$353M Milwaukee streetcar expansion planned; funding 'a challenge'

MILWAUKEE - Milwaukee city leaders say they're facing a financial crisis, but that has not stopped them from pursuing a major expansion of The Hop streetcar.  

FOX6 Investigators obtained more than a thousand emails from the Milwaukee Department of Public Works showing plans for streetcar extensions have continued ever since former Mayor Tom Barrett resigned to take a US ambassadorship in Luxembourg. 

His successor, Cavalier Johnson, said the city is in danger of going bankrupt. Still, he said the city "will expand" the streetcar to Fiserv Forum and beyond.

Nearly five years and one pandemic after it first opened for service, the streetcar system nicknamed "The Hop" is struggling to regain the brief popularity it enjoyed in its early months. In fall 2018, then-Mayor Barrett announced rides would be free for the first year, thanks to a $10 million, 12-year sponsorship deal with Potawatomi Hotel and Casino.

The pandemic virtually wiped out ridership in 2020, and it still has not fully recovered to pre-COVID levels. Still, Mayor Johnson said the system is approaching an important milestone.

"We’re approaching, right now, two million rides on the streetcar since the system opened," Johnson said, as he fielded questions outside the city's new Trade Hotel, which is not on the streetcar's existing line.

Between November 2018 and April 2023, the Hop tallied 1,989,107 riders. That is an average of 1,207 riders per day – 33% lower than streetcar supporters projected before the system opened. Those projections (1,840 daily riders) were based on passengers paying a $1 fare. Plans to begin charging a fare have never been realized. Meanwhile, the Hop remains fare free.

"To think what would happen if we ever tried to actually charge for the Hop. There would probably, literally, be nobody on it," said Mike Nichols, President of the Badger Institute, a champion of limited government and longtime streetcar critic. "It's a slow-motion boondoggle."

But it is not just people like Nichols who are complaining.

"Transportation works because people need to go places," said Ian Lanphier, an urban planner who wants to see the streetcar expand. "It has to go somewhere."

Lennora Jules said she would ride it if it went places she needed to go.

"I don’t necessarily need to go from the Greyhound station or the post office to Milwaukee Public Market," Jules said, as she and her mother Lucile Jules, browsed the highlights of Milwaukee's 2040 Downtown Plan at a recent open house.

"From there to there," Lucile said about the Hop's current 2-mile starter route. "What’s the point?"

That's why the Commissioner of Milwaukee's Department of City Development, Lafayette Crump, wants to triple the size of the current streetcar system.

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"That’s been the vision since we started talking about the streetcar in Milwaukee," said Crump, "And that remains the vision."

In March, Mayor Johnson told FOX6 Investigator Bryan Polcyn he had more important things to think about.

"Where is talk right now of extensions for the streetcar system?" Polcyn asked.

"I haven’t really had the time to focus in on specific streetcar extensions," Johnson replied. "I’m so focused right now on making sure that we can have the resources necessary to fund our police; fund our fire department, make sure that we keep libraries open, to make sure that we continue to collect the trash."

But the department that collects the trash has been actively planning for streetcar extensions ever since Mayor Barrett left office in December 2021. That planning continued as Johnson served as Acting Mayor and, then, after his election in April 2022.

More than a thousand emails obtained by the FOX6 Investigators from Department of Public Works shows streetcar extensions have been a non-stop topic of internal conversation and messaging.

"DPW wants expansion of the streetcar," said Jerrel Kruschke, Commissioner of Public Works. "We want the community to go from their neighborhood house and access downtown and get to jobs."

Shortly after Mayor Barrett resigned in December 2021, Kruschke, then a city engineer, wrote an email to the head of a local engineering firm that had inquired about possible streetcar work. The commissioner wrote that "streetcar discussions have stalled," and he was uncertain "what direction the new mayor" would take. By then, Johnson was serving as Acting Mayor with an election still to come.

