The planned expansion of the Wisconsin Center again has the city's backing following a meeting of the Milwaukee Common Council on Tuesday.
Council members opted not to override a veto from Mayor Tom Barrett on a move to rescind the city's previous endorsement of the project. They also endorsed the framework of an agreement with the Wisconsin Center District, the owner of the downtown convention space, which could among other things provide the city $41.5 million in additional tax revenues over a 40-year period.
WCD's Board of Directors
earlier this month approved the roughly $420 million expansion project, which would
double the size of the Wisconsin Center. This was after Common Council
reversed their previous approval of the project’s financing plan.
Council members reversed course because they wanted WCD to return a portion of the local hotel-room tax revenues it received annually to the city. They also called for commitments to certain inclusion goals during the construction process.
The project needed city approval in order for WCD to rely on the state's moral-obligation backing of up to $300 million in district borrowing. Alderman Michael Murphy noted the state backing would allow WCD to save between $30 million and $50 million in interest payments.
In recent weeks, WCD chief executive officer Marty Brooks has worked with city leaders, including Common Council President Ashanti Hamilton and representatives of the Barrett Administration to forge an agreement addressing these concerns.
Per the agreement, starting in 2025 the WCD would annually give the city $1 million for the district’s first $30 million in net income, and another $1 million for each additional $10 million in net income above the initial $30 million. The city would in the meantime receive from WCD payments of $250,000 in May 2022, $500,000 in May 2023 and $750,000 in May 2024.
WCD officials also agreed to tie the project to small business and minority-owned business contracting goals, as well as resident-hiring requirements under the city's Residents Preference Program.
"They're not required to do any of it, but they're agreeing to do so" in order to have a positive relationship with the city, Hamilton said Tuesday.
But others criticized the agreement for a couple of reasons. Alderman Robert Bauman argued the details of the agreement had not been worked out.
"This is really not an agreement," Bauman said. "It’s not even a term sheet, it’s kind of a narrative with some terms laid out. But to my mind there’s a lot of ambiguity (with it)."
Murphy, meanwhile, said he was still against the proposal because the city was being asked to endorse certain assumptions on the project and its economic impact that he believed to be inaccurate.
Hamilton and others, including Alderwoman Milele Coggs, said that if Council members don't back what was before them that the city could end up with no commitments. Coggs noted that Republican lawmakers could introduce legislation eliminating the need of the city's approval of the financing plan. This would take away any leverage the city has in getting WCD to commit to these agreements.
Republican state Rep. Joe Sanfelippo, who is also a WCD Board member, said at the WCD board meeting the city was using their endorsement as an opportunity to in effect “shake down” WCD for more than $40 million. He said he would back a state bill that would eliminate the need for the city to endorse the project in any way.
"We just need to be 100% transparent about what we’re voting on here today," Coggs said.
The Common Council ultimately voted 9-6 against overriding Barrett's veto of reversing prior project approval. Members then were unanimous in endorsing the agreement with WCD.
A final agreement will need to be worked out between WCD officials and the city attorney's office.
WCD Board members in early April specifically authorized district managers to issue bonding to finance the expansion project and related costs. A final approval on the financial package will be needed from the board's Governance Committee.
The board also granted Brooks the ability to negotiate the agreement with the city. However, this did not allow the agreement to be changed in any substantial way without getting another approval by the board.
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