The Wisconsin Center District will spend $60,000 on a feasibility study to determine if a larger convention center is needed in downtown Milwaukee and if so, how much more space is necessary to attract more events to the city.
Studies have been done in the past, showing that larger convention and meeting space is necessary to compete with other so-called tier-two cities, but district chairman and Department of Administration Secretary Scott Neitzel said he wants to examine fresh data before making any decisions.
“I would like us to make a decision based on data,” Neitzel said. “Let’s start with data rather than hire a consultant to back up our decision.”
The city of Milwaukee is awaiting the district’s decision on expanding the convention center before moving forward with its own decision on two proposals for a key site in downtown Milwaukee. In June 2016, the city issued a request for proposal to redevelop a two acre site at Fourth and Wisconsin. Two viable hotel proposals have come forward, both dependent on the expansion of the convention center.
Jackson Street Holdings, LLC is proposing a $279.6 million plan that includes three hotels totaling 506 rooms, 103,000 square feet of convention space and 22,000 square feet of street-level restaurants, bars and cafés. Jackson Street is asking the Wisconsin Center District to pay for and own the convention and meeting facilities portion of the project.
Marcus Hotels & Resorts submitted a proposal that calls for a 276-room expansion of the existing Hilton Milwaukee City Center hotel and a tower with up to 200 apartments. Marcus has said they will not move forward with the project if the convention center is not expansion.
The current convention center, which was built in 1998, is 266,000 square feet, with about 189,000 square feet of exhibit space. By comparison, Cincinnati has 196,800 square feet of exhibit space at its convention center; Columbus has 373,000 square feet; Minneapolis has 475,000 square feet; and Indianapolis has two convention venues totaling 749,000 square feet of exhibit space.
Tampa, Florida-based Crossroads Consulting will begin work on the feasiblity study immediately. The study will likely take two to three months.
What it won’t reveal is how much an expanded convention center will cost or how the district will pay for it.
Previous studies have estimated the cost to be $225 million to $240 million.
The district is funded by three Milwaukee County taxes: a 2.5 percent tax on hotel rooms, a 3 percent tax on rental cars, and a 0.5 percent tax on food and beverage; plus an additional 7 percent tax on hotel rooms in the city of Milwaukee.
The only tax the district board has the authority to raise is the Milwaukee County room tax, to 3 percent, which would generate an additional $1 million per year.
The Wisconsin Center District would need the authorization of the state Legislature and Gov. Scott Walker for it to make any other tax increases, although Walker has said he opposes any tax increase.
“I guess I’m beginning to wonder if we do all kinds of plans but in the end someone says there is no money, we are just wasting our money doing all of the plans,” said Steve Marcus, district board member and chairman of the board of Marcus Corp.
Neitzel disagreed, saying he wanted to do things in the right sequence.
“It’s not just what the bricks and mortar will look like,” he said. “What is the financial capability and do they all match up, will they ever match up and then look at the harder decisions we have to make.”
Earlier in the meeting, representatives from the Milwaukee Bucks talked about a need in the city for more four and five-star hotels and a larger convention space. Alderman Robert Bauman said, knowing that, the district should have an immediate concern with expanding the convention center and the positive affect it could have on the city’s economic development.
“It’s a political question,” Bauman said. “If you are interested in economic development in Milwaukee, then the convention center changes. If not, fine, then we are status quo. But if you are in favor of job creation, then you need to expand the facility and you’ve got to raise taxes by a percent. It’s pretty straightforward.”
