Bucks: Proposed new arena deal would protect taxpayers

A new plan to build a downtown arena for the Milwaukee Bucks was unveiled Thursday by Wisconsin Gov. Scott Walker, Milwaukee Mayor Tom Barrett and Milwaukee County executive Chris Abele and would include $250 million in public funds.

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That is on a proposed $500 million arena that would be part of a reported $1 billion development in an area downtown that includes the current location of the BMO Harris Bradley Center, the Park East area and neighboring city blocks.

Any cost overruns on the arena project would be picked up by the Bucks, according to a report by WTMJ-TV in Milwaukee.

Walker stressed that the cost of turning down the plan would be steep for the city and the state.

“The price of saying no is at least $419 million,” Walker said. “If the state does nothing and the city of Milwaukee (does nothing), the price of no has a cost. We believe it’s at least $419 million.

“Obviously, it could be more than that … it becomes far greater than that, exceeding nearly half a billion dollars.”

Barrett said the taxpayers of the city, county and state were the primary concern.

“We’ve tried to focus on our taxpayers,” Barrett said. “A lot of give and take, back and forth. All of us have focused on the people who elect us.”

Public money would come from four sources–$55 million plus interest from the state, $55 million plus interest from the county, $47 million from the city in the form of a parking complex and tax increment financing agreements and the $93 million from the Wisconsin Center District to be funded through an extension of the current car rental, hotel and food taxes in Milwaukee County.

The state funds would be paid for by increases in income tax payments by NBA employees, while the county portion would be paid for by collecting county debt that has gone uncollected to this point.

The locally financed portion of the arena project would be 39 percent, based on a cost estimate of $500 million. The state would kick in 11 percent, with the other 50 percent to come from private investors—in this case, the owners of the Bucks.

Without a new arena by October 2017, last year’s sale of the team from Herb Kohl to Wesley Edens and Marc Lasry could be voided and the team turned over the league.

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If that were to happen, the Bucks would likely be on an express train out of Wisconsin and off to another city, most likely Seattle, which lost its NBA franchise to Oklahoma City in 2008 because of arena issues.

No one likes new taxes and the subject of public money going to stadiums and facilities for professional sports franchises has become more contentious over the years, particularly in an age where franchises are being sold for amounts that now run into the billions, not millions.

But as Walker pointed out, public sector investment in most projects of this type is about 65 percent. Rather than a majority, this plan calls for a 50-50 split with the assurance that any budget breaking problems would be remedied by the Bucks.

The Bucks have been part of the fabric of Milwaukee for almost 50 years, since their inaugural season in 1968-69. This plan would represent a low-risk solution to the problem of keeping the team in the city and the state without hammering the taxpayers of Wisconsin, Milwaukee or Milwaukee County any more.

Given that public money usually pays for more than half of these projects around the nation, the chance to meet the Bucks halfway is one that would be good business for all concerned.

Next: Evaluating Bucks' Options At No. 17

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