A new advocacy group, UWM Downtown, has been formed to encourage the University of Wisconsin - Milwaukee to expand its proposed engineering campus in downtown Milwaukee instead of the university's favored suburban location on County grounds in neighboring Wauwatosa. The story was covered in last Wednesday's Milwaukee Journal Sentinel.
Downtown advocates cite student convenience, plenty of vacant commercial space to absorb spin-off companies, the development of a possible engineering cluster with Marquette and MSOE, and the idea that an "urban campus" would be more environmentally sustainable. UWM leadership proposes the Tosa option in large measure because of the potential research synergies that could be achieved with the nearby Medical College, Froedtert Hospital and GE Healthcare.
Both sides agree that university expansion equals economic expansion. However, new research from the W.E. Upjohn Institute for Employment Research is a bit less sanguine. The research does conclude that "if the costs of inducing an expansion in higher education or medical services is sufficiently low, an economic development strategy that targets these industrial sectors may offer net benefits." In other words, keep an eye on costs because the economic benefits of university development are real but the margins are tight.
The cost of developing the Tosa site vs. a site in downtown Milwaukee is a crucial factor that has yet to receive much scrutiny. The UWM Downtown group suggests that the following sites be considered for the new engineering campus:
- The Brewery near Marquette and I-43 – 750,000 SF of potential space.
- MacArthur Square in front of the County Courthouse – 750,000-1,000,000 SF of space could be made available.
- Park East – 14 acres west of the river and 12 acres east of the river to be developed.
- Haymarket area just north of the Park East corridor– 45 acres of vacant land or deteriorated/obsolete buildings for development.
- Schlitz Park on the river just north of downtown – Approximately 200,000 SF of space available.
- Central Business District – 2,200,000 SF of vacant space available.
This is not to say that the development of the Tosa site will be any less costly. UWM Downtown cites potential resident opposition to university expansion, tricky site development issues, infrastructure needs and access issues. On the issue of access, do we need to consider the potential cost of additional transit infrastructure (express buses, bus rapid transit, light rail) to efficiently move students between the east side and Wauwatosa?
The Tosa site does have one distinct advantage: it's already off the tax rolls. To the extent that university expansion downtown would happen on tax-rolled land is an importatnt issue for the City of Milwaukee to consider if it were to welcome any downtown university expansion. As Mayor Barrett himself points out, approximately one-third of the city's tax base is currently tax-exempt. This has, no doubt, limited the city's ability to raise revenue to pay for needed services. Any cost increases then get shifted on to homeowners and other taxable commercial and manufacturing property.
Researchers have not been shy about studying the relationship between cities and universities ("town and gown"). New research from the Lincoln Land Institute reviews the fiscal impact of large nonprofit landowners on the finances of the City of Pittsburgh - a peer city which also has tax exempt property as one-third of its tax base. Researchers note that "the concentration of tax-exempt properties in the urban core has had a measurable impact on the tax base and overall fiscal capacity of the City of Pittsburgh" and that "any conclusions here must focus on alternative sources of funds for city revenue." Other town and gown research from the non-partisan Pennsylvania Economy League (PEL) - a peer group of the Public Policy Forum - also warns of fiscal strain of educational facilities on their host community.
None of this is to say that the idea of an urban research campus isn't an intriguing idea. However, the suggestion here is that the UWM downtown advocates may need to start making their case based on real cost advantages. Additionally, the possible negative revenue effects of a downtown campus on local government finances (service costs exceeding revenue growth) need to be addressed. Annual cash payments to the City of Milwaukee could be an option but would also simultaneously increase the cost of any proposed downtown project.
With political and financial resources aligned for UWM expansion in Tosa, the new UWM Downtown group faces daunting odds in convincing leadership to change course away from Tosa and instead direct expansion efforts into Milwaukee's downtown core. But more important than the project's political odds, would the expansion of a large tax-exempt institution make financial sense for two of our regions largest institutions: UWM and the City of Milwaukee? Research would suggest that while a downtown research campus could spawn regional economic success, it could also create local fiscal distress.