Study: Removing I-794 would bring $475 million in property taxes, create 3,000 new housing units

 

MILWAUKEE (CBS 58) -- A longtime urban planner for Milwaukee and its surrounding communities estimates tearing down the stretch of I-794 running through downtown would generate $475 million in property tax revenue over a 30-year period.

Larry Witzling, who teaches urban planning at UW-Milwaukee and has been involved in the design of numerous past Milwaukee County projects, including the 2003 Park East freeway removal, conducted a study for the group, 'Rethink 794,' which supports removing the Lake Interchange section of the freeway, which runs between 6th Street and the lakefront.

Witzling's study estimated what would happen over a 30-year span once the section of freeway came down. In that scenario, which is one of three currently being considered by the Wisconsin Department of Transportation (DOT), Clybourn Street would be widened to a four-lane boulevard. Several north-south streets would be extended to connect with St. Paul Avenue.

Completely removing the Lake Interchange part of I-794 would open up 18 acres of new downtown real estate.

Witzling found full freeway removal would create enough land to hold 3,000 new housing units. Residential, commercial and retail development would generate $475 million in property tax revenue while also providing the city another $60 million from sales taxes.

"For the 50 years that I've worked here, I have never seen a bigger opportunity to change the basic nature of the city," Witzling said.

The DOT is considering two other options besides freeway removal. One would be a rebuild of I-794 as it currently stands. That rebuild would leave 2.7 acres of newly developable land on the freeway's footprint.

The Wisconsin DOT is also considering a compromise that would rebuild I-794 on a smaller footprint, opening up some land for development near Lake Michigan.

The other alternative is a compromise of sorts. The DOT has drafted six different concepts for this option. The design that creates the most new land would leave 6.3 acres of new real estate. Full freeway removal would open up 18.3 acres.

"This freeway doesn't bring any tax base," Witzling said. "It's convenient for some drivers, but replacing it doesn't make it that much less convenient."

Tracy Johnson, president of the Commercial Association of Realtors - Wisconsin, said she was concerned a perceived loss of convenience would deter some suburban residents from working downtown or visiting as often. 

Beyond that, Johnson said full removal raises a number of logistical questions.

"What is the cost of this? How does this get paid for?" she said. "How do you get rid of the [freeway] pilings? How do you ready the site for commercial development?"

Witzling noted there were similar concerns about the Park East freeway spur's removal. Much of that land sat vacant until the Milwaukee Bucks bought the land from Milwaukee County for $1 in 2015. Development of that land is still happening as part of the Deer District.

Johnson said she believed this was a different situation since the Park East spur ended on the east side while I-794 continues over the Hoan Bridge and into Bay View. Beyond that, she questioned whether it would and new land development on the freeway footprint would be subsidized at the expense of investment in other neighborhoods.

"Is it really fair that those plots will get the incentives?" she said. "When maybe a site on the north side of Milwaukee or on the south side of Milwaukee that is just as vacant wouldn't get that incentive or wouldn't get that attention."

Witzling said maximizing the most valuable real estate in the city, connecting downtown and the Third Ward, would be a rising tide that lifted all boats. He maintained nearly half a billion dollars in new property tax dollars would fund projects in underserved parts of the city.

"You get money that can be used to generate revenue," he said. "That can also be redistributed to neighborhoods near the downtown."

Once the DOT recommends a design and one is selected, there will still need to be environmental reviews that would accompany any changes to the freeway's footprint. According to the DOT's timeline, construction is not set to begin until 2027.