Convention center expansion would cost $225 million

Agency that operates it unable to borrow amount

Downtown Milwaukee’s Wisconsin Center would cost $225 million to $275 million to expand, according to a new estimate — outstripping the $200 million the agency that operates the convention center is able to borrow.

So officials will look at what they can buy for that lower amount, and whether that less-costly proposal makes sense.

The possible expansion was discussed at Friday’s board meeting of the Wisconsin Center District.

The state-created district operates the convention center, the UW-Milwaukee Panther Arena and the Miller High Life Theater. Its operations are financed in part with taxes on Milwaukee County hotel rooms, restaurant tabs and car rentals.

In September, a consultant hired by the center district said the facility should add around 155,000 square feet to 215,000 square feet, with a bigger exhibit hall and ballroom and more meeting rooms. The center’s current exhibit space, banquet hall and meeting rooms total 265,835 square feet.

That expansion, which would likely go north of the Wisconsin Center on its parking lot along W. Kilbourn Ave., would cost $225 million to $275 million, according to Friday’s presentation by the consultant, Susan Sieger, president of Tampa, Fla.-based Crossroads Consulting Services LLC.

The expanded facility would draw

more events and more people, with visitors spending around $106 million to $116 million annually at hotels, restaurants and other businesses, Sieger said.

That compares to current average annual spending by Wisconsin Center visitors of $74 million, Sieger told board members.

Also, annual local and state taxes generated by that spending would increase from $9.4 million to a range of $13.6 million to $14.8 million, according to her report.

Board members generally agree that an expansion should occur. Other competing cities are expanding their convention centers, Sieger said.

But the district is also using its tax revenue to help finance the new Milwaukee Bucks arena. And its ability to borrow additional funds is limited to roughly $200 million, said John Mehan, a managing director at Baird & Co., the district’s financial adviser.

There has been some discussion of seeking approval from the state Legislature and Gov. Scott Walker to expand the district’s 0.5% restaurant tax to help finance a Wisconsin Center expansion.

But that would “be a hard sell,” said Sen. Scott Fitzgerald, a board member and Senate majority leader.

Scott Neitzel, board chair and Walker’s administration secretary, agreed.

“My feeling is we have the resources we have,” Neitzel said, “and we have to work with those.”

That could include raising the district’s hotel room tax from 2.5% to 3%, which the board could do without legislative approval. There also is the potential of selling naming rights for the Wisconsin Center.

Along with exploring those revenue possibilities, the district will seek more detailed expansion cost estimates, Neitzel said.

Sieger also said an expanded Wisconsin Center would need a new 1,000room hotel next to the facility.

City officials haven’t yet acted publicly on two competing proposals submitted last year to develop hotels on a vacant parcel at W. Wisconsin Ave. and N. 4th St., near the Wisconsin Center. Both proposals depend on expanding the facility.

The Wisconsin Center opened in two phases, in 1998 and 2000. The third phase, north of the center, has long been planned.

The convention center originally was called the Midwest Express Center, which later changed to Midwest Airlines Center when that Oak Creek-based carrier modified its name.

Midwest was purchased in 2009 by Republic Airways Holdings Inc., which also bought Frontier and combined the two carriers under the Frontier name, leading to another name change.

Delta Air Lines then held the convention center name for one year until the contract ended in 2013. It has been known as Wisconsin Center since then.