It’s a bit of a slow news day, so thank goodness the Milwaukee Bucks have come through with some new interior arena renderings for us to peruse while we wait for the last dregs of the week to run out:
I don’t know exactly what’s going on with that creepy dark club with the glowy rings on the ceiling — supposedly it gives fans views of both the court and the city, though given that in real life there would be more than ten people in it at any one time, more likely it will mostly provide a view of those TV screens as you crane your neck to see the score while waiting on line for overpriced food. The “corner sponsor tower” next to it, meanwhile, is even more mysterious — presumably it should have a big sponsor logo on it, but instead it’s just three levels of blank void with more of those geometric patterns on the ceilings. The interior of the levels doesn’t appear to be raked at all, so only the people at the front railing (there is a railing, right?) will be able to see the game, from a great distance, while everyone behind them will be … dancing? Enjoying presentations from the corporate sponsor of their choosing? What the heck does any of this have to do with basketball, exactly?
The state-run Wisconsin Center District and the Milwaukee Bucks have finally agreed on a lease for the team’s new $500 million arena that’s getting $450 million in public subsidies, and hey, look, it’s not entirely awful! The big questions, as you’ll remember, were “Who’ll pay for operating and maintenance costs?” and “Can the Bucks break the lease before the 30-year term is up?” and at least initially appears that the answers are “the Bucks owners” and “no”:
- The Bucks owners will need to deposit a minimum of $60 million over 30 years in a capital reserve fund to pay for maintenance, and the team must pay for all maintenance, repair, and upgrade costs. (One report says this also includes operating costs; others are silent on the matter.)
- The lease includes penalties for breaking the lease that start at $553 million in the first year and gradually decline to a bit more than $200 million by the end.
- The team will actually pay rent! Not much rent — starting at $1 million a year, rising to about double that by the end — but so many teams pay no rent or negative rent, this qualifies as worth one cheer, anyway.
None of this makes the public arena cost a good deal, mind you. But at least the lease doesn’t look to have made it any worse.
They’re not nearly as batshit as yesterday’s Washington NFL renderings — not to mention they’re for a building that is actually getting built in an actual location — but the Milwaukee Bucks have released renderings of their new $500 million arena being built with $505 million in public subsidies:
That outer shell that supposedly looks like a “wave” (if waves were brown, which I don’t really want to think too hard about) is going to be made up of “zinc panels chemically treated to achieve a gritty, brown-rust patina,” which is a different kind of intentional rust color than the weathered steel used on the Brooklyn Nets arena, but promises to be just as ugly. (Name one attractive rust-brown building you’ve seen. I’ll wait.)
The inner seating bowl is somewhat more promising, though the cheap seats in those tiny upper decks separated by two decks of luxury suites are going to royally suck; and while the large lower deck will be nice for anyone who can afford to sit there, forcing everyone to enter and exit at the back of the section is going to make for some epic foot traffic jams at the end of games.
As usual, though, the real fun part is nitpicking the little details that the architects probably added at 1 am when they didn’t know how to fill out a blank space on their drawings. Like, what’s up with that strange balcony projecting off the front of the building, the better for drunken fans to throw their beers/themselves down onto passersby? And how much did those people pay to stand in those weirdly backlit sections in the upper-deck corners, and why? Who are those two opposing players near midcourt supposed to be guarding? What exactly is Greg Monroe doing in that replay (?) on the video board? Why does anyone think Greg Monroe will still be on the Bucks when the new arena opens in 2018? Play along yourself in comments!
Happy National Notice That Stadium Subsidies Are A Bad Deal Day, everybody!
- The Wall Street Journal notices that the soon-to-be-again Los Angeles Rams are set to join the San Francisco 49ers and Golden State Warriors in building new sports venues without much in the way of public money, and declares this a trend, in California, at least. Though the authors then note that the Sacramento Kings got plenty of public cash, and the San Diego Chargers could yet get a bunch from that city, “despite a wealth of academic studies showing that stadiums and arenas are poor investments when it comes to economic development.” I’m not exactly sure what this all is supposed to add up to, but it does provide a nice roundup of the stadium landscape for anyone who’s been living under a rock.
