Milwaukee's Streetcar is in Big Trouble

The Hop, Milwaukee's nearly year-old streetcar system, does not have the ridership to support itself once Potawatomi Hotel & Casino's free ride program ends on Saturday.

According to The Hop's website, there have been a total of 584,039 rides on the system so far this year and 740,531 since it opened to the public last November. Potawatomi's naming rights deal, which allowed for free rides for The Hop's the first year, has helped to defray the system's operational costs. Even with it, however, the City of Milwaukee admits that it is facing a $1 million to $1.5 million budget shortfall in 2020.

Simply put, 740,000 paid rides per year will not come close to covering that. New Orleans, a similarly sized city, charges $1.25 to ride its streetcar. If Milwaukee were to do likewise, its ridership revenue would only total $925,663...and that presumes that 740,531 people will still ride The Hop when they have to pay to do so. Ridership will almost certainly decline once riders have to pay, so it is safe to assume that fares would cover less than half of the upwards of $1.5 million needed to keep the streetcar running.

This is, of course, a moot point since Milwaukee's Department of Public Works has not yet purchased fare collection equipment and Mayor Tom Barrett has stressed that he wants to keep The Hop free for the foreseeable future. Other than praying for a major corporation to come through with a last-minute sponsorship deal, one wonders how Barrett plans to cover his streetcar's looming funding crisis.

Making matters worse is the December 2020 deadline to expand the streetcar line to Milwaukee's lakefront. Failing to do so would mean the city would potentially have to pay back $14.2 million in federal grant money allocated to the project. On top of that, Milwaukee County might have to pay back a $6.7 million grant issued by the Federal Transit Administration if The Couture, a planned 44-story high rise project that includes a streetcar transit center, isn't finished by the end of next year.

The grant, which was issued in 1988 for a county bus facility, may be rescinded since the owners of the property, Barrett Lo Visionary Development LLC tore down the bus facility in 2017 to make way for The Couture. If construction on the long-delayed project doesn't start by next summer, then Milwaukee County could be on the hook for repayment.

Where will both the City of Milwaukee and Milwaukee County get these massive amounts of money? It certainly won't be from rides on The Hop. Let's just say there's a reason that they are so hellbent on getting a sales tax increase passed...

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