Rebuild, Redesign, Remove:
An Economic Analysis of Changes to I-794

Background

Milwaukee's I-794 Lake Interchange has stood at the center of an increasingly urgent planning debate. The freeway structure, which connects downtown Milwaukee to the regional highway network, is aging and in need of reconstruction. The Wisconsin Department of Transportation has been studying alternatives since mid-2022, with options ranging from replacing the structure in kind to a full freeway removal.

While WisDOT's analysis addressed engineering, environmental, traffic, and safety factors, no study had examined the broader economic consequences of each alternative — the perspective most relevant to businesses, employers, and the commercial real estate community. The Commercial Association of Realtors Wisconsin (CARW), with support from the National Association of Realtors, commissioned DMP Development Analytics to fill that gap.

Milwaukee County's GDP was estimated at $77 billion in 2023, with the seven-county regional economy at $161 billion. The I-794 corridor connects major manufacturing, financial, and healthcare employers to the regional and national transportation network. The economic consequences of getting this decision wrong — in either direction — are substantial and long-lasting.

The Three Alternatives

The study evaluated the economic implications of three categories of alternatives currently under consideration by WisDOT:

Analytical Framework

The study assessed economic impacts across three categories of affected activity: freight and logistics, commuters and workforce, and visitor access and tourism. For each category, two to three scenarios were modeled — representing a 0.5%, 1.0%, and 3.0% decline in the rate of industry growth attributable to changes in travel time, shipping costs, or access conditions resulting from the chosen alternative.

Critically, the framework does not model outright economic decline. Milwaukee's economy is mature and growing, and even the Remove alternative is not expected to cause industries to collapse. Rather, the analysis focuses on the slowing of growth — the compounding cost, over decades, of slightly less favorable access conditions for industries that depend on efficient freight movement or an accessible labor pool.

Industries were identified as freight-intensive based on whether they were exporters — firms producing goods sold outside the local market. For workforce analysis, industries were identified based on their reliance on employees who must physically be present. In both cases, economic impacts were modeled using input-output analysis, capturing direct, indirect, and induced effects across Milwaukee County.

Freight & Logistics

Milwaukee maintains a significant concentration of manufacturing industries — from food processing and specialty chemicals to heavy equipment and precision instruments — that depend on efficient freight movement through the I-794 corridor. Major firms identified as freight-intensive include Molson Coors, Komatsu Mining, Rockwell Automation, Milwaukee Tool, GE Healthcare, and Caterpillar, among others.

Under the Remove alternative, even minor disruptions to shipping efficiency are expected to influence long-term location decisions for freight-intensive firms. The analysis modeled three scenarios for a one-percent slowing of growth in freight-intensive industries:

Commuters & Workforce

Industries that rely on a physically present workforce — including finance, insurance, higher education, healthcare, and manufacturing — depend on I-794 to connect the regional labor pool to downtown employers. Major firms identified as reliant on in-person workforce include Northwestern Mutual, BMO Harris, Froedtert Health, Advocate Aurora Health, GE Healthcare, Rockwell Automation, and the Medical College of Wisconsin.

The workforce analysis found this to be the most significant economic risk category. Even a one-percent slowing of hiring growth — driven by firms making incremental decisions to locate or expand outside downtown to reduce labor access costs — would generate nearly $444 million in annual lost economic activity.

Visitor Access & Tourism

In 2024, visitors to Milwaukee County spent approximately $2.4 billion, generating total economic impact of over $4.3 billion. The analysis focused on the visitor segment most likely to be sensitive to travel time changes: long day trips, which account for approximately 20% of non-resident visits — an estimated 5.8 million annual trips representing nearly $458 million in direct visitor spending.

Unlike freight or workforce impacts, the tourism analysis isolated only the visitor-dependent portion of affected businesses' revenue — restaurants, hospitality, museums, and entertainment venues — rather than their total business. Even so, for businesses in these industries, small declines in visitor traffic can threaten economic viability.

Key Findings

Broader Implications

One of the most significant outcomes of this study is that it reframed the terms of the policy debate. In conversations with stakeholders, business leaders, and transportation professionals throughout the project, the discussion rarely centered on choosing between the three defined alternatives. Instead, it consistently turned to "how can we make it better?"

The study suggests that the binary framing of "free land for development vs. maintain transportation infrastructure" oversimplifies a decision with multi-decade economic consequences. Milwaukee's experience is distinct from the urban freeway removal examples most commonly cited — the freeway did not divide neighborhoods to the degree seen in other cities, anticipated growth largely materialized, and the corridor serves active freight and commuter functions that would not be replicated by a surface street network.

The study was published and presented to policymakers, civic leaders, and the broader Milwaukee business community. It has contributed a previously missing economic perspective to one of Wisconsin's most consequential and long-debated infrastructure decisions.