- The San Gabriel Valley Tribune asks if the new Rams stadium in Inglewood will provide a big economic boost to the region, and cites a couple of economists and the finance director of Foxborough, Massachusetts in answering, “Nah.” In particular, Vanderbilt’s John Vrooman replies: “The net local impact of a professional sports team is zero, if not negative sum, particularly for an NFL team playing in a monolithic space-eating stadium. … The local sports bars will probably rock, but most direct spending at the stadium stays at the stadium. The injection of new cash flow into the local economy is negligible because it’s coming at the expense of local spending someplace else. The indirect spin-offs are also small because most of the spending leaks out of the economy like a sieve and so the urban/regional multipliers are usually zero, zip … nada.” Stan Kroenke’s poor poor people are going to be awfully disappointed.
- Milwaukee’s Fox6 looks at the “arena district” the Bucks are promising to create around their new taxpayer-subsidized arena, and notes that in Columbus, while restaurants around that city’s new arena indeed did great, restaurants in other parts of town saw business decline: “Other restaurants went out of business and a lot of people started moving out of the neighborhood and into newer apartments,” said Tony Scartz, a restaurateur in the Brewery District across town from the new arena. “And most importantly, for me personally, was the office space vacancy that was created because people moved out of the Brewery District and into the newer office space down around the Arena District.” This is exactly what you’d expect from the substitution effect, as explained in the Fox6 piece by, um, me.
Tune back in tomorrow, when some city official somewhere will tout the massive economic benefits available from building a new sports venue! They will fight eternally…
The Milwaukee Plan Commission has given its unanimous approval to the Bucks‘ arena district plan, which will now move ahead to the Milwaukee Common Council for a vote there. While the $450 million in subsidies for the $500 million arena have already been approved, elected officials still need to approve a bunch of zoning changes for the arena and surrounding “entertainment district” that the Bucks owners are promising to build, which will be easily distinguished from surrounding buildings by not being shapeless gray blobs.
The controversial bits of the redevelopment plan include tearing down an existing parking garage before building a new one (Bucks execs say they’ll provide shuttle buses for fans in the meantime) and closing a block of N. 4th Street to provide the Bucks with a public plaza. Both of those elements have raised the hackles of alderperson Bob Bauman, so expect more debate on them once the plan hits the council next month.
Meanwhile, there’s still no sign of a lease agreement on the arena, which needs to address such humongous issues as how to pay maintenance costs and whether the Bucks can break their lease before the term is up. The Bucks owners still say they hope to break ground in April, but hey, they can always leave some details to be figured out later — because that’s worked out so well in the past.
The Milwaukee Bucks owners have revealed that their new taxpayer-funded arena won’t open until 2018, which was already reported last month, but it’s officialer now. Wes Edens and Marc Lasry, you will recall, spent years giving the impression that a new arena needed to be in place by 2017 or else the team would move, but now that they have their $450 million in public cash and tax breaks, sure, no hurry.
In more newsy news, Edens said he hasn’t even begun lease negotiations with the state, but expects them to be completed by the end of the year anyway: “The lease negotiations are very important and they’re meaningful but I don’t have the same sense of anxiety about them that we did during the whole financing process.” That seems awfully blasé given that the two sides need to agree on such huge items as who’ll be responsible for which maintenance costs and whether the Bucks can break their lease before the term is up, but maybe Edens is just trying to convey a “Hey guys, this’ll be easy, just sign on the dotted line there, no need to read it” vibe. (PRO TIP to Wisconsin Center District negotiators: Don’t do that, it never works out well.)
The Milwaukee Journal Sentinel ran a loooooong article yesterday about the pending talks over the Bucks‘ lease on their new arena, which came down to: The Brewers have to pay part of the maintenance costs on their stadium, but that doesn’t stop them from letting fans drop peanut shells into the air vents which end up corroding the heating units, which eventually could leave the public with a broken stadium at the end of the team’s lease. And what if the Bucks do that too, huh?
It’s an interesting enough question — who knew that there was such a thing as peanut corrosion? — but ultimately way less important than another item yet to be negotiated: whether the public stadium authority will have any recourse if the Bucks try to break their lease and leave before the 30- or 40-year term is up. That’s important not just because taxpayers could be left holding the bill for an arena with no team, but because the Bucks owners could use any out clause as leverage — as has happened in numerous other cities — to extract more arena upgrades or even a whole new building 10-20 years down the road.
It sounds silly now, sure, when the new arena isn’t even built yet, but then, it probably sounded like a silly concern in St. Louis or Indianapolis or Houston when those cities built new sports venues. The only time to get the lease right is now, when it’s being negotiated — or the Bucks arena could way too easily be the half-billion-dollar gift that keeps on giving.
The Milwaukee city council, after two months of debate and contentious public hearings, cast its vote on city subsidies for a parking garage and team-controlled pedestrian plaza for a new Bucks arena this morning, and … come on, what did you really expect?
