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The performing arts venue's ownership is in question, and no one seems willing to do the job.

At the time, it seemed to be the smallest part of a $500 million deal, barely worthy of attention from the Legislature or the news media. All focus was on paying for a new Milwaukee Bucks arena. Hardly any public debate was devoted to a provision tucked inside the arena legislation that could, eventually, transfer ownership of the Marcus Center for the Performing Arts from Milwaukee County to a restructured Wisconsin Center District.

Within a few months, the proposed ownership transfer started to fall apart, as first the County Board and then the district board rebelled. While they raised questions, uncertainty enveloped the fate of the millions of taxpayer dollars that help the Marcus Center present more than 1,600 concerts, ballets, plays and more to over half a million visitors every year. Its four stages are home to resident groups that include the Black Arts Think Tank members, First Stage, Milwaukee Ballet, Milwaukee Symphony Orchestra (MSO), Florentine Opera Company and Milwaukee Youth Symphony Orchestra – a varied collection of artists who are often regarded as standard bearers in their respective fields.

“We’ve been in limbo,” says Marcus Center President Paul Mathews.

Now the center’s ownership may not change for at least four years, if ever. As of early March, county and Marcus Center officials were scrambling to put together a plan before the April 5 election to preserve long-term county financial aid to the performing arts center.

Left unanswered, however, was the question of why the transfer was written into state law in the first place. Legislators agreed to potentially alter the future of a leading regional performing arts hub without any financial analysis and with less scrutiny by local public officials than in any other transfer of a major cultural asset in Milwaukee history.

So how did we get here? An explainer.

Formerly the Performing Arts Center, the Marcus Center was built in 1969 with private moola, but the building was deeded to the county, to be managed by a nonprofit entity, as it is today. Other entities doing this public-private tango include: Milwaukee Public Museum, Milwaukee Art Museum, Milwaukee County Historical Society, Milwaukee County Transit System.

(Editor’s note: Information found in sidebars in the magazine, including a timeline of Downtown Milwaukee’s cultural landscape and a breakdown of key players in this discussion, can be found at the end of this post.)

Photo by Andrew Slater Photography.

Marcus Center 101: Formerly the Performing Arts Center, the Marcus Center was built in 1969 with private moola, but the building was deeded to the county, to be managed by a nonprofit entity, as it is today. Other entities doing this public-private tango include: Milwaukee Public Museum, Milwaukee Art Museum, Milwaukee County Historical Society, Milwaukee County Transit System. Photo by Andrew Slater Photography.

How did the Marcus Center become part of the arena legislation?

The Marcus Center transfer was included at the request of County Executive Chris Abele, during the closed-door negotiations between state and local officials over the arena financing deal. In the first public indication that anyone opposed Abele’s idea during those talks, Mayor Tom Barrett, who was also at the negotiating table, released a one-line statement to Milwaukee Magazine saying, “I wasn’t supportive at the time and I’m not supportive now.”

Others who might not have been supportive had no say. Officials from the Wisconsin Center District, the Marcus Center and its tenant groups say they had no advance word of the transfer plan. And the legislation specifically foreclosed a County Board vote, following the state’s recent pattern of shifting power from the board to Abele.

Supervisor Gerry Broderick, chairman of the County Board’s parks committee, says he can find no precedent for the state ordering a local government to turn a public facility over to a third party without a local vote. Indeed, historian John Gurda says, the Common Council and/or County Board – or city voters – approved every similar ownership change for major cultural assets.

Why did Abele want this?

Abele has said the ownership transfer is needed to improve customer service, identify additional revenue and eliminate “duplicative expenses” for taxpayer-owned performance venues, citing studies by the district and the nonpartisan Public Policy Forum. But those studies, and discussions led by the Metropolitan Milwaukee Association of Commerce (MMAC), focused on issues like whether the Wisconsin Center District should merge with the Bradley Center, and whether a new regional agency should fund major cultural assets – not on combining the Marcus Center with the Wisconsin Center District.

Abele didn’t respond to specific questions for this article. Instead, spokeswoman Melissa Baldauff emailed a statement reiterating his public comments.

Marcus-Center_map

Well, do the venues duplicate each other?

“There aren’t a lot of shows that blend into each other” among events at the Marcus Center; at the district’s Milwaukee Theatre, UWM Panther Arena and convention center; and at the Bradley Center, which would be replaced by the new arena, says Joel Brennan, a member of both the Wisconsin Center District and Marcus Center boards. The only district venue resembling the Marcus Center is the Milwaukee Theatre, which Mathews doesn’t consider a competitor.

