Wisconsin governor to propose “jock tax” for Bucks arena, but do so when he hopes no one is listening

Rich Kirchen of the Milwaukee Business Journal, one of the two reliable press mouthpieces for the Bucks arena campaign, reports that according to “sources close to the situation,” Wisconsin Gov. Scott Walker will announce plans for a “jock tax” to provide state subsidies for an arena project. He’ll reportedly do so in the next week, because next Tuesday he presents his state budget, and he wouldn’t want to create a “distraction” by, um, talking about things he wants to spend state money on?

Anyway, remember that a “jock tax” isn’t actually a tax: It’d just be the state taking all the income taxes it collects from Bucks players (and executives, and hot dog sales people) and writing a check to the Bucks owners in that amount every year. The theory, I suppose, is that without the Bucks, the state wouldn’t collect any of that money — except that 1) if people weren’t buying hot dogs at Bucks games they’d still have to eat somewhere, and employees there would be paying taxes, and 2) really anyone working or running a business in the state of Wisconsin could make a similar claim, and they all did so at once the state wouldn’t have any money to run a government at all. Though Walker might not actually mind that.

Meanwhile, the other reliable pro-Bucks local writer, Don Walker of the Milwaukee Journal Sentinel, wrote an article yesterday about how Detroit is hoping to pin its redevelopment hopes on a new arena (hint, hint). Sources cited in Walker’s article: the developer behind Detroit’s project, a pro-development (if “cautiously” so) Detroit councilmember and community activist, a real estate consultant, and the Detroit mayor’s office. It’s not quite Walker’s most impressive work, but in terms of one-sided reporting, it still gets the job done.

 

 

Property-tax break could push Bucks arena subsidy to $330m

Bruce Murphy of Urban Milwaukee has estimated how much a full property-tax exemption for a new Bucks arena would be worth, and has come up with $325 million over 25 years. That’s a present value of about $180 million, which would be even more than the $150 million in direct cash subsidies that is being bandied about.

Given that not only the Brewers‘ Miller Park but the Bucks’ existing Bradley Center — notwithstanding its “100% privately funded” rep — got similar tax breaks, you have to expect that a new arena would, too, which means the Bucks could be asking for $330 million total in public subsidies for their project. I suppose if the Bradley Center is torn down and whatever is built there is returned to the tax rolls that would lessen the public cost a bit. But still: When calculating public sports venue costs, please remember to include all the costs. Got that, Don and Rich?

Two Milwaukee polls show pretty much squat, can’t we have some real Bucks arena reporting already?

It’s mediocre coverage of crappy poll day in Milwaukee today! First up, the Wisconsin Policy Research Institute, the right-wing think tank run by a former newspaper columnist and which includes rabidly pro-Bucks arena subsidy chamber of commerce president Tim Sheehy on its board, asked a whole 600 people scattered throughout the state of Wisconsin if they approved or disapproved of “public support” for the state’s sports teams. (Margin of error: ±5%.) Verdict: A narrow majority opposed giving public subsidies to sports teams in general (51.3% to 39.5%) and a narrow plurality opposed public aid to the Bucks in particular (39.3% to 36.1%); the Packers fared better, earning 43.1% to 39.7% support, though the Packers aren’t the ones actually asking for money. And only the overall opposition to subsidies clears that margin of error, anyway.

The Milwaukee Journal Sentinel’s Don Walker’s verdict on this: “sharply divided opinion,” which I guess refers to the fact that most people were “strongly” opposed to or supportive of subsidies? Except for those who had no opinion, that is, though maybe they strongly had no opinion. Verdict: Not untrue, though “Why are we even covering this lousy poll when there have been so many better-worded ones?” would have been more accurate coverage.

Next up: The Milwaukee Preservation Alliance conducted an unscientific email and Facebook poll of members and, it sounds like, friends of members, and asked whether people wanted more public dialogue on a Bucks arena. Amazingly, 77% said yes! Even more amazingly, 23% of respondents actually went through the trouble of clicking on an email or Facebook page to say “No, we don’t want to hear anything more about a new Bucks arena,” which is either a sign that some people are so “strongly” opposed or in favor that they feel the matter is closed, a sign that people’s clicking skills are terrible.

Don Walker wrote about this, too, noting that it was an informal, unscientific survey, which means the numbers are completely meaningless even if the question itself weren’t more or less meaningless. Verdict: What, the first lousy poll didn’t get you enough pageviews for the day?

