Milwaukee business group proposes spending so much on Bucks arena and museums, they can’t even count it all

Milwaukee’s Cultural and Entertainment Capital Needs Task Force — an epic name for what’s really just a committee of the local chamber of commerce — issued its recommendations for how much the city should plan on spending for a new Bucks arena and on local museums and zoos. And the answer is, unsurprisingly: a lot. Though perhaps more surprisingly, it’s not clear exactly how much of a lot:

It will take nearly $34 million each year over a 20-year period to address deferred maintenance needs and capital improvements at four major Milwaukee cultural institutions and provide public financing for a new arena…

According to the presentation, the total estimated investment over 20 years would be $445 million, not including interest. No figure was offered for a 20-year cost that includes the cost of borrowing.

Okay, so not counting interest, $34 million a year for 20 years would come to … $445 million? Wait, that’s not how multiplication works. And adding operating costs for all the facilities would, according to the Milwaukee Journal Sentinel, mean “an estimated $44.9 million would be needed each year totaling $675 million over 20 years” … which doesn’t add up either. Come on, doesn’t anybody at the Journal Sentinel have a calculator?

Anyway, the task force also proposed a whole bunch of ways to raise public money toward these pressing needs, including a sin tax on alcohol and cigarette sales, tax increment financing, ticket taxes, or a sales tax hike. The apparent goal of all this is to muddy the waters by dumping a whole bunch of different projects into one pile, throwing out a long list of different financing plans, and then hoping people focus on deciding which option they find least distasteful instead of questioning why the chamber of commerce gets to decide city spending priorities in the first place. In fact, maybe this explains the math issues — we’ll know for sure what they’re up to if the next Journal Sentinel reader poll turns out to be “What do you think 34,000,000 times 20 equals?”

Guy wants to raise sales tax to fund Bucks arena, gets in paper because he’s landed gentry

The Milwaukee Business Journal reports that Gary Grunau has proposed funding a new Bucks stadium with the help of a 0.5% sales-tax hike throughout Milwaukee County. And who is Gary Grunau?

Milwaukee County should enact an 0.5 percent sales tax that would sunset after six years and provide $400 million toward improvements at the Milwaukee County Zoo, Marcus Center for the Performing Arts and Milwaukee Public Museum as well as a new downtown arena and a streetcar system linking the city’s universities, Milwaukee commercial real estate developer Gary Grunau proposed Friday.

You know, there are all kinds of people with suggestions about what to do about a Bucks arena. Most of them, including close to two-thirds of those in Milwaukee County itself, do not want to raise sales taxes to give money to the Bucks for a new arena. Those people do not own lots of property, however, so they don’t get to have their pet plans published in the local business journal.

And what does Grunau have to say about those who are opposed to subsidizing the Bucks with sales tax dollars?

“A half cent is 50 cents on a hundred-dollar purchase, which isn’t going to kill anybody in this community,” Grunau said.

Or, looked at another way, it’s half a billion dollars total, which if not spent available for other needs, kinda could kill somebody. Isn’t math fun?

Milwaukee paper wants you to know how urgent Bucks owners are for arena, whether they are or not

Milwaukee Journal-Sentinel where-will-we-put-the-new-Bucks-arena correspondent Don Walker has another update for us, people!

Bucks owners hope to pick site for new arena by year’s end

So, that’s kind of news. Also kind of familiar. Didn’t Walker just write this article?

Local leaders say arena plans must be in place by new year

Oh, okay, before it was the local chamber of commerce head saying he wanted arena plans finalized by the end of the year. Now it’s the Bucks owners saying the same thing. What did they actually say, anyway?

Asked about a timetable, Edens said, “as soon as possible. But that doesn’t mean tomorrow. The reality is a decision like this is a critical one. We would hope to be in the position of having a site by the end of the year. … But it’s not entirely in our control.”

That’s … not actually a timetable, is it? Good thing Edens stuck in an actual date somewhere in his comments, so that the Journal-Sentinel had something to hang a headline on. I’d assumed that Walker’s constant harping on an arena site was because he was too willing to reprint anything that people in positions of power told him, but maybe I’m not giving him enough credit — maybe he’s actually trying to get an arena deal done ASAP so that he can finally be released from his purgatory of having to write the same article over and over and over again. Where’s Heracles when you need him?