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But the Milwaukee Theatre may have considered the Marcus Center a competitor a few years ago, when the theater was angling for touring Broadway shows, says district finance chief Jeff Sinkovec. The Milwaukee Theatre lost that competition, because of the Marcus Center’s relationship with the Broadway Across America series, say Sinkovec and former district board chairman Frank Gimbel. As a result, nearly all the major touring shows went to the Marcus Center and “we got the scraps,” Gimbel says. So WCD officials changed course, says Sinkovec.

“We had Willie Nelson and Merle Haggard – that was about as far away from Broadway as you could get,” Sinkovec says. “We’ve attempted to be more family- and more variety-[oriented].”

Would this deal improve cooperation between publicly owned venues?

The Marcus Center partnered with the Milwaukee Theatre twice on touring productions of The Lion King, deals in which the Marcus Center essentially rented the Milwaukee Theatre to present a show that better fit that venue, Mathews and Brennan say. Those 2008 and 2014 productions set records for the highest-grossing weeks in local theatrical history, the Business Journal reported at the time. Mathews says he would be willing to consider more collaborations, if they make financial sense.

That demonstrates it’s not necessary to change the Marcus Center’s ownership to improve cooperation, Brennan says.

The district board agreed in December. After board attorney Danielle Bergner opined that the takeover is not mandatory, the board put the idea on hold until at least 2020, while directing its staff to discuss cooperation with the Marcus Center. Among the board members unanimously voting to delay the transfer were three state officials involved in the original talks with Abele – Scott Neitzel, Gov. Scott Walker’s secretary of administration and the current district board chairman; Robin Vos; and Scott Fitzgerald – along with Barrett’s appointees, other city officials and even Abele’s own appointees.

✦ These figures do not include revenue from tickets, parking and donations.

✦ These figures do not include revenue from tickets, parking and donations.

 

Would transferring Marcus Center ownership have any financial impact?

* These numbers do not include interest, which increases the amounts by many millions.

* These numbers do not include interest, which increases the amounts by many millions.

It’s hard to say. District board members and county supervisors have questioned whether the district could replace county subsidies for the Marcus Center. Another issue would be whether the district or the county would be responsible for repaying county bonds issued for Marcus Center capital improvements over the years, says County Comptroller Scott Manske.

But didn’t someone consider this beforehand?

Nobody studied those fiscal questions before the transfer was written into state law, which did not address those issues. Manske and other county, district and Marcus Center officials say no one asked them for any financial analysis while the legislation was being drafted. And state Department of Administration and Legislative Fiscal Bureau officials say they calculated only how the arena deal would affect state finances.

How has the Marcus Center been affected by the uncertainty?

Mathews says he wants to wean the center off county operating aid over the next decade, generating new revenue by replacing its aging parking garage with a mixed-use development that would include parking.

Until then, Mathews says the Marcus Center needs continued county aid for its shows to go on. In addition to annual operating support, the building needs more than $8.6 million in work over the next 10 years, including upgrading its HVAC system; replacing its roof; and repaving walkways, county documents show.

In his 2016 budget, Abele recommended trimming operating assistance from $1.08 million to $950,000 and providing $3.6 million for the HVAC system. Supervisors balked, however, at spending money on a building the county might no longer own. In November 2015, they approved the operating aid but rejected the capital dollars.

And unless the Legislature repeals the takeover provision, “I will fight like mad against dumping county tax dollars into that facility,” Supervisor Steve Taylor said at a Jan. 26 parks committee meeting.

Marcus-Center_annotation_chart

Could the Wisconsin Center District afford to subsidize the Marcus Center?

The district is roughly breaking even on operating revenue and expenses, with UWM Panther Arena and Milwaukee Theatre profits covering convention center losses, Sinkovec says. But the district needs the revenue from its hotel, rental car and food and beverage taxes to pay off bonds on its existing facilities and subsidize Visit Milwaukee, the district finance chief says. And as soon as the district’s largest existing bond is paid off, in 2027, it would have to start using its tax revenue to pay interest on the $203 million it must borrow to build the new Bucks arena, Sinkovec says.

With those challenges ahead, taking on the Marcus Center would seem “a bit reckless,” says district board member Michael Murphy. The district board didn’t request a financial analysis of a takeover because “people just wanted to put it aside,” says Bob Bauman, another board member.

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But the district had studied the finances of taking over another venue – the Pabst Theater. Before the city agreed to sell the Pabst to philanthropist Michael Cudahy, the district looked into acquiring the historic theater, and the numbers didn’t work, Gimbel says.

“The Wisconsin Center District doesn’t have the money” now, Gimbel says. “I don’t know where it would come from.”

So what happens now?

