Milwaukee official says arena subsidies are stupid, proposes sales tax hike to pay for one

Sure, every politician in Wisconsin is coming up with a way to use public funds to help pay off a new Milwaukee Bucks arena, but what do those other people in Wisconsin think? You know, the ones who voted them into office?

Seventy-nine percent of registered voters oppose a plan being discussed by Republican legislative leaders for the state to cover part of the $250 million in public funding the Milwaukee Bucks owners say they need to complete funding of the estimated $500 million project, [a Marquette Law School] poll found.

The poll only asked about Gov. Scott Walker’s plan for the state to borrow $150 million for an arena, not other iterations of public funding; still, that’s a pretty whopping majority, and the margin wasn’t much smaller (67-29%) when the poll looked at only residents of Milwaukee itself. And you know who else thinks giving public money to sports teams for new buildings is a lousy idea? Milwaukee alderman Bob Bauman, that’s who:

No one has answered the question: why are we providing any public money in the first place? Explain to us again why there’s a need for any public financing for a private basketball franchise. Why are we offering any money? Why is that even on the table?

The answer may well be, well, we’re being extorted. Then we at least know that, and the answer is these guys are going to get public financing because they can. They can leverage one city against another and basically extort the money. But so far, it’s just assumed that a private professional sports franchise requires a public subsidy. Why is that so?…

It is a money-losing investment, from the public standpoint.

Bauman then followed this up by — just minutes later — proposing to hike sales taxes by 1% in Milwaukee County to fund a new Bucks arena. And new parks. And mass transit. And museums. And cut property taxes. Raising sales taxes by that much would funnel a ton of money from Wisconsin shoppers to the county government ($125 million a year, by Bauman’s calculations), so the county could use it to pay for all kinds of stuff, only some of which are extortion plots that voters overwhelmingly hate.

Now, it’s entirely possible that Bauman isn’t entirely serious about this, and that he’s just floating his sales tax plan either 1) to tweak state officials for refusing to consider a tax hike as a way to pay for public projects or 2) to try to build support for funding other things, like public transportation, that he actually likes. Still, it’s not every day that a U.S. elected official gets up to proclaim that sports stadiums are a ripoff and blackmail, and we should immediately raise sales taxes to keep team owners happy — in a state that once recalled a state senator for approving a sales tax hike that was only one-tenth the size for a Brewers stadium. Racino time is weird, indeed.

Wisconsin senator whose brother is Bucks lobbyist says time is now to pass arena bill

Momentum! It’s a mysterious political process that mostly involves elected officials declaring loudly that a proposal has it, then repeating it often enough that the local media believes it. In the case of the Milwaukee Bucks arena talks, we’re now in full perpetual motion machine mode, with Wisconsin senate majority leader Scott Fitzgerald declaring that public funding for a Bucks arena can get done by Memorial Day, notwithstanding that it would require the city of Milwaukee to provide cash that Milwaukee Mayor Tom Barrett says he don’t wanna, plus that Fitzgerald’s own plan for state funding doesn’t actually include a revenue source.

(Yes, I know that I previously said this was the racino phase, but there can be a phase and a mode at the same time, okay?)

Fitzgerald also indicated that he’d be looking to Milwaukee County to chip in some funding, to go along with $150 million in kicked-back future NBA player income taxes that may or may not materialize, kicked-back property taxes from a possible tax increment financing district for the Bucks’ planned development alongside the arena, and anything else he finds while digging through supply closets. The goal here appears to be to set a deadline, thus shifting the question from “Should we help pay for a Bucks arena?” to “Which of us is going to pay for a Bucks arena?” And the fact that Fitzgerald’s brother is a paid lobbyist for the Bucks undoubtedly has nothing to do with this sudden urgency at all.

Bucks have pretty pictures of planned arena, still no idea how to pay for it beyond “not us”

The owners of the Milwaukee Bucks released their arena-plus-entertainment-plus-can-opener plan on Wednesday, and as it looked exactly as had been hinted at the day before ($1 billion in costs, no idea how to pay for it), I didn’t think it was worth an item here. But then I realized: I was neglecting your vaportecture porn! So, here you are, your Bucks arena district that may or may not be built and/or look like this if it is:

Do you think they teach special “ray of light” courses in architectural school? I can only imagine the instructors: “No, no, more beamy! Don’t you know spotlights are the physical manifestation of economic activity?”

