Why The Hop’s Expansion Plans Went Off the Rails

Why The Hop’s Expansion Plans Went Off the Rails

The Hop skipped a jump. Here’s why – and what it will take to get back on track.

If all had gone according to plan, Democratic National Convention delegates and other visitors could have been riding Milwaukee streetcars from the Wisconsin Center to lakefront attractions next summer. 

But those plans have veered far off track. The Hop’s 1-year-old starter route, the 2.1-mile M Line, will still be the only part of the system operating by the July DNC. The 0.4-mile L Line to the lakefront will still be a collection of uncompleted tracks and unused stations. And the 0.4-mile M Line extension to the convention center, along with a proposed new route to Bronzeville and Walker’s Point, will still be on the drawing board.

All three extensions have become entangled with the economic development issues that have been the driving force behind The Hop’s creation and now could decide its future.

Mayor Tom Barrett, The Hop’s leading champion, sees the delay as a temporary bump on the road to his vision of a broader streetcar system. Bay View Ald. Tony Zielinski, one of Barrett’s opponents in the February mayoral primary, sees it as a stepping-stone to his goal of shutting down the existing line. Downtown Ald. Bob Bauman, a streetcar supporter, blames Barrett for strategic missteps that could jeopardize The Hop’s long-term financing.

But while Bauman predicts streetcar expansion will be on hold until after the city’s April general election, Common Council President Ashanti Hamilton says he expects aldermen to vote on the convention center and Bronzeville-Walker’s Point extensions before then.

That vote won’t do anything for the L Line, the first extension planned and the first to stall. The lakefront line has been closely tied to The Couture, a $122 million apartment high-rise planned for the former site of the county’s Downtown Transit Center. City Development Commissioner Rocky Marcoux suggested the building include a streetcar transit concourse, allowing the county to sell the site to developer Rick Barrett (no relation to the mayor) at a deep discount without paying back the federal transit aid used to build the lakefront bus terminal. The city’s streetcar construction budget included $17.5 million for the concourse and other Couture improvements.

Marcoux’s idea has backfired spectacularly, in Bauman’s view. While most L Line construction was completed by 2018, the city’s original goal of a 2019 opening has slipped as The Couture encountered repeated financing delays. Now the city has asked the Federal Transit Administration for an 18-month extension of its Dec. 31, 2020, deadline to start L Line operations or pay back $14.2 million in federal aid used to build the line. County officials are talking to the same agency about whether to seek an extension of the same deadline for the transit concourse to open or to pay back $6.7 million in transit center aid.

“Our blunder was in tying a public infrastructure project to a private development that didn’t have financing,” Bauman says. “Right now, it looks pretty silly.”

Bauman says the Barrett administration should have rerouted the L Line around The Couture. Marcoux has said the city will do that only if the building isn’t financed by June 30, 2020

Mayor Barrett says he still thinks the original lakefront route is best, he believes developer Barrett is making a good-faith effort to find financing and he doesn’t want to undercut the county’s transit aid deal. Besides, even if the L Line were rerouted, the mayor says. “There’s no guarantee that the line would be running any sooner.”

Bauman also worries the L Line delay will dampen federal enthusiasm for future grants to help fund expansion. Barrett says the feds will instead consider The Hop’s performance.

The next extension, to the convention center, was supposed to be the quickest and easiest, a $28 million job that could be done in nine months, including a new plaza named for the late civil rights pioneer Vel Phillips. When Barrett rolled it out in May, quick council approval could have allowed completion before the DNC.

But The Hop had become a symbol of longstanding complaints that Barrett and his predecessors favored downtown over neighborhoods. In response, the mayor packaged the convention center extension with $18.8 million to start engineering on the Bronzeville-to-Walker’s Point route.

And that’s when everything fell apart. Barrett’s plan called for the route to end at the corner of S. 1st St. and W. Pittsburgh Ave., while Walker’s Point Ald. Jose Perez wanted it to extend to the corner of S. 6th St. and W. National Ave. Bauman says that dispute alone stalled the package.

“The votes were there in May,” Bauman says. “This all bogged down because of that strategic blunder by Tom Barrett and his administration.”

Barrett shot back, “The fallacy of that argument is that they (aldermen) could have just amended it,” instead of doing nothing.

The controversy highlights the city’s choice to fund the local share of streetcar construction costs entirely through development-oriented tax incremental financing districts. No other city does that, but no other state limits big-city revenue options so strictly, the nonpartisan Wisconsin Policy Forum has found.

Barrett says he couldn’t responsibly push deeper into Walker’s Point without sufficient TIF funding. But the delay jeopardizes funding on the Bronzeville end, where TIF districts could expire before that part of the route is paid for, city development spokesman Jeff Fleming says.

Meanwhile, north side Ald. Russell Stamper and several colleagues demanded the Barrett administration deal with neighborhood development issues before they would vote for streetcar expansion. They sought a fund to help neighborhood residents pay rising property taxes and stay in their homes if The Hop triggered gentrification; an economic development fund targeted at the central city; and job-training funds to help create businesses along the streetcar route.

Robert Schneider, associate professor of urban planning at the University of Wisconsin-Milwaukee, says the Department of City Development has been “really very thoughtful about engaging neighborhoods” to avoid displacing residents and to find out what kinds of development neighbors want to attract or discourage.

Barrett and Hamilton praise the coalition of business and community groups that have created a $300,000 anti-displacement fund. Hamilton says he also sees progress, “but not as much as I’d like to see,” on public-private efforts to set up a neighborhood reinvestment fund. He also wants job training efforts funded on an ongoing basis, not through TIF districts.

Stamper’s final demand was for a sponsorship fund to help pay streetcar operating costs. Bringing that issue to a vote this spring could trigger an election-year debate about financing The Hop’s operations after 2020.

Through next year, a three-year federal grant pays about 75% of the streetcar’s roughly $4.5 million annual operating costs. Much of the rest is covered by a 12-year Potawatomi Bingo Casino sponsorship that allowed free rides for The Hop’s first 12 months. And after the Barrett administration surprised aldermen by deciding not to start charging fares in November, the Everstream fiber optic company agreed to sponsor free rides through the end of this year.

Barrett and Bauman hope to bring in more advertising dollars with interactive kiosks that will provide streetcar and visitor information at The Hop’s stations, starting next summer. But without significantly more sponsorships, advertising and fares, Barrett may have to turn to his fallback plan to subsidize The Hop from the city’s parking fund. That move, however, could reduce the approximately $17 million a year in parking revenue now transferred into the city’s general fund to hold down property taxes.

Streetcar opponent Zielinski says he would avoid that problem by seeking federal permission to stop running The Hop without paying back any of the $78 million in federal aid used to help build and operate the system.

Bauman, however, says he doubts The Hop will be much of an election issue in 2020, based on the failure of streetcar opponents to gain traction in the 2012 and 2016 mayoral and council elections. He believes the council would agree to use parking revenue if need be.

“Public transit is typically subsidized in some way,” Hamilton says. “We should be honest about that subsidy.”

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