Today’s Milwaukee Bucks arena scuttlebutt news roundup:
- The city of Milwaukee’s $47 million share of the arena cost is really $55 million, thanks to an additional $8 million that the Bucks would loan to the city, then get reimbursed for with kickbacks of property taxes on commercial development near the arena. So revise your total arena cost scorecard from $320-million-plus to $328-million-plus.
- Milwaukee county supervisors are not at all happy that they only just got their first briefing on the arena plan yesterday, after weeks of closed-door negotiations by county executive Chris Abele.
- The state of Wisconsin says it can get hold of that $4 million in uncollected county debts (mostly property taxes) by using bank levies and wage garnishments. Milwaukee county supervisor John Weishan calls this building an arena on the backs of the poor. Also, no word on why, if this is such an easy thing, the state is only offering to help collect this money now that it would go to the Bucks owners, not the regular county budget.
- Economist Victor Matheson tells Huffington Post sports reporter Travis Waldron (formerly of ThinkProgress — when did that happen?) that Gov. Scott Walker’s bogus claims of economic benefits from a Bucks arena are bogus: “[Walker’s projections] are predicated on the idea that no other real estate could occur there, and it’s not entirely clear why that should be the case. Just because the NBA isn’t there doesn’t mean you can’t redevelop apartments or commercial space. Cities have been developing for centuries without NBA teams.”
TL;DR version: Lots of people in and out of government are really not happy with this deal, but it’s still too soon to say how this will translate into actual votes. And there’s still no decision even on whether the arena will be voted on as part of the state budget, or separately. What do you want to bet this all gets decided in some flurry of horse-trading in a single afternoon? My money’s on Friday, July 3, after which everyone can forget what they did in an orgy of barbecue.
OBVIOUSLY, Milwaukee can not afford to build a new arena without creative taxation on the general public
Small problem on using these collections for the arena. SInce a good deal of these are child support, property damage, etc., the collections are subject first to reimbursement set-asides for the victims. That is you can’t collect a child support obligation, use it for the stadium, and tell the child’s guardian who waits for the promised support, to “go and enjoy the games”.
Also, there has been talk of setting the 15% collection fee that is put on top of the debt aside for the arena. So that means the state gets to collect the debt for free. Debt collection is not simply a phone call or letter and money appears, it is a time-intensive process. Also, if the state were to place the debt with commercial collectors, the commercial collectors would want 33% of all collections as a fee.
According to the article linked above, the state now thinks it can get $4 million a year just from delinquent property tax payments, without having to muck about with victim set-asides. No indication where they got this projection from, of course.
According to an Urban Milwaukee article by Bruce Murphy, county staff have studied the debt-collection issue and calculated the county may be lucky to net $100,000 a year from such collections. That’s $2 million over 20 years, not $80 million. The elected comptroller took his job seriously and requested this research before the kooky plan was even announced. He knows the county will simply be out up to $4 million a year, depending on how much of the phantom debt is collected.
Also, the extra $8 million in city freebies just reflects the pretzel deal of how much the Bucks will officially front (or get a “credit” for in the deal) for 980-space parking complex. The structure also includes first floor retail; that the city paid $30 million to build it and it’s still in excellent condition. The city reports maintaining it meticulously, and the paid-off facility could easily have another 30 years of income generation–netting at least $500,000 and much more as the area around it grows. (Ultimately the city will return the $8M to the Bucks from TIF collections.) The cost to demo the huge parking structure is not mentioned, and infrastructure costs are being lowballed or disguised. They’re planning to vacate a six-lane north-south thoroughfare, and redirect traffic. It will easily cost more than $12 million allotted, but we may never know the cost.
Accounting tricks is the name of the game for this deal, and the city is gleefully finagling and fudging–just like the county exec and state officials. They all think taxpayers still believe in Santa Claus.