Anyway, Gov. Scott Walker and state assembly speaker Robin Vos immediately took advantage of the new pretty pictures to berate the city and county for not putting more money into the Bucks plan, because that’s the only idea they have for paying for it:

“When you look at the impressive development plans unveiled today, it’s clear that the city and county need to step up their game and make more of an investment in the project than what they have initially put forward,” Vos said.

Asked whether the Milwaukee Bucks owners or Mayor Tom Barrett needed to do more, the governor focused on the city.

“I think it would be helpful with the Legislature, particularly the city stepping up,” Walker said. “I think there’s a clear sentiment from the speaker and the (Senate) majority leader who have pointed out they want to see a strong commitment from the city and the county. We’ve talked with them and we’re hopeful that we’ll get there.”

Barrett responded that he still likes Gov. Walker’s plan where the state would pay for pretty much all the subsidies, even though Walker himself has pretty much admitted that plan is dead. If everybody involved is just going to play Alphonse and Gaston with the bill, we could be here a while.

Meanwhile, somebody (Don Walker of the Milwaukee Journal Sentinel) asked Bucks co-owner Wes Edens if he’d consider putting more of his own money into the arena, since he’s going to be the one having his team play in it, and got this as an answer:

“I don’t know really what the answer to that is,” he said. “There is an economic side to it, and it has to be a viable transaction.”

Edens said the owners’ existing financial commitment “kind of pushes the limit” on that viability, but he acknowledged that the wealth of the owners “complicates the narrative.”

Translated: A new arena wouldn’t make money for us if we had to pay for building it, only if somebody else shoulders half the cost. That’s certainly honest, but it raises the question of why a new arena is a good idea in the first place, if it’s a money loser. For some reason “impressive development plans” aren’t expected to be a reason in themselves for private businessmen to cough up money, but the public purse is another story: So much of the stadium and arena game really does come down to “Lookit the pretty pictures, you can’t afford not to do this!” So we get lots of pretty pictures, and not much in the way of testing whether transactions are viable. Which is how you end up in racino land.

Bucks owners to announce $1B arena development project that they still don’t know how to pay for

Stop the presses! The Milwaukee Bucks owners are set to make a major announcement today about their new arena, and it’s going to be a game changer, which we know because the Milwaukee Journal Sentinel calls it “game-changing” right there in their headline! Don Walker, what’s the scoop?

Envisioning an entertainment hub that would transform downtown, the Milwaukee Bucks plan to build a $500 million arena just north of the BMO Harris Bradley Center and use that as a springboard for an additional $500 million in development, much of it in the largely vacant Park East corridor…

The development would include a 700,000-square-foot, 17,000-seat arena; a 60,000-square-foot public plaza, anticipated as a sort of live entertainment space on what is largely a city-owned parking ramp at the corner of N. 4th St. and W. Highland Ave.; and arena parking across the street in the Park East area. Total amount of space just for that portion of the development: 1 million square feet.

Okay, we actually kind of knew that part already, except that the $500 million price tag on the ancillary development is new. (Also potentially completely made up, since it’s private development that the Bucks owners could scale up or down at will, but let’s leave that aside for now.) What everybody wants to know is how they’d pay for it. What’s with that, Bucks owners Wes Edens and Marc Lasry?

For now the Bucks are backing Gov. Scott Walker’s proposed $220 million state bonding plan, buttressed by a $150 million commitment from Bucks owners Wes Edens and Marc Lasry, and a $100 million commitment from former Sen. Herb Kohl.

Oh, the plan that everybody in Wisconsin, including the Journal Sentinel itself, declared dead two weeks ago? Excellent! Apparently not only politicians can play the game of announcing arena plans but not how to pay for them.

What’s going on here is pure PR: Edens and Lasry are clearly hoping that by throwing in a bunch of additional development, asking for $220 million from the state (and maybe $50 million from the city) will look better: It’s not more than half of a $500 million arena project, it’s only a quarter of a billion-dollar arena-and-development project! This doesn’t seem all that likely to win any friends in the state legislature, which is what matters right now, but it does have the potential to maybe stem the tide of “Bucks arena going nowhere” press that’s been the general theme the past couple of weeks. Hey, Don Walker is upbeat about it! Now that’s what I call momentum!

Every politician in Wisconsin now has Bucks arena plan, won’t say what it is

When Wisconsin Gov. Scott Walker’s plan to raise $250 million for a new Milwaukee Bucks arena fell apart two weeks ago, I fully expected every elected official in town to start throwing ideas at the wall. What I didn’t expect was every elected official in town to start announcing they had ideas, but not what they were. So far we’ve had:

And now the latest, from Milwaukee County Executive Chris Abele, who looks creepily like a young Bud Selig:

Milwaukee County Executive Chris Abele says his staff is working on what he called alternative models that will get the entire project funded.