I pick on Walker a lot, deservedly so, for writing articles that parrot the press statements of Bucks execs and their political allies without even bothering once to call up someone who might disagree, or citing any actual facts to leaven the steady stream of pro-arena-subsidy opinion. But really, the worst of it isn’t the individual articles, but that they’re never leavened with any dissenting views or actual investigative reporting: Instead, on days when nobody from the team has anything to put in the paper, we get rehashes of polls that even the people who conducted them admit are meaningless.

So, Don. (May I call you Don?) You’ve retweeted me, so maybe there’s a chance you’re actually reading this. Since you have all this time on your hands and space to fill, how about devoting some of it to the actual real news that needs to be covered regarding the Bucks arena plans, and not just all this he-said-she-said and rehashing unenlightening poll results? Here, I’ll start you off with a list of story ideas:

  • How much public money are the Bucks owners likely to be asking for, including any tax breaks, free land rights, etc.? And where would the Bucks owners get their supposed $300 million in private funds, what revenues would they be giving up in return, and why can’t some of that go to help repay the public’s share?
  • What would replacing the Bradley Center actually mean to the Bucks owners financially? If it’s enough to pay off the construction costs, why can’t they fund it themselves out of new revenues? If it’s not enough, would it be more cost-effective for the team to make do with their old building, possibly renovated?
  • How serious is the threat that the NBA will sell the team to new owners if a new arena isn’t approved? What did Marc Lasry and Wesley Edens agree to in their purchase of the franchise, and did they authorize the league to play bad cop for their arena demands?
  • What would the fiscal and economic impact be for the state of Wisconsin to kick back income taxes on team employees to the Bucks owners, as has been proposed? How have other states fared that have passed similar measures?

I could probably think of a few more (and I’m sure my commenters will, so check down there as well), but that’s plenty for now. Even tackling one of these topics every week or two would be a huge benefit to the public debates around the arena plan. And I hear that unscientific surveys show that people want more informed public debate, so get cracking!

Bucks exec gives speech on arena subsidies, Milwaukee paper straight-up summarizes it, calls this journalism

Of all the advantages that powerful people have — the ability to get meetings with any elected officials they want, the money to spend $240 for eight pieces of sushi, that whole droit du seigneur thing — the most valuable might be the power to get their opinions printed in the paper at the drop of a hat by amenable reporters. And since there’s no one more amenable than the Milwaukee Journal Sentinel’s Don Walker, we have today’s masterpiece, an alleged news story that quotes or paraphrases Milwaukee Bucks president Peter Feigin in a mind-boggling 16 out of its 18 paragraphs. Here, let’s arrange it as free verse:

The new president of the Milwaukee Bucks said Tuesday

Peter Feigin said

Feigin said   Feigin said   Feigin said

Feigin said   Feigin said

He said

Feigin said   Feigin said   Feigin said   he said

Feigin said

he said

Feigin also said

Feigin spoke at the War Memorial Center at a luncheon sponsored by the Rotary and the Milwaukee Press Club.

If you’re wondering what Feigin talked about, it was the usual stuff: He thinks the government should spend public money on his team’s stadium, he wants to create “economic growth,” etc. But really, this article is remarkable less for the content of Feigin’s talk than for the fact that the Milwaukee Journal Sentinel now appears to be paying someone to take dictation on the local sports team’s advertorial copy.

When something like this comes up, I immediately think of the story that Frank Rashid of the Tiger Stadium Fan Club told me about his interaction with one of the local Detroit papers over an article regarding subsidies for a new stadium for the Tigers, which the TSFC opposed. Here’s how we recounted it in chapter six of Field of Schemes:

On one occasion, Rashid recalls, he wound up calling the Free Press to complain about an inaccurate story about the Fan Club. He pointed out to a city desk editor that the reporter had printed inaccurate statements by the group’s opponents about the Fan Club, statements that the reporter himself had to have known were untrue.

The editor, according to Rashid, replied with indignation, “What do you expect? [Then-Detroit Tigers owner] Tom Monaghan has made money. He’s paid his dues. Who are you guys?”

“I really appreciated the honesty,” says Rashid. “But, damn! None of us is disreputable. We’re all people who are solid citizens, but we don’t have money. Solid citizens without money don’t count as well as somebody who’s got a big corporation.”

