Public Policy Forum Blog

Pulling back the curtain

When the Forum was approached by the Spirit of Milwaukee late last year to consider researching the needs of the region’s arts and cultural assets, our initial reaction was reluctance. We knew we could provide an important perspective given our years of research on Milwaukee County’s finances and the county-owned cultural and recreational facilities. But we also knew this issue soon would become linked to the debate about a new basketball arena, and that any entity that stepped near that fray would be in danger of being linked to one side or the other.

We eventually concluded, however, that this contentious debate – which was going to occur with or without our research – needed to be grounded in facts, and that we were uniquely qualified to objectively assess the financial and physical condition of major arts, cultural, and entertainment assets.

Furthermore, we felt we could add critical insight on several important nuances that had been largely ignored in previous discussions. For example:

  • If additional public funding was deemed desirable, should it be used to address operating or capital needs?
  • How might the list of institutions that require and would be eligible for such funding be defined, and how should the dollars be allocated among those institutions?
  • What dedicated public funding options exist, and what are the pros and cons associated with each?

This morning, we release the first of two comprehensive analyses that will address these and related questions. In Pulling Back the Curtain, we focus on the financial and physical needs of public and privately-owned arts, cultural, recreational, and entertainment institutions in Milwaukee County. In our second report – to be released early in 2014 – we will explore how other metropolitan areas have addressed the need for dedicated funding for their quality-of-life assets, and then model some possible approaches for Metropolitan Milwaukee.

The following are key findings from our initial report:

  • The five-year capital needs of the Milwaukee County-owned arts and cultural facilities and parks are immense. From 2008 through 2012, $103 million was spent to address capital needs at the county-owned facilities. For the next five years, capital needs totaling $246 million have been identified.
  • Operating needs for the major county-owned arts and cultural facilities and parks generally are less acute than capital needs. Recent funding agreements for the Milwaukee Public Museum and the War Memorial Center/Milwaukee Art Museum minimize the need for additional county funds to support those entities. The parks and zoo have greater operating needs, but even for those entities, capital needs appear to be more urgent.  
  • Five of the six privately-owned arts and cultural organizations we analyzed are in sound financial operating condition, though each would benefit from enhanced reserves to help them withstand cyclical swings in earned revenue and pay for preventive maintenance and minor facility needs. Consequently, a short-term and time-limited source of support for privately-owned organizations might be most appropriate, as opposed to ongoing public funding.
  • The privately-owned organizations generally have been successful in securing partnerships and philanthropic support to advance major capital projects, but the private fundraising acumen of those organizations will be tested in the future. Three of the six are contemplating ambitious new capital improvement projects which may compete against one another, and against private fundraising efforts for capital initiatives at the county-owned facilities.
  • While most of the assets have some form of pressing capital need, there is wide divergence in terms of their need for basic repairs and replacement versus new improvements. Of the $310 million in capital needs identified for the public and private facilities analyzed in the report, $113 million would be spent on basic repair and replacement, and $197 million on new facilities or major improvements.
  • The BMO Harris Bradley Center and Wisconsin Center District have experienced severe operating budget challenges during the past five years, and the long-term stability of each may be tied to substantial new capital investment. The report takes no position on whether a new basketball arena should be pursued, but it does indicate that should the Bucks leave, the center itself would face an uncertain financial future.

While the report leaves little doubt that the facility needs facing Milwaukee County’s public and private arts, cultural, recreational, and entertainment facilities are substantial, it is beyond its scope to determine whether they rise above the needs facing other important community assets – such as schools, transportation systems, and law enforcement agencies.

Our findings do suggest, however, that if Milwaukee is interested in building upon its national reputation as a city that mixes small-town virtues with big-city amenities, then additional public investment in its existing array of arts, cultural, and entertainment venues likely will be required.

The full report and executive summary can be accessed here, while the media release can be accessed here.

Author: 
Rob Henken