Here is my full column that ran in the Washington County Daily News earlier this week.

The Wisconsin Center District broke ground on a huge expansion of Milwaukee’s convention center including a 112,000-square-foot expansion of the expo hall. On the heels of a pandemic and at a cost of $420 million, they must be high.

 

The Wisconsin Center District is a government entity that runs the Wisconsin Center (convention center), UW-Milwaukee Panther Arena, and Miller High Life Theatre. It also owns Fiserv Forum, but that venue is operated by the Milwaukee Bucks. The WCD is funded by revenue from operating the venues, a special sales tax on hotel rooms, a sales tax on food and drinks in local restaurants, a sales tax on car rentals, and a hotel room tax in Milwaukee County and the city of Milwaukee. If you have ever dined or stayed in Milwaukee, you have helped fund the WCD.

 

Milwaukee has always struggled to consistently attract convention business, but with this new expansion of the Wisconsin Center, the WCD is hoping to change that dynamic. The expansion will expand the Wisconsin Center to 300,000 square feet of contiguous space. It will also add 24 additional meeting rooms and at least 400 indoor parking spaces. Finally, the WCD will add six loading docks, an executive kitchen, and a ballroom that will seat at least 2,000 people for dinner.

 

Unfortunately for the WCD, there is very little to support the supposition that the reason that Milwaukee has not been able to attract a substantial number of conventions is because the convention center is too small. The convention center has been expended over the years and the results remain the same. The reason that Milwaukee does not attract many conventions is because it’s Milwaukee.

 

Downtown Milwaukee is lovely and boasts a handful of fun attractions, but there just isn’t enough there to compete with so many other cities contending for convention business. When you couple the meager attractions with runaway crime, an inhospitable city government, and the long, brutal winters, the WCD has always been overly optimistic about the prospects of turning Milwaukee into a destination city for conventions. Furthermore, nobody is really sure if the pandemic- collapsed convention business will ever fully bounce back. Businesses have found other ways to market their wares, and some may never return to their previous convention spending.

 

The WCD has never been shy about spending taxpayer money on fanciful projects despite the slim prospects for success. After all, it’s not their money. For this expansion, the WCD borrowed $420 million.

 

They will pay back those bonds with the venue and tax revenues that they collect. But the state of Wisconsin has guaranteed $300 million of those bonds with state taxpayer money. If the whole thing is a failure, state taxpayers will shoulder the majority of the expense.

 

It is also worth remembering that the WCD’s finances have been in shambles for years. For the last six years, the WCD has run an operating loss every year. In 2014, they ran an operating loss of $16.5 million. In 2015, they lost $17.9 million. 2016; lost $15.1 million. 2017; lost $20.5 million. 2018; lost $24.1 million. 2019; lost $30.2 million. 2020 – the pandemic year; lost $35.7 million. Given the success of the Milwaukee Bucks winning the championship in 2021, the WCD might have eked out a profit, but probably not. The WCD was on the verge of defaulting on its loans last year until the pandemic caused the Federal Reserve to drop interest rates to near zero and the WCD refinanced its loans.

 

Given WCD’s previous financial record, it is a wonder that they could borrow even more on top of what they have already borrowed. But when the payback of the loans are supported by local tax revenue and Wisconsin state government has guaranteed the lion’s share of the loans, the WCD can continue to borrow and spend with abandon.