Milwaukee Hop, Is It A Flop? [OPINION]

“We have more pressing needs in Milwaukee than to divert money to a streetcar that just goes around in a circle,” Milwaukee Alderman Tony Zielinski told CBS 58 when asked for comment about Mayor Tom Barrett’s proposed $46 million expansion to Milwaukee’s streetcar, the Hop’s primary route. Speaking of circles, that’s exactly the kind of progress that has been made on expanding The Hop – north, south, east, or west. The Hop “successfully” launched its first route November 2nd, 2018. Since then, development has full-stopped in the face of third-party delays, votes, and other complications. So, is there something better we could be doing with our time and money?

Yes, and no. Milwaukee needs to expand and grow, but so far it has not taken adequate steps towards fixing deep-rooted financial and social issues. Instead, Milwaukee focuses on new developments that only further financial and social strife and can be detrimental to real progress. We need our money to be better allocated to benefit all Milwaukee residents.

Let’s talk about “successfully,” in terms of the first several months of Hop operations. Ridership numbers have outpaced the 2011 planner’s estimate of 665,000 riders. By August of 2019, 80,000 riders were counted using The Hop’s ride-counting technology. Shrewd readers may ask: why not say 80,000 fares were counted? This is because The Hop is free for all riders for an entire year. There is no fee, no tickets, they haven’t even invested in ticket readers for the cars yet. Originally, the 10-million 12 year sponsorship by Potowatomi Casino that allowed all riders to ride for free was set to expire in November of this year. According to Alderman Cavalier Johnson getting the fare boxes “would take up to eight months to purchase and install.” None have been purchased, and any decision about it is being made in the 2020 council meeting. Unsurprisingly, DPW streetcar system manager Dave Windsor is on record saying that if the Hop started charging fares, ridership would dwindle. Windsor goes on to comment that he’d rather see the $400,000 set aside for the fare equipment go to other uses. Hopefully, that $400,000 and then some is going into the roughly $1.5 million or more funding gap the Hop is currently projected to have going into 2020.

So How Are We Paying?

Nothing in life is really free, though, even if the rides are free, and Milwaukee taxpayers aren’t currently being burdened with the cost of streetcar development, costs to Milwaukee residents will still arise. Over half (about 53%) of the initial funding came from a federal grant. The rest came from TIF districts. For those unfamiliar, they are basically a way for the state government to borrow money against the proposed property tax revenue in a certain district. TIF is a complicated financial concept, but to make a long story short, the taxpayers still end up paying more under this structure than they would with other forms of government borrowing and funding. Even increasing taxes to the taxpayer could potentially lead to fewer costs long term. Speaking of property values, and property tax, out of the 15 top real estate projects in the TIF district of the Hop only one mentioned that their decision to invest money and resources into real estate in the area was influenced by the Hop. Mayor Barrett continues to insinuate that the growth of development in the area is due to the presence of the Hop and that the people are seeing real returns from the streetcar through these developments. In reality, Milwaukee has been poised for growth since before the Hop was no more than plans on a page. From 2015 to 2018, there was an $862 million increase in assessed property value in the area in question that could have gone on to benefit other parts of Milwaukee if it wasn’t locked in a TIF district now.

Much more immediately costing Milwaukee residents than TIF drawbacks and property taxes is this statement by Windsor who said that in order to make up the annual operating deficit, he wasn’t above withdrawing that money from the Parking Fund. While the city plans for around $17 million in parking revenue annually, and $2-ish million doesn’t seem like a lot in comparison, that is money the taxpayers are being forced to lose that would otherwise go to farther reaching benefits like road repair, educational grants, and other wide-reaching benefits. Thinning the city’s coffers to pay for the Hop seems like an ill-sighted decision that one would hope Mayor Barrett never imagined would happen, especially considering how much he stressed the people would not be paying for the streetcar.

On Pause For Politics

Obviously, there would be growing pains as Milwaukee tries to fit into its bigger shoes. This isn’t the same city it was five years ago, or 60 years ago when the last streetcars ran their now buried tracks. Despite the apparent progress towards being progressive, council members cannot decide on a course of action for the project. The $46 million expansion mentioned earlier, to expand the Hop to the convention center and the proposed Vel R. Philips Plaza has been on the table since May 2019. Part of this proposal was a way to sweeten the deal for the DNC committee to host the DNC in Milwaukee, a proposal that has turned into a promise by the DNC board. The people of Milwaukee have gotten no similar promises from its officials. There has been so much hemming and hawing over the expansion that the potentially most useful and revenue generating expansion will not be done or potentially even started by the time the DNC occurs.

Staunch anti-streetcar voices like Alderman Zielinski often point to the already thin Milwaukee budget, and how if anything goes wrong with streetcar development and funding, that budget is going to be stressed. Others, like council president Ashanti Hamilton, aren’t anti-streetcar but are holding their vote hostage to focus on other worthy causes like “a  permanent workforce development program, an established anti-displacement fund, and a neighborhood reinvestment program.” All of these are direct responses to potential issues the streetcar may also bring as it grows.

Milwaukee deserves better. We deserve a better streetcar, and we deserve a better city. These two things should go hand in hand but as the Hop is currently being managed, we aren’t getting either anytime soon.