Milwaukee paper now just writing about every possible place Bucks could put an arena

The Buffalo News may be trying to be your news leader in focusing obsessively on where to put the new sports venue that nobody knows how to pay for yet, but Don Walker of the Milwaukee Journal-Sentinel isn’t going to take that lying down. Walker’s gone this route before, but today he doubles down on head-down where-will-it-go reporting, with the headline:

Is UW-Milwaukee Panther Arena a possible new arena site?

Well, that sounds like news, anyway? What’s the answer?

Franklyn Gimbel of the Wisconsin Center District says he has been assured by someone at City Hall that a new arena in Milwaukee will not be built on land now occupied by the 64-year-old UW-Milwaukee Panther Arena…

But Mayor Tom Barrett says that’s not true. Every potential site downtown is still on the table, he says.

So either “no” or “yes, the same as every other site in Milwaukee,” depending on who you believe. This could be a great way for Walker to fill column inches (or screens, I guess, since this is a web article): All he needs is a map of Milwaukee and a dart, and he can keep writing this same column for years.

Milwaukee paper: Bucks will leave town without new arena, according to someone we won’t tell you who it is

The inimitable Don Walker had an article in the Milwaukee Journal-Sentinel over the weekend that is ostensibly about how if the Bucks don’t have a new arena in place by October 2017, the NBA can buy back the team and move it elsewhere. We’ve known about that buyback clause since April, though — Walker’s story moves up the deadline by a month, but in the grand scheme of things, that’s insignificant.

No, the real news here is the introduction of one of the first new sports venue strategies in the last 20 years: the ghost threat.

Some quick backstory: Sports team owners go into stadium and arena battles with a quandary, which is that their best leverage is to threaten that the team will move without subsidies for a new building, but at the same time outright threatening to move the team is not the best way to win friends among the politicians and voters who you’re asking for money. One way around this is to proclaim something along the lines of, “The last thing we want is for this team to leave town.” (In the book Field of Schemes, we dubbed this the non-threat threat, though if we’d had hotlinks available we might have gone with the paratrooper gambit.) Another is to have league officials make the threat on your behalf, because that’s what league officials are for.

Walker’s story, though, breaks new ground by having the threat levied not by a mock-hesitant owner or the NBA commissioner, but by someone who won’t even give their name:

“The date is in the provision as part of the sale agreement,” [a source familiar with the Bucks lease deal] said. “It’s written as such. When you get to the point where (a new arena) is not going to happen, (moving) will have to be discussed at that point.”

There is no shortage of cities waiting to become one of 30 with an NBA franchise: Las Vegas, Kansas City, Louisville and Seattle have been mentioned as suitors, even new markets in Canada. And there seems to be no shortage of wealthy people willing to secure a franchise; Steve Ballmer paid $2 billion for the Los Angeles Clippers.

“[Bucks owners] Marc [Lasry] and Wes [Edens] have no intention of moving the team whatsoever,” said the source. “But they understand that a new arena is a significant necessity for the ongoing success of the franchise, which is to have a state-of-the-art facility that rivals their counterparts.”

This is precisely the kind of use of unnamed sources — to allow the source to put across his or her message in the media without actually having to be accountable for it — that has led to widespread criticism of the overuse of anonymity in the U.S. media. In fact, Walker’s article arguably violates the Journal-Sentinel’s own ethics policy, which states:

Except in unusual circumstances, we should allow anonymity only when the source has a legitimate fear of suffering harm or reprisals if identified. We should not allow anonymous sources to make personal attacks; criticisms of character should be stated on the record. We will characterize anonymous sources as completely as possible so that readers can make judgments about their authority, expertise or bias.

Clearly someone putting forth the NBA company line doesn’t have a “legitimate fear” of reprisal if it’s a league source, though “unusual circumstances” is a pretty big loophole. Likewise, saying “a source close to the deal” isn’t much of a complete characterization, since there’s no way for readers to tell whether this is someone with the Bucks, the league, the city of Milwaukee, or what.

Walker’s article, sadly, isn’t that unusual — the use of unnamed sources is widespread, even in places where it’s not necessary. But allowing an unnamed source to levy a move threat, without having to put on the record who’s making the threat, is new to the sports venue game.