Abele has declined to detail what that funding plan is and what role the county would play.

Can I play, too? I have a funding plan for a Bucks arena that won’t cost anyone a dime, that can make it through the state legislature, and that rewrites the laws of thermodynamics! I can’t divulge what it is, though, that’d be telling.

Wisconsin senator floats new way to pay for Bucks arena, lacks only way to pay for Bucks arena

So it’s the end of the week, and you’re asking, where’s that new Milwaukee Bucks arena funding plan that Wisconsin Gov. Scott Walker promised us would avoid using tax money? We now have one, but it was announced not by Walker, but by state senate majority leader Scott Fitzgerald. And the magic is:

The proposal from Senate Majority Leader Scott Fitzgerald, R-Juneau, would use $150 million in funding from the Board of Commissioners of Public Lands and its $1 billion in assets. It’s similar to a loan that funded improvements to the Green Bay Packers’ Lambeau Field.

Wait, but, but … that isn’t a funding source at all — that’s just a loan. (The Packers loan was repaid by…) How would the state make its payments on the $150 million? Sen. Fitzgerald? Anyone?

In addition, the lawmakers would need to provide a financing mechanism to pay off the bonds such as the one proposed by Walker, who wants to use the increase in income taxes paid over time by the Milwaukee Bucks players and those of rival teams.

Yeah, a little bit, huh? Headline writers of the world (particularly, but not limited to, the Milwaukee Journal Sentinel), do you even stop to check whether a new arena funding option is actually involved before typing the words “new arena funding option”?

What seems to be involved here is an attempt to do two things: Get a lower interest rate on the arena debt (though municipal bonds are pretty cheap to begin with) and borrow the money through a program that uses the interest payments to fund public school libraries, thus enabling the state government to claim that it’s helping school libraries. (The number of school libraries that could be built with the actual $150 million, and not just the interest on it, goes unmentioned in these articles.) It’s not much, but when you’re throwing stuff at the wall to see what sticks, it’s as good a way of trying to generate momentum out of thin air as anything.

Unfortunately for Fitzgerald, the mayor of Milwaukee hates his plan, probably because it opens up an additional $70 million funding gap that the city could be expected to fill. The racino phase is still very much on.

Walker promises new Bucks arena plan in “next few days” that magically won’t cost anybody anything

Oh, yeah, it’s definitely racino time in Wisconsin, where Gov. Scott Walker has announced that “in the next few days” he’s going to announce a new Milwaukee Bucks arena plan to replace his old arena plan that everybody hated. And what will be in the new plan?

Walker gave no specifics of the new plan but said that the alternative plan would not siphon off any tax revenue from the state’s existing tax base or rely on any new taxes.

So that leaves revenue from existing taxes as they bring in more revenue in the future — in other words, some variant on a TIF, just as his old “kick back any future rise in NBA income taxes” plan was. Any other specifics?

“It involves not only our Legislature leadership — Senator Fitzgerald and Speaker Vos, that I typically meet with on a weekly basis, but also representatives of the city of Milwaukee, the county of Milwaukee as well as the Bucks and I believe in the end we will find a viable alternative. We`re working with members of the legislative leadership, the city of Milwaukee and the county, and we’re having meetings even this week on that and once we reach a conclusion, we’ll be announcing that fairly shortly,” Governor Walker said.

Anything else, anyone?

Kit Beyer, [an Assembly Speaker Robin] Vos spokeswoman, said Vos has consistently said that in order to keep the Bucks in Milwaukee, city and county officials “need to step up more. He looks forward to learning what they can offer when they meet this week.”…

In addition, there is an expectation that the City of Milwaukee and Milwaukee County will be asked to contribute. No specific details of what the city and county could contribute have been released, though it is expected the city’s contribution will be in the form of tax-incremental financing districts for the expected ancillary development near the new arena site.

Put all the tea leaves together, and it sounds like Walker and city and county officials are going to be scrounging around for any future taxes that can be credited to the Bucks’ presence — even if some of these taxes would be collected on other entertainment options if the Bucks left — to see if they can get to $250 million. This is where that “ancillary development” that the Bucks owners promised last week comes in handy: If you package together enough stuff, and count up all the taxes that it’ll be paying, and then pretend that nothing else that would pay taxes will ever get built if not for the Bucks’ presence, then it’s all free money to the state and city, so why not just hand it right back to the Bucks owners, right? Right?

