Wisconsin Center’s planned expansion delayed by pandemic
Travel, market need to rebound before restart
The Wisconsin Center’s planned expansion — the largest development pending in the Milwaukee area — is being delayed indefinitely because of financial turmoil tied to the coronavirus pandemic
The downtown Milwaukee convention facility plans to double its space with the expansion, which could cost up to $425 million.
The Wisconsin Center District, the state-created agency that operates the facility, plans to finance the expansion by borrowing those funds through a bond sale.
That sale had been tentatively set for April 20 — assuming the center district’s board approves the proposal at its April 2 meeting.
But, with financial markets tanking because of the economic devastation tied to the pandemic, that bond sale will be delayed indefinitely, according to Marty Brooks, center district president and chief executive officer.
“We’re in such uncharted territory,” Brooks told the Journal Sentinel Friday.
“Whether this is a two-month delay or a six-month delay,” he said, “it’s way too soon to tell.”
The good news, Brooks said, is that executives at Baird & Co. and Morgan Stanley Co., the two investment firms managing the bond sale, believe the market will eventually rebound.
But, along with needing demand from investors interesting in buying the bonds — so the center district can borrow up to $425 million — the project also needs to see a rebound in the travel, restaurant and hotel industries, which pandemic concerns have virtually shut down.
That’s because the center district finances its operations with taxes on Milwaukee County hotel rooms, restaurant and bar tabs, and car rentals.
That center district relies on those tax revenues to make payments on its
debt, including the 40-year bond debt that would be tied to the expansion.
So, the bond sales won’t occur until those industries are back on their feet, Brooks said.
Once the bonds are sold, the center district would spend six to eight months on final design work before beginning construction, he said. The project would take two years to complete.
It calls for adding 112,000 square feet to the facility’s main exhibition hall for a total of 300,000 square feet.
The development also would create a second ballroom with an outdoor terrace and add meeting rooms, indoor parking spaces and loading docks.
Expanding the Wisconsin Center would allow it to attract more conventions and trade shows, which would generate more spending by visitors, according to a December study by HVS Global Hospitality Services, a consulting firm based in Westbury, New York.
Annual direct spending of visitors to the Wisconsin Center, now estimated at $105 million, would increase to $154 million by the expansion’s 2023 completion and to $193 million by 2025, the consulting firm said.
Full-time jobs at hotels, restaurants and other businesses tied to that spending, now estimated at 800, would increase to 1,200 in 2023 and 1,500 in 2025, according to the HVS report.
Much of the projected increase in convention bookings is tied to the expansion’s second ballroom.
That would allow Wisconsin Center to book more than one major meeting at the same time.
The Wisconsin Center opened in two phases, in 1998 and 2000. The third phase would be on what are now convention center parking lots between West Wells Street and West Kilbourn Avenue.
Brooks noted that the bond sale initially was set for May or June. That scheduled sale was moved to April to take advantage of what was then an increased demand from investors.
Now, the sale is on hold indefinitely because of the sudden changes in the financial markets.
“None of us have ever seen what’s happening now,” Brooks said.