Real estate study finds I-794 removal would slow region’s economic growth

Listen to this article

Conversation over removal of Interstate 794 started two years ago in Milwaukee when the Wisconsin Department of Transportation offered it as an option when it revisited the more than 50-year-old infrastructure. The agency in November held public involvement meetings and narrowed options to keep the freeway as-is, improve the design or remove it completely.

Proponents of freeway removal said using the 1.5-mile stretch of freeway would offer more development opportunities and connectivity between the downtown and Third Ward neighborhoods. However, a real estate association study shared the fate of the freeway could have greater implications for the Milwaukee area with the cost of removal in the hundreds of millions of dollars in economic growth.

The Commercial Association of REALTORS–Wisconsin last week shared an independent study that found removing I-794 could reduce regional economic growth by more than $560 million each year after construction is complete. According to WisDOT, construction will start in 2030 when funding and approvals are secured.

The study, conducted by Madison-based DMP Development Analytics, suggested that redesign alternatives could enhance safety, create new development opportunities and preserve regional connectivity, CARW officials said. The study pointed to freight and logistics, workforce commuting and the same-day tourism travel as three key areas that would be impacted by removal.

“We looked at this as a regional asset and so much of the conversation is focused solely on the footprint, on that 1.5-mile stretch,” said Tracy Johnson, CEO and president of CARW. “When this was built in the 1960s, there was a thought process of how it’s going to connect the region.”

WisDOT is considering four core design alternatives for I-794, the above-grade freeway that connects the Hoan Bridge to the Marquette Interchange in downtown Milwaukee. The project isn’t expected to impact the span of the Hoan Bridge or the core design of the Marquette Interchange.

The alternatives are to replace the structure in kind, replace the existing freeway with at-grade streets, reconstruct the freeway with some design features or leave the freeway as-is, according to a WisDOT presentation. The purpose of the project is to address deteriorating infrastructure and enhance connectivity, officials added.

There will be potential for surplus property depending on which route WisDOT takes, whether the agency chooses an in-kind replacement, freeway improvement with right- or left-handed ramps or total removal. Total removal would free up much of the space between Marquette Interchange and Hoan Bridge and would call for new street connections downtown.

Around 74,000 cars use I-794 each day and two-thirds of the traffic would be diverted to other city roads and interstates if the freeway is removed, according to WisDOT. Removing the freeway would also increase freeway travel times, while improving the existing structure has a slight reduction in travel time, officials added.

Longer commute and freight times mean slower growth for the region, study finds

The study linked longer commuting times with slow economic growth for the region. It also suggested that redesign alternatives could enhance safety, create new development opportunities and preserve regional connectivity, CARW officials said.

“While there may be some benefits to removing it entirely and converting it to streets, this study finds that those benefits are far outweighed by the potential costs it would have for overall economic activity,” researchers wrote in the study summary. “Although rebuilding the interstate as it is currently designed would not necessarily result in slowing future economic growth from that currently anticipated, there seems to be little reason not to consider making improvements to the current design.”

A 1% decline in shipping of freight to, from and through the area would slow economic growth by $118 million each year, according to the study summary. If firms that rely on an in-person workforce slow hiring by 1%, it would slow economic growth by nearly $444 million each year. Additionally, a reduction in visitors making day trips to the area would slow growth by $2.5 million annually, the report added.

“If you don’t have an I-794 there’s an impact on Port Milwaukee, which has seen major investment over the last couple of years,” Johnson said. “You see so many companies that have expanded or are thinking about expansion who use that port for so much commerce. Then you take all that workforce that relies on an access point from the west, south and north.”

The study is meant to focus on the freeway as a regional connector instead of just replacement of the footprint, she added.

“When you think about it as a regional connector, I think it’s a lot different,” Johnson said. “Some of the communities such as Boston or Rochester, New York, which are evaluating this or have undergone reconstruction or removal, that freeway was maybe dividing a community in a different way than I-794. This is not cutting through a residential community, this is basically connecting portions of our region for commerce.”

About 20 years ago, the city razed the former Park East freeway, which stretched across what is now known as the Deer District and part of the Lower East Side. CARW advocated for the Park East removal for development opportunity and because the freeway didn’t serve a regional purpose like I-794, Johnson noted.

CARW isn’t officially advocating for any specific alternatives, Johnson said.

The reason for the study was, “Two years ago, when the conversation about freeway removal began, of course there was a lot of interest from the commercial real estate community to say, ‘Think about the land you’re going to be able to develop.’” She added. “The more we talked to people, the more they started to say, ‘OK wait a minute, what could be the impact on existing real estate. What’s the real estate opportunity right now?’”

In 2023, WisDOT released plans to improve the freeway between the Milwaukee River and lakefront with removal as an option. Rethink 794, a group advocating for removal, said converting the freeway to boulevards could generate $30 million in tax revenue for the city and open new construction land worth up to $1.5 billion.

Compiling data on freight, commuter and tourism impacts at their most conservative numbers still resulted in totals the hundreds of millions, the study showed.

“We’re talking about a slowdown in economic growth. Our region is $160 billion, and Milwaukee County is around $71 billion. Even $560 million, that’s a big number, and that’s annually after construction,” Johnson said.

The study used quotes from local industry specialists, from restaurants to manufacturing, on freight and commuter impacts.

“There are 74,000 cars per day that use that connection point, the 1.5-mile corridor to get to and from,” Johnson said. “Common sense would suggest that’s going to be encumbered if you remove that opportunity. You take it down to grid level, now you have 74,000 cars on the grid. It’s not just about access for people moving through downtown, but what it does for safety and investment opportunity.”

“What we wanted to do, again, was put data to that. … Time is money and that’s what some of it comes down to when looking at the economic analysis,” she added. “Businesses want certainty and having amorphous discussions that are going to expand travel times from 13 minutes to 38 minutes in certain commutes, that’s a big deal.”

CARW suggests exploring existing real estate opportunities

Milwaukee’s office market saw a 19.9% vacancy rate for multi- and single-tenant properties and a 24.1% vacancy rate for multi-tenant properties, a CARW real estate report for the third quarter of 2025 showed.

The analysis of Interstate 794’s fate has yet to have a real estate component, Johnson said. Some parts of downtown are underdeveloped and leave more opportunity for density, she added.

“Right now, we have an opportunity on the table to build density, we have a lot of underused parking lots,” Johnson said. “You have a lot of existing real estate that is underdeveloped and you have a lot of office vacancy right now. If we’re going to have a conversation about building density and want to focus on the real estate component, that is a whole conversation that could benefit the construction industry and really needs to be had.”

In 2027, WisDOT will advance its study to the environmental review stage and likely select its preferred alternative after completing an environmental impact statement, officials said.

The next public meeting will be held in spring 2026 and will cover resource impacts, more details on traffic and safety, a land use market analysis and effects on freight and costs, officials added.

WisDOT will also hold a public hearing in late 2026 and present its preferred alternative and environmental impact statement.