The next month, February 2022, Kruschke compiled a list of "stimulus bill candidates" for President Biden's trillion-dollar infrastructure plan. Among the projects they considered seeking stimulus funds to complete were more than $500 million for paving city streets and $110 million for streetlights. In fact, DPW considered more than $1.2 billion in "needs," which also included $353.8 million for streetcar extensions.

The so-called "streetcar needs" included $77.3 million to extend the current loop from the intermodal station to the convention center and Fiserv Forum. It included another $122.4 million to extend that line further north into the Bronzeville neighborhood along MLK Drive, north of downtown. And, finally, it included $154.1 million to extend the line south from Milwaukee Public Market, through the Third Ward and into Walker's Point.

"How can you do $353 million in streetcar expansion with all those other needs?" Polcyn asked.

"So, there’s different pots of money," Kruschke answered, referring to federal sources tied to transit versus those tied to paving and other needs. Still, Kruschke said they have yet to identify specific sources to fund streetcar extensions. 

"It’s a challenge," Kruschke said. "And we don’t have the answer to that yet."

The 2022 infrastructure stimulus funding never came to fruition. But two months after Kruschke created the stimulus needs list, the city applied for another federal grant.

On April 13, 2022, the very day Mayor Johnson was inaugurated, DPW formally applied for $25-million in federal funding through the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grant program. They were asking for the money to extend the streetcar line a quarter-mile to the convention center and to build a new public plaza. They did not get the money.

Since 2009, Milwaukee has requested federal streetcar assistance thirteen times and received it only once – a $14 million grant for the long-delayed Lakefront Line that will eventually connect to the 44-story Couture high rise that is still under construction.

"All of these expansions are dependent on federal money that doesn’t exist," Nichols said.

But when it comes to roadblocks, streetcar enthusiasts may be facing the biggest one yet.

"Milwaukee is at a critical crossroads," said Mayor Johnson.

The city's new downtown plan for 2040 calls on leaders to "work aggressively to secure funding" for streetcar extensions. At the very same time, Republican lawmakers in Madison are trying to block the city from using local tax incentives to pay for such an expansion.

"That does shut it down," said 4th District Milwaukee Alderman Bob Bauman. "Because that’s the way we would fund the local share of a federal grant."

The prohibition on using tax increment financing – or TIF – funds on streetcar design and construction is one small part of a shared revenue proposal that Mayor Johnson negotiated.

"There are disagreements," Johnson said. "That certainly is one."

Bauman believes he knows who put that provision in the proposal.

"A pretty educated guess would be a former alderman who's now a state representative," Bauman said.

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"I certainly am not going to take credit for that being in there," said State Representative Bob Donovan.

Donovan opposed the streetcar's expansion when he ran for mayor in 2022. He lost to Johnson, a streetcar supporter.

Now, Mayor Johnson, a Democrat, is asking Donovan and his Republican colleagues in Madison to help him stave off a budgetary crisis that could result in "severe cuts," according to Johnson."

"They’re coming to the state, hat in hand, saying we can’t pave our streets," Donovan said. "We can’t hire cops and firefighters. We can’t do this, we can’t do that. But yet they, somehow, are committed to expanding the streetcar. Just doesn’t make sense to me."

In spite of the looming fiscal cliff, Mayor Johnson said streetcar extensions are coming.

"Yes, there are headwinds right now," Johnson said.

Some day.

"We’re going to expand it," Johnson said.

"Wonderful idea," said Lucile Jules, who wants lower-income residents north of downtown to have an option to ride the streetcar into the city.

"They said that four years ago. I’m still waiting," Jules said.

Jules said she'll believe it when the tracks are in the ground.

"I would tell Lucile that it is still our plan to do that," Johnson said.

"It would be a great idea," Jules said. "But it’s promises, promises."

The only streetcar extension that's already paid for is the so-called Lakefront Line, which will connect the current loop to the 44-story Couture high rise, which is under construction across from Discovery World. The city expects that line to open to passenger service by Halloween.

DPW Commissioner Kruschke says they did not apply for a federal RAISE grant again this year for other extensions, because that program has shifted toward other types of public transit. Plus, federal grant applications require evidence of a local match. And right now, that is another area of concern.