A $47 million city spending plan for a new Milwaukee Bucks arena won Common Council approval Tuesday, the final endorsement needed for a $250 million public financing package that includes state and county cash.
The council voted 12-3 Tuesday to approve the plan, with Ald. Mark Borkowski, Ald. Nik Kovac and Ald. Tony Zielinski in opposition.
The passage of the city cash has been a fait accompli for a while now. The big question was what would happen to Ald. Bob Bauman’s proposal to amend the plan so that it would no longer permanently close North 4th Street and give the resulting pedestrian plaza over to the Bucks. And the result was, according to one correspondent who was there, that nothing was actually resolved about that: The question of whether the pedestrian plaza will be year-round or only on game days was kicked back to the city Department of Public Works, which has say over such matters, and which will now need to have its own set of hearings and whatnot. Which the Bucks owners presumably won’t like, but what are they going to do, turn down half a billion bucks out of spite?
The other big unknown that remains for the Bucks arena — other than the final design, which the council will get to sign off on later this fall, but that’s even less likely to provide fireworks (aside from any that are unleashed by the magic basketball) — is the team’s lease, and in particular whether it will include an agreement with any teeth to keep the team from leaving town before the building is paid off. Or threatening to leave town, which can be just as bad, as Indianapolis found out to its dismay. The city council didn’t have any say over the lease language, so it’s going to come down to negotiations between the governor’s office and the Bucks. At least Scott Walker has plenty of time to spend on this now, right? And surely he’ll drive a hard bargain, since it’s not like he has a conflict of interest or anything.
The deal to provide the Milwaukee Bucks owners with $450 million in city, county, and state subsidies for a new arena in exchange for staying put in the city may be even worse than anyone thought: As it turns out, that whole “staying put in the city” thing is less of a commitment than a breakable promise:
Milwaukee Common Council president Ald. Michael Murphy believes taxpayers should get stronger protections in case the Milwaukee Bucks would leave town before the $250 million public debt is paid off on the arena project.
The arena-funding legislation Wisconsin Gov. Scott Walker signed Aug. 12 allows public entities to sue the team’s owners for damages if the Bucks relocate. Murphy said that doesn’t go far enough.
Yeah, no kidding it’s weak. A really ironclad lease agreement — see St. Petersburg’s deal with the Tampa Bay Rays for example — sets monetary penalties for leaving early, up to and including repaying all the public money that you got in order to stay. Merely allowing the local government to sue for damages is much, much weaker, especially if the owners of the Bucks do like the owners of the former Seattle Sonics did and switch gears to arguing that there’s no way to prove an economic benefit to cities from the presence of a sports team. Which would be ironic, needless to say, but you can’t sue for irony, even in America.
The Milwaukee city council has no jurisdiction over the Bucks arena lease, so Murphy has stuck to expressing his concerns in a strongly worded letter to the chair of the Wisconsin Center District Board. “I’ll be surprised if he signs a lease without tightening the restrictions,” Murphy told the Milwaukee Business Journal. I, for one, will be less surprised, but I suppose there’s always hope.
The Milwaukee Bucks arena plan is creeping its way through the city council, and while so far all signs are that the city’s $47 million in subsidies will be approved — it’s passed two committees so far, and goes to the full council on Tuesday — there have been a couple of speed bumps:
- Alderman Bob Bauman successfully introduced an amendment that would allow the pedestrian plaza in front of the arena to be open to traffic on non-event days. This is a problem, the Milwaukee Journal Sentinel writes, because “the arena is being designed with a focus on heavy pedestrian traffic on that block, including using the plaza at nonevent times for ticket sales and other activities, a Bucks source said.”
- The arena now won’t open until 2018 instead of 2017 as originally planned.
The delayed opening isn’t a huge deal — it’s not like Bucks fans will be hugely put out by having to go to games at the Bradley Center for another year. As for the pedestrian plaza, this is shaping up to be one of those battles over privatizing use of a public street, a la the Boston Red Sox‘ use of Yawkey Way, that are increasingly cropping up as team owners realize they don’t need to restrain their ambitions at their stadium walls. A reasonable solution would be for the Bucks to pay rent on the street if they really want dibs on it — the Sox are paying less than $1 million a year, which is chump change as these things go — but we may be way past the point of negotiating reasonable solutions, and even Bauman said he’s not sure his amendment will survive a full council vote. We’ll find out more on Tuesday.