 

Bucks president promises “financial story” on arena by end of January

I’ve been describing Milwaukee Bucks arena plans as “largely stalled,” because they are, but the Bucks owners are not going to stand for that! They’re going to have news for you, and news for you soon, Bucks president Peter Feigin tells his stenographer Rich Kirchen of the Milwaukee Business Journal:

When I asked whether news on the site would emerge by the end of January, Feigin said: “There definitely will be some news — there’s not a question.”

The news will include the majority of the footprint where the Bucks owners want to build an arena and surrounding private development, Feigin said. The news also will include “the financial story and positioning,” he said.

Well, that’s certainly a promise, in a completely nonspecific way. If you’ve been dying to know the general area where the Bucks want to build, though, and the “financial story,” whatever that means, then it’s going to be Christmas in January for you!

Bucks poll fans: How totally awesome would a new arena be?

The owners of the Milwaukee Bucks are surveying fans about a possible new arena, and at least one fan wonders if this means they might be reconsidering building new, and looking at renovating the Bradley Center instead. Let’s look at what we actually know about the survey (from Don Walker of the Milwaukee Journal-Sentinel, of course), and see if that seems likely:

That proposed arena, the letter states, “would provide the local and regional community with a state-of-the-art venue that would attract major events to the area, act as a catalyst for the revitalization of the downtown area, and serve as the home of the Milwaukee Bucks, which has called the city home since 1968.”…

The survey also attempts to gauge what it would take to get residents to see a Bucks home game.

The survey question asks:

“Considering that a new downtown arena could provide fan amenities such as wider concourses, new concessions/restrooms, and new seating areas, would you consider attending Bucks home games in future seasons at a new downtown arena?”

That’s all that Walker says about the survey, but even so, this looks more like a push poll than a simple attempt to gain information: “A new arena would rock! Don’t you want one?” With progress on arena talks having largely stalled — both the site and the funding plan are completely nebulous at this point — it’s one tried-and-true way to get local residents thinking happy thoughts about a new building. And local journalists, apparently.

Bucks owners leak that they’ll up their arena share to $150m, hope no one asks about the other $200m or so

This is probably not the most fun time to be one of the owners of the Milwaukee Bucks. Your arena plans are stalled for lack of a site that you can get anyone to sell you, your hopes for a “jock tax” to kick back your employees’ income tax payments to fund an arena are getting hammered as a secret Republican tax increase, and the $100 million the guy you bought the team from plans to give you toward the arena has been exposed as a massive tax dodge. What to do? How about have someone anonymously leak that you’re willing to chip in slightly more of your own money toward arena costs? Think any reporters will bite on that?

Bucks’ owners to kick in $50 million more than thought for arena

By Don Walker of the Journal Sentinel

Of course.

This is actually a rumor that Walker first reported all the way back to August, but having an actual source (albeit unnamed) giving a specific number enables the Journal Sentinel to put it in a headline, and what else do you want from a slow holiday news week? Sure, naysayers might point out that this still leaves at least $200 million in arena funding unaccounted for, but that can be covered down in the 17th paragraph:

A number of ideas are on the table, including asking the state Legislature to approve a bonding plan to raise at least $150 million. Supporters of that plan argue that the request by the Bucks would be no different from any other company seeking state bonds for an economic development project.

“A bonding plan.” Journal Sentinel editors, you do know that bonds have to be paid off somehow, so “have the state sell bonds” makes about as much sense as an ultimate funding solution as “put it on our credit card,” right? Right? Oh, dear.

Former Bucks owner to get giant tax writeoff for giving money to new Bucks owners for arena

Hey, remember how as part of his deal to sell the Milwaukee Bucks, former U.S. Senator and current really rich guy Herb Kohl pledged to donate $100 million to a new arena in Milwaukee? This was painted by the local media at the time as a sign of Kohl’s generosity and commitment to his home town, something that is only slightly diminished by the news that Kohl is using the gift as a tax shelter that could be worth as much as $36 million:

The [Greater Milwaukee Foundation] will simply pass-through the $100 million Kohl had already promised for a new arena to that project. And so Kohl gets a charitable write-off for money that will essentially go to benefit a private business.

“It’s a classic tax avoidance maximization approach,” says Aaron Dorfman, executive director of the Washington, D.C.-based National Committee for Responsive Philanthropy. Dorfman notes that because Kohl sold the team this year, “he needs to get the donation on the books for this tax year.” And the foundation was happy to help Kohl. “We are honored to help a dedicated philanthropist fulfill his charitable wishes,” Gilligan told Urban Milwaukee.

