukee donor community and MPAC is still trying to build out a sustainable donor base. Their pitch is not an easy one either. Instead of promising renovations, or a shiny new addition, they are pitching “the future of the institution,” Giglinto said.

If maintenance is deferred, and the building has mounting infrastructure needs, the building will be more difficult for an independent MPAC to maintain.

The center is very close to sustainability, according to Giglinto. Without county support, MPAC will fall behind on maintenance, may be forced to make budget cuts as cash reserves are depleted and could potentially see an erosion of its new and growing donor base. In short, all the things that are being built up to support independence will be hobbled.

Supervisors Put Off a Decision

The decision before supervisors this past month was an amendment to the existing agreement between MPAC and the county.

The deal would provide $450,000 each year in 2026 and 2027, $400,000 in 2028 and $225,000 each year in 2029 and 2030. It would also provide a $2.3 million in funding for infrastructure needs and maintenance by 2028.

Sup. Justin Bielinski was hesitant to approve the deal without a clearer picture of the 2026 budget, and he made a motion to hold the item in committee until the September meeting cycle.

“I guess why should the Marcus Center get to the front of the line for our county dollars when there’s so many other needs that we have that we’re going to discuss today,” he said during the committee meeting. 

Sup. Steve Taylor praised Giglinto and MPAC for the work they’ve done to turn the institution around, but expressed strong opposition to extending county support. The problem for Taylor is that the county already negotiated a 10-year deal to get the Marcus Center to independence and now MPAC is coming back for an extension.

“I mean, we are going to have a terribly difficult budget and future budgets, and now to recommit for another five years,” he said. “This is not a good deal, because we’re committing to this monies that we don’t have.”

He said his colleagues voting to approve an extension would be prioritizing the Marcus Center over parks, senior centers and other county needs.

“The thing is that right now, we have some other very stark realities here at the county, and I really hate to do this, but I’m going to have to be the bad guy today,” said Sup. Juan Miguel Martinez as he made a motion to reject the deal. But the committee never took the motion up.

Sup. Shawn Rolland sympathized with his colleagues’ discontent over the county’s financial picture. The county has been “tough, but fair” with the cultural institutions it is trying divest from, he said. “I agree that this will impact our ability to fund other things on our [infrastructure] budget,” he said. “I’m not happy about that, but it, to me, aligns strategically with what we’ve been trying to do with all of our cultural partners.”

Sup. Anne O’Connor reminded her colleagues that the proposal before them is “a way out.” The board risks allowing the Marcus Center to become yet another county building with growing deferred maintenance.

“If we vote against this today, we’re basically just giving up on our responsibilities,” she said. “We have to see this through. It’s painful, but I know that our Office of Economic Development has centered our fiscal reality, and so this is our way out.”

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