Council referral: proposed deal with Wisconsin Center District on lease payments and annual pilot payments sent to finance committee

The Milwaukee Public Works Committee referred to the Finance and Personnel Committee a proposed amendment to four airspace leases with the Wisconsin Center District and a related deal that would replace the existing pilot-payment arrangement with a guaranteed annual payment that begins at $500,000 and grows by 2.5% annually.

Why it matters: the proposed deal would change how the city receives revenue tied to downtown convention-center operations and the district's airspace leases (skywalks and overhangs). Committee members and administration officials said the new structure would provide predictable payments after several years of the previous pilot agreement producing no payments to the city.

What happened

The committee discussed an administration-negotiated package that would remove complex pilot-payment language that the city and outside auditors had described as prone to producing zero payments in many years. Under the proposed arrangement, the administration said the city would receive an annual guaranteed payment beginning at $500,000 and escalating 2.5% per year; administration officials presented a projected guaranteed total over the 35-year term (27.5 million dollars guaranteed in the administrations analysis) and said the final-year annual payment would rise into the low seven figures.

Why the council referred the file

Alderman Baumann criticized elements of the deal and the effective net payment after the airspace-lease concessions. Baumann said the city was being asked to waive airspace lease payments that have historically produced small but certain revenue in exchange for the new pilot structure. He argued the city needed broader committee scrutiny of the financial tradeoffs and the district's overall revenue position before approving the change. On the floor, Baumann said, in part, that the Wisconsin Center Districtwas "projecting a net operating income for 2025 of $4,747,000" and questioned whether the city was getting sufficient value for an arrangement that starts at $500,000 annually.

Preston Cole, the director of administration, and Jim Bull, the city's lead negotiator from the Office of Innovation, presented the administration view that the existing pilot language had produced no payments for multiple years and that the new framework provides predictable annual revenue. Jim Bull said the deal removes the arcane language that allowed for no payments and, as he summarized the administration's financial modeling, "we are guaranteed to receive 27 and a half million dollars" under the proposed structure over the contract term. The administration advised that Waukesha County and other partners had also taken procurement actions that affected regional recycling and processing arrangements, which factored into broader downtown financial planning.

Alderman(s) and procedural outcome

Alderman Baumann led the council discussion as sponsor of a related ordinance; several aldermen said they wanted the finance committee to consider the full package alongside other related files, including TID and budgetary implications. The Public Works Committee ultimately voted to refer the airspace-lease amendment and associated documents to the Finance and Personnel Committee without recommendation so that finance members could examine details, legal issues and any closed-session negotiation matters.

What officials said

- "We are guaranteed to receive 27 and a half million dollars in hand," Jim Bull, Office of Innovation, said while summarizing the administrations estimate of guaranteed payments under the proposed deal.

- "This new deal offers an opportunity for the mayor and the common council to put a stake in the ground," Preston Cole, director of administration, said, framing the negotiations as meeting the council's prior direction to secure recurring revenue.

- Alderman Baumann said the prior pilot formula had resulted in no payments to the city in recent years and that the new proposed tradeoffs (waiving airspace rents in exchange for the pilot payments) merited fuller review by Finance and Personnel.

Next steps

The file was sent to the Finance and Personnel Committee without recommendation. Finance will receive the ordinance and related documents for review;committee members indicated legal counsel and possible closed-session negotiations may be necessary to conclude terms acceptable to the city.

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