It all sounds so reasonable, and makes me yet again sad that I can’t find a YouTube video of that “Odd Couple” episode where Oscar’s gambling buddy wins big at Felix’s opera club casino night, uses the money to repay Oscar on a debt, and then Felix insists that it’s really his money and Oscar should give it to him, because “it’s from me to him to you to me, like an isoceles triangle.” Math is tough!

Milwaukee paper says don’t give up on Bucks arena now, just because no one has money to pay for it

The Milwaukee Journal Sentinel editorial board wants you to know that just because three year after the owner of the Bucks started agitating for a new arena, everybody is still just staring at each other wondering who’s going to pay the half-billion-dollar-plus price tag, they still think it’s a great idea. Because “everyone is still talking about a new arena in Milwaukee. And when everyone talks, something usually happens.” And because “a small city in a cold climate needs all the quality-of-life amenities it can get.” And also because “if Milwaukee wants to remain an ‘NBA city,’ the city must comply with NBA standards,” which are never defined, by either the paper or the NBA, but never mind about that, Seattle wants your teeeeeeeeam!

Not that the Journal Sentinel editors think Milwaukee should just roll over and give the new Bucks owners anything they want, oh no: They suggest the state could kick in $150 million, the city and county kicking in something that “may depend on the size and scope of any nearby development spurred by a new arena” (why, we’re again not told). And then maybe the Bucks owners will actually kick in something more than $150 million out of their own pockets, notwithstanding that the Journal Sentinel itself has already reported that they won’t.

In other words, there’s nothing new here, other than “Jeez, guys, everyone’s been talking about an arena without knowing how to pay for it for years now, why give up on that momentum now?” And, presumably, trying to turn up the heat on elected officials to get a deal done, especially when you consider that it ends like this:

Where’s former Gov. Tommy Thompson when we need him? He’d know exactly what to do.

What has Thompson been up to since leaving Wisconsin elected office, anyway? Oh, right, lobbying his old bosses in government for Medicaid changes that would directly benefit his private companies. Yeah, he would no doubt know exactly what to do, but something tells me he’d more likely be sitting on the other side of the negotiating table.

Bucks owners say “exploring” added development, so why make fuss over them only funding third of arena?

Great news, everybody! The owners of the Milwaukee Bucks may only want to put in less than a third of the construction cost of a new arena, and nobody may have any ideas how to pay for the rest, but as soon as they get gifted with that, they’re willing to build some for-profit development next to it on their own dime!

“Not only have our owners committed a sizable investment for the new arena, they’re exploring investments in potential ancillary development,” team spokesman Jake Suski said Thursday. “They want to be actively involved with the city, county and state in the planning and help assemble a world-class development team to see this bold vision realized.”

You know, we really should take a moment to stop and appreciate the rhetorical artistry here: Not only are we willing to pay for part of an arena that will entirely benefit only us, but we’re also thinking of maybe paying for some other development that will also benefit us! Aren’t we generous? It’s almost worthy of a prize of some sort.

Bucks arena finance cost grows, supporters turn pockets inside-out to see who has $250m in loose change

Oh, yeah, we’ve definitely reached the racino phase of Milwaukee Bucks arena funding plans, where everybody notices how big the funding gap is and scrambles for ways to fill it, crazy or not. As the first sign, we have another negativish arena article from the usually upbeat Don Walker, this one reporting that the state Legislative Fiscal Bureau has determined that Gov. Scott Walker’s plan to sell $220 million in bonds for an arena would result in between $323 million and $488 million in state costs.

This is just an updated version of the state report that Rich Kirchen of the Milwaukee Business Journal reported on last month, and just like then it’s still not entirely clear whether this is nominal state costs (i.e., adding up all the bond payments over time) or present value (how much money you’d need to have on hand now to make all the future payments). (Hey, Don and Rich, can you start indicating the difference, please? Bloggers everywhere without a budget to make calls to the LFB thank you in advance.) Usually inflated figures like this result from taking the nominal value, which isn’t the best way of looking at things — but given that the repayment plan would involve backloading payments until NBA salaries rose enough for enough of players’ state income taxes to be kicked back to pay off the bonds, we could be looking at a Miami Marlins-like scenario.

Meanwhile, the local commercial realtors group gathered last night to come up with ways to help support an arena plan, by … okay, let’s watch the video … “Where the rest of the money comes, that is still a matter of discussion — some say it will come from the city, some from the county, some from the state. Stay tuned.” Hey, that’s not “Realtors group makes pitch to support, fund new arena for Milwaukee Bucks”! I call headline fraud!