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City, Wisconsin Center District agree to revised service-and-benefits deal after prior pilot yielded no payments; new annual guaranteed payment begins in 2026
Summary
After renegotiation, Wisconsin Center District agreed to annual guaranteed payments to Milwaukee beginning in 2026 (initial $500,000 with a 2.5% annual escalation); the committee approved airspace lease changes and adopted the revised services-and-benefits resolution.
The Milwaukee Department of Administration, with the comptroller and City Council negotiators, presented a renegotiated services‑and‑benefits agreement with the Wisconsin Center District (WCD) to the Finance & Personnel Committee June 18. The revised deal replaces a 2020 pilot agreement that — owing to a complex ‘‘net income/net revenue’’ formula — produced no payments to the city in recent years.
Under the new terms presented to committee members, WCD will begin making guaranteed annual payments to the city starting in 2026. The administration said the initial payment will be $500,000 in 2026 and that amount will grow at 2.5% per year thereafter. Presenters said the new structure removes the conditional net‑income trigger that had resulted in $0 payments under the prior agreement.
The negotiation also revises annual airspace lease arrangements tied to physical skywalk and airspace rentals adjacent to the Baird (convention) Center; the city’s existing small annual rents for those airspace leases (about $23,300 a year in aggregate) will be subtracted from the new annual payment on an annualized basis. The administration described the new schedule as providing more predictable annual revenues for the city: the administration reported the aggregate present‑value (aggregate over remaining 35 years of the original 40‑year term) at about $27.5 million in total payments under the new schedule.
Negotiators said the prior pilot agreement’s definition of ‘‘net income’’ included deductions (depreciation, capital amortization and other accounting items) that allowed WCD to report no qualifying net income for multiple years and therefore not make payments. The prior structure had therefore created recurring budget uncertainty for the city.
The service-and-benefits agreement also includes “enhancer” commitments by WCD: modest, non‑quantified commitments to participate in city job‑training programs (earn‑and‑learn), engage with Employ Milwaukee on hiring/referral opportunities, utilize the city’s small‑business contracting outreach when feasible, and support the city’s anti‑displacement MKE United fund through outreach or referrals. Negotiators described those measures as additional community benefits rather than fixed dollar offsets.
Committee members debated the broader fairness of pilot agreements and tax-exempt treatment; some council members said WCD’s holdings and the district’s use of state-authorized room‑tax revenue to service debt complicate the city’s leverage. The administration argued that the new agreement yields predictable annual revenue in lieu of the prior agreement’s all‑or‑nothing arrangement.
The committee passed the airspace lease ordinance by unanimous consent and adopted the renegotiated service‑and‑benefits agreement in a roll call vote.