This is an awfully expansive definition of “charitable,” given that the money is actually earmarked to build a new arena for the private NBA team whose new owners just gave Kohl $550 million for the franchise. (The state or city will need to create a tax-exempt public authority to receive the arena gift for this to work, but that’s standard operating procedure for most new sports venues anyway.) In fact, looked at the right way, new Bucks owners Marc Lasry and Wesley Edens are effectively laundering $100 million through Kohl and the Greater Milwaukee Foundation to spend on their own arena, though it’s awfully early in the morning for me to figure out the exact tax benefits to this route vs. just spending the money and taking it as a capital expense.

Anyhoo, this has been your daily reminder that rich people don’t have to obey the same tax laws as the rest of us. Just in case you forgot.

Bucks owners now don’t know where to put arena, let alone how to pay for it

So apparently all that talk about how the Milwaukee Bucks owners were interested in buying the Milwaukee Journal Sentinel’s building as the site of a new arena and the Journal Sentinel owners were “willing to listen” didn’t actually mean they’d be able to agree on anything. Bucks co-owner Marc Lasry now says that talks have “gotten more complicated” (the Milwaukee Business Journal’s Rich Kirchen claims this is because of “possible environmental contamination” at the JS site) and “I think it’s going to force us to sort of go to Plan B,” which would be, um, somewhere. The JS speculates that the Bucks owners may not now be able to settle on a site by the end of the month as they’d planned, which isn’t that much speculation, really, since 2015 is only three weeks away.

Meanwhile, on the arguably more important issue of where to get the money to build this mythical arena, the co-chairs of the community group Common Ground’s Fair Play committee had an op-ed in the Journal Sentinel yesterday that began like this:

The Nov. 24 Journal Sentinel article about the possibility of funding a new Milwaukee Bucks arena with money from players’ income taxes seems almost oblivious to the fact that the tax already exists.

An excellent point, if I do say so myself. The Fair Play chairs go on to discuss how punching a $10 million a year hole in the state budget would either force the state to raise taxes or cut services (because math!), but you can probably figure out the rest from here. With the Republican who control the governorship and both houses of the state legislature the ones in favor of the “jock tax” kickbacks, budget math may not matter as much as ballot math, but it never hurts to point it out.

An NBA commissioner walks into a Milwaukee bar, says “Why the long face?”

NBA commissioner Adam Silver went to Milwaukee yesterday, and ate custard! Okay, no, he didn’t. (Or maybe he did, but that wasn’t the headline.) What he did do was meet with the owners of the Bucks, city and county officials, and local business leaders about a new arena, and emerge with this statement:

“Feel very confident that these guys are gonna get it done. I think it’s absolutely doable. We’ve seen an enormous amount of positive energy in this community,” Silver said.

That may be the most noncommittal non-statement in the history of sports commissionerships, but really, it doesn’t matter what Silver said, because all commissioners have to do to heat up arena talk is to get on a plane.

My favorite bit about this Fox6 report on the head of a sports league endorsing the notion of getting new sports venues built with public money is that with Silver, Mayor Tom Barrett, and Milwaukee County Executive Chris Abele all speaking mostly in platitudes, they had to turn to someone else to go into more detail about the arena plan:

Rich Kirchen with the Milwaukee Business Journal tells FOX6 News that preferred site is the location spanning the UW-Milwaukee Panthers Arena and the Journal Communications building.

“The Bucks like that site. It’s pretty centrally located,” Kirchen said…

One potential idea is a so-called “jock tax” — setting aside the taxes NBA players already pay the state  and using them specifically for building the new arena. That could cover a $150 million loan from the state.

“It’s the one thing that has not been ruled out by Gov. Walker or the Republicans in the State Legislature. And they’re the ones who would ultimately give sort of, the high-level approval on something like that,” Kirchen said.

That’s right, not only is Rich Kirchen warning Milwaukee Business Journal readers about the “culture of caution” that prevents cities from throwing money at sports deals, but he’s actually being interviewed by other Milwaukee journalists as an expert on the Bucks arena plan. I hope that he next returns the favor and next writes a column interviewing the Fox6 reporters about what they learned about the Bucks arena plan from their interviews with stadium experts, until eventually all of the Milwaukee media crashes from a stack overflow.

(And yes, I’m aware of the irony of criticizing a journalist for being interviewed as a stadium expert when I get interviewed on this basis all the time. In my defense, I’d point out two things: 1) I wrote a book, at least; 2) I’d hope that no reporters are lazy enough to ask me to explain the state of arena talks instead of, you know, actually doing the reporting themselves.)