Bucks arena district plan moves ahead, despite lots of unanswered questions

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.

Bucks owner: No talks yet on arena lease, but how long does it take to write fine print, anyway?

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.)

Bucks lease talks to begin, bringing all-new ways for Wisconsin to gift team owners with cash

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.

Bucks arena finally gets final approval (pay no attention to the fine print)

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.

Even after $450m in arena subsidies, Bucks could still leave Milwaukee

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.

Bucks arena opening delayed until 2018, council reconsiders team-controlled plaza

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.

Milwaukee County sells $8.8m in land to Bucks for one dollar, swears this is best deal ever

So let’s see, anything new with the almost-approved-but-still-t’s-to-be-crossed Milwaukee Bucks arena?

Milwaukee leaders plan to announce that a chunk of downtown land has been sold to the city’s NBA team for $1 as part of the drive to build the Bucks a new arena complex.

The land was appraised at $8.8 million, but Abele’s office says that doesn’t factor in $8.3 million worth of needed demolition and infrastructure work.

Well, okay, that’s not too terrible, right? Sure, it’s free land, but if it would cost almost as much as the value of the land to get it in shape, and now the Bucks will be taking on that cost, then—

But the release left out the fact that the city is on the hook for undetermined costs, as noted by a city comptroller’s report, “Coordination between Bucks, Milwaukee County, the State of Wisconsin, MMSD, and the City of Milwaukee to remove footings in the Park East Land and to relocate a sewer in the Park East Land to Juneau Avenue – A Cost estimate cannot be determined at this time.” But at a celebratory event like this, no one was computing the exact amount this would leave the Bucks to pay for remediation of the land.

No one was computing it! Certainly not any of the journalists writing about the celebratory event, even through the comptroller’s report came out two weeks ago, which is more than enough time to, you know, call some expert in sewer relocation and ask for a ballpark number. Though at least Urban Milwaukee (the second citation above) noted the known unknowns — the Associated Press report, which unless I’m mistaken is all that the Milwaukee Journal Sentinel published about this land sale, just took Abele completely at his word, which is pretty bad even for a five-sentence article.

Anyway, the deed is now done, so Milwaukee County will be getting a crisp new George Washington, and the Bucks owners will be building an “anciliary development” to include a practic facility, and, um, some other stuff they haven’t actually drawn yet. Or will have an option to do so, anyway, since that’s all that the $1 really secured. But at least everyone concerned knows what they’re getting into, and that any actual development could be a ways off at best—

“This is creating thousands of jobs now. Right now.” Abele said he ran on a program of creating jobs, and now look what we’re getting. “Thousands of jobs now. Right now,” he repeated.

You know what they say: Repetition is the mother of … something.

Milwaukee residents continue to berate Bucks arena deal at latest public hearing

The Milwaukee city council held its first public committee hearing on the Milwaukee Bucks arena plan yesterday, and as at the council’s previous public town hall meetings, there was lots of unhappiness at the already-approved-by-the-state-but-not-yet-the-city deal:

“Buck owners Mark Lasry, Wesley Edens and Jamie Dinan are New York billionaire hedge-fund owners who have the resources to build this arena themselves,” Jennifer O’Hear, speaking for Common Ground, told members of the Common Council’s Steering & Rules Committee.

“They do not need our public money,” she said. “Our children and our neighborhoods need our public money.”

Okay, that’s Common Ground, which has been harping on this whole “schoolkids need more money than billionaires” thing for a while now. (Come on, what do schoolkids have to spend money on? It’s not like they could even drive a yacht if they had one!) What about the hoi polloi, the average Joe, the person on the street?

One speaker after another panned the idea.

“It’s trickle-down economics,” Mary Watkins said. “We are hurting. We cannot afford to put millions of dollars in a project billionaires can build on their own.”

Several speakers said they were opposed to the entertainment district, which they thought would cannibalize existing bars and taverns.

“I have long accepted that the ship has sailed and the arena will be built,” Pat Small testified.

“Downtown has no shortage of bars and restaurants,” he said. There is “no need to subsidize the entertainment district.”

Peter Rickman, of Wisconsin Jobs Now, told council members: “Milwaukee has a good jobs problem.”

He urged council members to hold the Bucks accountable for living wages and for workers’ rights, both during the construction of the arena and its facilities, and once those facilities were built and staffed with waiters, janitors and housekeepers.

On the other hand, according to the Milwaukee Journal Sentinel, “business and labor leaders” said the arena would be a “catalytic project,” presumably by means of something like this. The full council is expected to vote on the plan on September 22, at which point we’ll find out whose opinions they listen to.

Scott Walker goes on TV, tries to justify building all sorts of crazy things

Wisconsin Gov. Scott Walker went on Meet the Press yesterday, and they actually asked him about the Milwaukee Bucks arena subsidy deal that he pushed through. His answer was unsurprising:

“For the state of Wisconsin, it’s less than $4 million a year to protect $6.5 million we collect. And over the next 20 years, that grows to a total of just shy of $300 million the state collects in income taxes for less than $80 million,” he said. “I’d be a fool.”

This is the “cheaper to keep it” line again, and we’ve covered the problems with it before: First off, that $300 million figure for future state income taxes is made up out of whole cloth, and almost certainly hugely overblown. And secondly, the $80 million (I have $75 million, but whatever) in state subsidies is only a small fraction of the $450 million in state, county, and city cash and tax breaks that will be going to the Bucks owners, meaning even by Walker’s numbers, Wisconsin taxpayers overall would be taking a large loss on the deal, even if the state treasury in particular might come out okay.

Fortunately for Walker, he distracted voters from his crazy-ass arena math by elsewhere in the interview calling building a wall across the Canadian border “a legitimate issue for us to look at.” To be entirely fair, Walker was just agreeing with Meet the Press host Chuck Todd’s question that “Why are we always talking about the southern border, and building a fence there — we don’t talk about the northern border?” Though to be even more fair, saying things that are no more crazy than Chuck Todd isn’t exactly something worth bragging about.

Now that Scott Walker has okayed Bucks subsidies, Milwaukee residents get to say they hate them

Scott Walker may have signed the state portion of the Milwaukee Bucks arena funding bill, but the Milwaukee city council still needs to sign off on it too. And unlike the state’s round of discussion, which mostly consisted of lots of top officials gathering behind closed doors, the city seems determined to have more public hearings, which means Milwaukee residents can express how pleased they are that there’s a deal to keep their beloved NBA team in town:

“I can’t even afford to go to a Bucks game,” said Cherri Hampton, who lives near N. 20th St. and W. Capitol Drive, well north of the proposed arena site. “I think my money should go to the Milwaukee Police Department so they can protect my neighborhood.”

“We’re looking to cut education, but we come up with money to buy an arena for millionaires. It doesn’t add up to me as a regular citizen,” said Gilbert Johnson, lives near 30th and Michigan.

Feel the excitement!

Alderperson Milele Coggs told the crowd that the deal is “not done” and “I have not made up my mind”; it’s unlikely that the council will try to make significant changes at this point, regardless of what their constituents say, but unlikely isn’t quite impossible. A final vote is expected on September 22.