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Marcus Pitches Big Downtown Hilton Expansion

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A site near downtown Milwaukee's convention center would see a 276-room expansion of the neighboring Hilton hotel and development of a 200-unit apartment high-rise under a new $125 million proposal.

Marcus Corp.'s project, known as eMbarKE, would help the Wisconsin Center convention facility attract more business, said Greg Marcus, chief executive officer.

However, the company's investment, at a city-owned development site south of W. Wisconsin Ave., between N. 4th and N. 5th streets, would require the convention center to commit to its own expansion, Marcus said. A competing development proposal for that city-owned property includes a similar condition.

An expanded Wisconsin Center would benefit Marcus Corp.'s hotels, as well as other downtown hotels, restaurants and stores that draw spending from convention-goers, Marcus said.

"We need a healthy travel and lodging market," he said.

The eMbarKE (its ungrammatical construct is a play on Milwaukee's MKE airport code) project would help draw more conventions by providing additional meeting room space and by creating a hotel with more than 1,000 rooms that is directly tied to the Wisconsin Center, said Joseph Khairallah, president of Marcus Hotels & Resorts.

"We are giving the meeting planners what they need," Khairallah said.

The Hilton, connected by a skywalk across Wisconsin Ave. to the Wisconsin Center, is already downtown's largest hotel, with 750 rooms.

The Hilton has 34,000 square feet of meeting room space. The eMbarKE would add 61,000 square feet of meeting and exhibit space, with about 20,000 square feet at the new hotel building and the rest within a two-story addition to the current Hilton's west side.

The 11-story Hilton expansion would face both N. 5th St. and W. Wisconsin Ave. It would connect to the current Hilton with a skywalk across N. 5th St.

The 16-story apartment high-rise would face N. 4th St. The company is seeking a partner to develop that building, Marcus said.

An elevated two-level connector building, topped by an outdoor public plaza, would run between the hotel expansion and the apartment tower. The connector would include Hilton meeting room space, and eMbarKE's street level would feature restaurants and retail space.

A downtown streetcar station would operate on the ground level beneath the connector.

Khairallah said the streetcar, restaurants, retail space and apartment tower residents would all make the area active, which would help draw more conventions.

City officials plan to extend the streetcar with a route that would run through the site between the Milwaukee Intermodal Station, 433 W. St. Paul Ave., and the future Milwaukee Bucks arena, at N. 4th St. and W. Highland Ave.

That streetcar expansion plans ties in with the city's request for development proposals for its Wisconsin Ave. site, now used as a parking lot. The Marcus plan is one of only two proposals that have been submitted, according to the Department of City Development.

Jackson Street Holdings LLC, which owns the Marriott and two other downtown hotels, submitted a proposal it calls Nexus.

Nexus would feature three hotels totaling 506 rooms. One hotel would be in a 15-story tower near Wisconsin Ave. and 5th St., with two others in a 20-story tower at Wisconsin Ave. and 4th St.

A four-story building would connect the two hotel towers and would feature meeting and exhibit space.

Nexus also would include street-level restaurants, cafes and bars. A new skywalk across Wisconsin Ave., west of 4th St., would connect the development to the Wisconsin Center.

Jackson Street's representatives talked to the news media this fall after submitting the Nexus proposal. Marcus executives had declined to comment about their plans, with city officials continuing to keep both proposals confidential during their review process.

That review is ongoing. A sale of the development site would need Common Council approval, and Mayor Tom Barrett's administration hasn't yet made a recommendation.

Marcus executives are now unveiling eMbarKE's details to the Journal Sentinel in part because Wisconsin Center officials are getting involved in the review process.

The Wisconsin Center District, the state-created agency that operates the convention center, is conducting a strategic study of its facilities, which include the University of Wisconsin-Milwaukee Panther Arena and Milwaukee Theatre. The study should be completed in early 2017.

Marcus said Marcus Corp. would privately finance the Hilton expansion, while the company's future partner would finance the apartment high-rise.

With the Nexus proposal, Jackson Street Holdings would finance the privately owned portions of the three hotels.

But the Nexus meeting rooms and exhibit space, totaling 103,000 square feet, would be financed, owned and operated by the Wisconsin Center District. That would mark a big shift in the district's long-term expansion plans.

The Wisconsin Center opened in two phases, in 1998 and 2000. Since then, a third phase has been planned for its parking lot, which runs north of the facility to W. Kilbourn Ave.

A 2014 report commissioned by the Wisconsin Center District said that expansion would cost roughly $200 million and would help the Wisconsin Center draw more conventions, building a demand for more hotel rooms and other services. But it generated no formal action, mainly because the proposal lacked a financing plan.

The Wisconsin Center District is largely financed through a 2.5% tax on hotel rooms, a 3% tax on car rentals, and a 0.5% tax on restaurant food and beverage sales within Milwaukee County. The district also receives a 7% hotel room tax collected by the city and earns revenue by renting out its facilities, collecting a commission on food and beverage concessions and providing other services.

The district board can vote to raise the county room tax to 3%. But it can't raise the other county tax rates without approval from Gov. Scott Walker and the Republican-led state Senate and Assembly.

Meanwhile, much of the district's current tax revenue is tied to helping finance the future Bucks arena.

Milwaukee Journal Sentinal

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