Meanwhile, neither Walker nor anyone else in the Milwaukee media has investigated the question that’s been hanging out there since spring: Did Lasry and Edens (and former Bucks owner Herb Kohl) conspire with the NBA to insert that buyback clause into the lease, to give them better leverage in gaining subsidies for a new arena? It would take more actual investigation than making a phone call and saying, “Sure, I’ll print what you say without putting your name in the paper,” but it’s kind of what we have newspapers for, you know?

Milwaukee business leader wants Bucks arena plan by January, or he’ll hold his breath and turn purple

If there were an award for the most slavishly stenographic sports stadium journalism, we might just have to retire it in the name of the Milwaukee Journal-Sentinel’s Don Walker, who has never seen a press statement by a Bucks exec or elected official that he didn’t want to rush into print. Yesterday it was Milwaukee chamber of commerce president Timothy Sheehy, who noted that the 2015 Wisconsin legislative session starts in January, so he wants to have an arena plan ready to go in January, even though there’s a gubernatorial election in November and all state-level arena talks are on hold until then. This could have led to a headline along the lines of “Tight timetable for arena talks before 2015 session,” but instead they went with “Local leaders say arena plans must be in place by new year,” because the Journal-Sentinel.

Let’s move along, then, to the one piece of almost-news in Walker’s article, which is that Sheehy is considering proposing diverting income taxes paid by NBA players to pay off arena bonds. Sheehy says about $90 million in total costs could be funded with $6-8 million a year in tax proceeds; the math on that is correct, anyway. Whether NBA players really generate that much in income taxes is more doubtful: The Bucks’ salary cap is currently $56 million, the top state income tax is 7.65%, which gets us to about $4.3 million a year. (Yes, visiting players would pay the tax as well, but Bucks players could also deduct their out-of-state income taxes.) But NBA salaries will go up, so … maybe.

The bigger leap is Sheehy’s conclusion that “if there is no NBA play here in 2018, there’s an assortment of revenue that flows to the state that will no longer be there.” Even if one assumes that the Bucks will leave in 2018 without a new arena (possible, but hardly a sure bet), Bucks fans won’t go with them, and will still need to do something with their winter evenings other than watching terrible basketball. Those other things could include just about anything, but with a couple of obvious exceptions, they’ll all put income in somebody’s pockets that will be subject to income tax. So all that “new” money thanks to the Bucks isn’t actually new — some of it is just Milwaukee entertainment spending that happens to be going to basketball.

In any case, it looks like we can see where the Bucks’ (or at least Sheehy’s) strategy is going here: Piece together $200 million or maybe it’s $300 million who can say in private money, $90 million in player income taxes, maybe another $100 million in sales taxes on spending at the arena (likewise much of which would be cannibalized from other in-state spending), and voilà, you have half a billion-ish dollars and nobody’s really spending any public money, because public money that is rebates on your sales and income taxes doesn’t really count as public money, because it just doesn’t, okay? Now if the Bucks (and Sheehy, and Walker) can only convince the governor, whoever that may be, of this in the few weeks between the election and the start of the legislative session, they should be sitting pretty. At least for the 25 years it takes until they want another new arena.

Bucks minority owner says arena funding gap could be just $200-250m

It must be “sports owners get in the newspaper by speculating wildly day today.” (All together now: That’s every day!) Ted Kellner, a minority owner of the Milwaukee Bucks, says that there could be more private money available for a new arena than just the $200 million pledged by the team’s current and former owners:

“Collectively, there will be $250 million to $300 million of support, especially when you add in naming rights and suites,” Kellner said.

Naming rights isn’t technically “private” money so much as venue revenues, which should be considered just as much a public contribution as a private one, if the public is putting up around half the money. But okay, so the real news here is that the Bucks are (according to one of their minority owners, anyway), willing to kick in some of the proceeds of operating a new arena, which when added to possible new investors, could reach another $50-100 million.

That would still leave a funding gap of at least $200 million, and we have no idea what other goodies the Bucks might demand as part of the deal. (Free land? Tax breaks? Proper gentlemen don’t speak of such things on the first date.) But at least it’d be potentially more than their previous offer of “$200 million, and you figure out the rest,” so … positive-ish sign, maybe.

