A consortium of investors asked the City of Milwaukee for $41 million in tax breaks for an "entertainment district" to be built into the historic (and then-vacant) Pabst Brewery. It was called "PabstCity". The plan was to include a House of Blues, Sega Game Works, a 10 screen movie theater, and the construction of a Best Buy big box store.
The city declined. If you read the internet commentary at the time, you'd think that this area of Milwaukee was doomed to economic decline. But, that's not what happened.
The House of Blues never opened. Neither did Sega Game Works, which has been through bankruptcy twice and shuttered dozens of locations since. Big box retailers like Best Buy have gone out of fashion. Meanwhile, similarly designed entertainment districts have gone belly-up or failed to live up to promises.
"Entertainment Districts" are easy to spot.
These places usually have a well-marketed name followed by the words: eat, drink, relax, dine, play, or some similar variation. A hotel is often used as an anchor, a movie theater is thrown into the mix along with some up-market chain restaurants. The area’s light posts are covered in banners reminding you of where you are.
Another easy way to identify an entertainment district is by tax subsidy. These projects usually have some form of subsidy attached, whether that is through direct spending on infrastructure improvements, local government bonding, or tax increment financing. You'll see them frequently tied-in with sports complexes (which is another can of worms, best summarized by John Oliver).
It's a land use dedicated to entertaining. The heart of these project concentrates all efforts on one thing: entertainment. Entertainment is code-speak for food and drink. And, if it isn’t a weekend or an event night, these places are eerily silent.
Entertainment districts are the new downtown shopping mall. They are usually controlled by one entity, have a singular function, and lack the urban diversity that thriving places require. For the downtown urban environment as a whole, especially one looking to attract visitors, there is little or no benefit from ubiquitous chains.
We saw this development happen in downtown Minneapolis. We called it "Block E". It opened to much political fanfare in 2001. Less than 6 years later, it was nearly empty. It is considered a joke - a painfully expensive joke - and is universally ridiculed. This is the predictable outcome of these types of large-scale, top-down entertainment districts projects.
10 years ago, Milwaukee said "no" to an entertainment district. The area took a different path; the way of localized incremental development: one building at a time. Today, the historic Pabst Brewery area is the coolest new neighborhood. By teaming up with multiple local institutions, businesses and government agencies, the area transformed into something more than a place to drink beer.
The new Pabst Brewery neighborhood doesn't require massive government subsidies and its success doesn't depend on the business cycle of international chain restaurants (note: although it has received historic credits, etc.). Instead, it includes private and government offices, a local hotel, an up-start brewery, small-scale event center, and actual people who live there. You can read about it here.
We are told that if we do not subsidize certain areas of town that there will be no future; some predictions even sound apocalyptic. Turns out, it's not true whatsoever. Why is this important? Well, Milwaukee needs to learn from its successes, as unintentional as they may have been.
There currently is a proposal to build Entertainment District 2.0 in another area of town. The project also includes a heavily subsidized basketball arena (which is ironically being championed by Wisconsin's fiscally conservative Governor and 2016 Presidential hopeful Scott Walker). It's also being supported by the city's Mayor, Tom Barrett, who was a PabstCity cheerleader and predicted Milwaukee's downfall after the last entertainment district was rejected.
Not surprisingly, many politicians are basking in the Pabst Brewery's success despite their efforts 10 years ago to turn it into something that would have failed. Now, here's what Milwaukee will be on the hook for with it's new sports entertainment district (from Urban Milwaukee):
- $35 million to build a new, 1,243-space parking garage,
- $12 million to build a “public plaza” [emphasis on quotations],
- $8 million to build a canopied courtyard within a U-shaped entertainment mall,
- $4.1 to $4.6 million for additional street work,
- $17 million in interest on TIF-related borrowing,
- $1.2 to $1.5 million from city to cover demolition of parking garage with 980 spaces,
- $1 million (appraised value) for the one-acre parcel to be forfeited
If you're doing that math, it's more than $78 million. The City of Milwaukee could do this OR they could literally do nothing and be better off. Let the area develop naturally through the natural process and have another great neighborhood come to life similar to the Pabst Brewery area.
Dear Milwaukee, learn from the mistakes you didn't make.