As of early March, Mathews and county officials were drafting a plan to keep county operating aid, phasing it out over about 10 years; continue financing for capital improvements; and grant his organization a 25-year lease on the building, although it’s possible the district could assume the lease. He and Broderick hoped the County Board would approve that plan in mid-March.

That would be the best-case scenario. In the worst case, Mathews warned Broderick’s panel, if the “political stalemate” over ownership and funding continues in 2017, the center’s future will be “in jeopardy.”

“The Marcus Center is a wonderful institution that brings vitality to our community,” Broderick says. “Why we have to find ourselves in these kind of bollixed circumstances is so sad.”

 

Gimbel and Barrett photos by Adam Ryan Morris.

Gimbel and Barrett photos by Adam Ryan Morris.


Key Players

Top row, left: Paul Mathews has been executive director of the nonprofit Marcus Center since 1998, after 12 years as a county supervisor. Hiring the well-connected former County Board finance chairman was seen as a way to strengthen ties with the county, which was providing $1.5 million to the center at the time.

Top row, center: Chris Abele, philanthropist and former MSO board chairman, was elected county CEO in 2011. He committed the county to contributing $80 million to the arena without County Board approval.

Top row, right: Joel Brennan,  president of Discovery World, was appointed to the district board by Barrett and to the Marcus Center board by Abele.

Middle row, left: Tom Barrett, mayor of Milwaukee since 2004, played a pivotal role in the arena deal.

Middle row, center: Robin Vos (R-Rochester), Assembly speaker, helped negotiate the arena legislation that designates him as a member of the district board.

Middle row, right: Frank Gimbel, a local attorney, was a mayoral appointee to the old district board for 20 years. Barrett didn’t reappoint him to the reformulated board. “I was legislated out of office,” Gimbel told the Milwaukee Business Journal at the time.

Bottom row, left: Scott Fitzgerald (R-Juneau) is Senate majority leader. He negotiated the arena legislation that gives him a seat on the district board.

Bottom row, center: Michael Murphy is Common Council president and chairman of the city Arts Board. He appointed himself to the district board.

Bottom row, right: Bob Bauman is an alderman representing Downtown. Murphy appointed him to the district board.


 

Cultural Landscape: A Timeline

Notable changes in ownership and the milestones that have given these Downtown entertainment venues their contemporary relevance.

1909: Milwaukee Auditorium (now Milwaukee Theatre) opens

1912: Former President Teddy Roosevelt campaigns at the Auditorium less than an hour after an assassination attempt.

1936: City voters agree to hand over city parks to the county in a referendum.

1950: Milwaukee Arena (now Panther Arena) opens.

1961: Common Council votes to buy the Pabst Theater for $250,000, or $2 million in today’s dollars.

1964: In January, Dr. Martin Luther King Jr. speaks in the Auditorium; in September, The Beatles play at the Arena; in November, The Rolling Stones perform at the Auditorium.

1967: The predecessor to Visit Milwaukee is formed as part of the MMAC.

1969: The Performing Arts Center is built with $12.7 million in private money and deeded to the county, to be managed by a nonprofit.

1969: The Chicago Symphony Orchestra performs weekly in the Performing Arts Center until 1986.

1976: The Common Council and County Board transfer the Public Museum from city to county ownership.

1977: Robert Indiana’s “controversial” basketball floor is revealed in the Arena, then the MECCA Arena.

1992: Supervisors vote to transfer Public Museum operations to a nonprofit board.

1992: On its 10th anniversary, the state’s Performing Arts Hall of Fame at the PAC inducts 85-year-old legend Hildegarde.

1994: Wisconsin Center District is born.

1995: Common Council votes to hand over the Arena, the Auditorium and the old convention center to the original Wisconsin Center District.

1996: Private and county dollars fund a $26.5 million renovation that leads to renaming the PAC for major donor the Marcus Corp.

1997: The Marcus Center takes over hosting duties of the International Arts Festival from Milwaukee World Festivals.

1998: The modern convention center, first called the Midwest Express Center, opens.

2002: Aldermen vote to sell the Pabst Theater to Michael Cudahy for $1.

2013: The NBA gives then-Bucks owner Herb Kohl a 2017 deadline for building a new arena, claiming the Bradley Center lacks amenities and big-ticket seating.

2014: 94,000 people attend the Milwaukee Theatre’s 32-show run of The Lion King.

2015: Gov. Walker signs arena legislation that provides $250 million in public financing to build a new arena, and puts Marcus Center ownership into question.


Larry Sandler is a freelance writer whose 34-year journalism career includes five years covering Milwaukee County government. Write to him at letters@milwaukeemag.com.

‘What Will Happen To The Marcus Center?’ appears in the April 2016 issue of Milwaukee Magazine.

Find the April issue on newsstands beginning March 28.

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