Lowering the Hoan Bridge and rebuilding I-794 as a four-lane boulevard could result in development worth as much as $5.7 billion on about 500 acres of ”prime, waterfront real estate,” according to a draft report prepared for the Wisconsin Department of Transportation.

“Not only does a reconfiguration of the roadway and resulting redevelopment make sense from a long-term maintenance perspective, it makes even more sense for Milwaukee and the state from an economic standpoint,” said the report by the HNTB consulting firm. “The increased land values and possible tax base, as well as the public amenities that could be introduced, will certainly accomplish more public objectives than the reconstruction of the Hoan Bridge and I-794 in their existing forms.”

State Transportation Secretary Frank Busalacchi last month said department was looking at the possibility of lowering the bridge and freeway. His statements received decidedly mixed reactions.

I-794 as now configured “has exceeding complex and land-intensive ramps,” the report said. The roadway, which is elevated for about 2.5 miles, also is “oversized for its current and projected traffic capacity because the Interstate system was never completed to the south of this I-794 segment.”

The freeway has had major maintenance issues during the past several years and needs significant work “in the near future,” the report said.  A separate WisDOT issue paper said the bridge is scheduled for major work, including deck replacement, in 2010 to 2013 if funding is available.

“Initial conversations with WisDOT has revealed an opportunity to explore alternative bridge and roadway configurations to create a roadway that meets appropriate capacity needs and opens up land for development and public use,” the HNTB report said. “Alternative roadway scenarios focus on downgrading the roadway from a freeway to an at-grade, four-lane boulevard. The merits of this scenario include far simpler and less costly maintenance and easier, less land-intensive connections to local roads.”

The Hoan Bridge corridor beween downtown Milwaukee and Bay View ”is a very desireable area,” according to the report, which was obtained through an open records request. “The 2.5 miles of property along Lake Michigan is prime real estate and an important public resource.”

Some Port of Milwaukee property is underused, the report said. Significant portions of Jones Island are being used for storage and some areas are vacant, according to the report.

“Conversely, the adjacent Third and Fifth ward neighborhoods, as well as Bay View, have seen tremendous redevelopment activity….In short, the area surrounding the Hoan Bridge could be used for higher and better land uses and provide a link to the public lands to the north and south of the harbor,” the report said.

The report said there are four potential areas of economic benefit “that collectively could pay for transportation infrastructure, parkland, trails, utilities and other public infrastructure improvements.”  The four are sales of excess public property, property taxes associated with private development, job creation and income taxes from permanent workers.

The report included two potential redevelopment schemes, though it also said they were meant to serve as the basis for furhter discussions.

 The more expansive of the two has the potential to creat about 18.4 million gross square feet of new buildings and up to 9,900 housing units with a total estimated value of $5.7 billion, according to the report. Under that scenario, about 204 acres of public land could be sold. The development would create 8,100 jobs and generate $18.2 million annually in state income taxes and $1.7 billion in new property tax revenues over the 27-year life of a TIF District that would be established to help pay for the improvements.

The other concept, which emphasizes public open spaces and neighborhood scale development, could include 7.6 million gross square feet of new buildings, about 5,000 residential units and carry a total value of about $2.2 billion, according to the report. That plan calls for 90 acres of public land to be sold. The development would generate $698 million in new property tax revenue over 27 years and create 1,300 jobs that would generate $3 million annually in state income taxes.

The picture on the left, below, is a conceptual illustration of the smaller development while the picture on the right shows the outlines of the larger plan. Click on the pictures to see larger versions.

“The at-grade roadway reconfiguration and harbor redevelopment will open up a considerable amount of public land for redevelopment,” the report said. “This prime property along Lake Michigan, with its proximity to downtown Milwaukee and available utility service, is unmatched in the State of Wisconsin. Recent public and private land transiactions in the area have determined that this land is valued at approximately $1 million per acre.”

A life-cycle cost analysis showed that WisDOT would spend about $30 million more for the at-grade roadway option by 2014, but would spend $80 million less by 2025 by avoiding the reconstruction costs of the Lake Interchange, the report said.