Bucks owners want arena site by December, arena funding plan by, enh, whenever

It’s official: The owners of the Milwaukee Bucks want to decide where to build an arena first, then figure out how to pay for it later:

“They have a very tight timetable,” [Alderman Bob] Bauman said. “They want to have a site identified in three or four months. Then they want to do the engineering and design. Then they will focus on the financials.”

This sort of makes a kind of sense, in that the final cost of any arena is going to depend on where it’s built, how much infrastructure is needed, etc. Though given that cost estimates are already in the $400-500 million range, and the team’s owners have only pledged $200 million toward construction, there’s going to be a huge funding gap to address regardless, so it’s a bit silly to put that off until last.

Except, of course, that picking a site first has a strategic benefit to the team’s owners as well, which is that it makes the arena’s construction and location seem a done deal, with the only thing left to decide being how to pay for it. Even if, say, nearly two-thirds of the local populace wants nothing to do with funding one.

You’d think “What level of public funding would actually be worth it to taxpayers?” or even “How much public money would local residents be willing to contribute?” would be more interesting articles than “How fast do the Bucks’ owners want to get this done, and how high should we jump?” But that’s just not Don Walker’s style.

Milwaukee paper still fixated on where to build Bucks arena no one knows how to pay for

Oh, Milwaukee Journal-Sentinel sportswriter Don Walker, what have you written now about the Bucks arena debate?

Stakeholders involved in the discussion of whether to build a new arena are in general agreement the building should be downtown.

In related news, the task force on whether we can afford a new car is in agreement that it should be red.

Latest Bucks idea: Fund arena by redirecting income and sales tax — wait, isn’t this where we came in?

Clearly the Milwaukee Bucks arena campaign, facing both popular and legislative opposition, has hit the throwing-stuff-at-the-wall-to-see-what-sticks phase. Today’s projectile of choice: the “jock tax”!

[Wisconsin Gov. Scott] Walker, in a Friday interview with the Business Journal, said his staff is studying the possibility of tapping income taxes from NBA players and other tax revenue directly generated by Milwaukee Bucks games to possibly pay for a new arena. The income tax already is paid by Bucks players for games in Milwaukee and visiting team players.

The Milwaukee Business Journal’s Rich Kirchen — yes, that Rich Kirchen — goes on to report that state income taxes on NBA players in Milwaukee currently raises between $8 and 10 million per year. The average NBA team spends about $70 million on player payroll, and the top Wisconsin tax rate is 7.65%, so that … makes no sense, actually? The state can tax visiting teams as well, but then Bucks players can also deduct other states’ jock taxes from their Wisconsin tax bill, so this seems a bit optimistic to me.

And regardless, this is revenue that Wisconsin is currently collecting, so it’s hardly free money. (Yes, it’s money that the state won’t collect if the Bucks move elsewhere, but then sports fans would just spend their entertainment dollars on something else, and employees of that something else would make more money and pay more income taxes, and so on, and so on.) So it’s really just a way of totaling up all the money that the state could credit to the Bucks, then rebating them by writing them a check equal to that amount. Except the players would still be paying the taxes, while the team owners would be getting the check. Nice work if you can get it.

And this would only be enough to raise perhaps $100 million, and the Bucks arena is still $250 million shy of the funding needed to build it. So the rest would be filled in, perhaps, by sales taxes paid at the arena — and suddenly we’re back to the “super TIF” proposed by Sheehy back in April, but which Kirchen is apparently pouring into new bottles and hoping no one notices.

Which brings us to this, at the very end of the article:

The advantage of earmarking for debt payments NBA-player income tax and sales tax from Bucks home games is that the proceeds likely will increase in future years, [Milwaukee chamber of commerce president Tim] Sheehy said. NBA salaries continue to increase and, assuming the Bucks on-court record and attendance improve, sales tax on merchandise, concessions and ticket sales also should increase, he said.

Or, looked at another way, the amount of future revenues that the state would be handing over to the Bucks owners would go on rising inexorably year after year. Damn, sorry about that — I must have missed my shipment of Milwaukee Business Journal rose-colored reading glasses.