Brewers’ state-of-the-art clause could require $87m+ in fresh taxpayer subsidies

I wrote here 10 days ago:

The owners of the Milwaukee Brewers have commissioned a study of their stadium “needs” through 2040, even though their lease only runs through 2030. … Nobody seems to be suggesting that the public stadium district just inform the Brewers that if they want a new lease after 2030, they’ll have to pay for their own damn stadium upgrades, whoops, looks like I just did!

One thing I neglected to do at the time was to check on the Brewers’ lease — as the article I was citing also failed to do — to see what it says about future upgrade costs. And as it turns out, the Milwaukee Journal Sentinel reports, the team’s original stadium deal contains a state-of-the-art clause (termed a “keeping up with the Joneses” clause by the Journal Sentinel) that requires Wisconsin’s stadium district to pay for any improvements that “can reasonably be said to fall within the ‘top’ twenty-five percent (25%) of all such facilities, when such facilities are ranked or rated according to the quality with which they are repaired and improved.”

This kind of clause was all the rage in the late ’90s, and is best remembered for the Cincinnati Bengals‘ clause requiring the public to install holographic replay systems, if they’re ever invented. A similar clause ended up allowing the St. Louis Rams to break their lease and move to Los Angeles, after a ruling that the city would have to spend $700 million on stadium upgrades to keep the then 18-year-old stadium “first class”; and the Tennessee Titans owners are currently seeking $300 million in public cash on the basis of a similar clause.

The Brewers owners’ ask is still being calculated: A March 2019 study by a team-hired construction firm identified $71.7 million in expenses over the next 20 years, but Brewers president of business operations Rick Schlesinger has said that the total cost could be more than the $87 million remaining in the public stadium district’s reserve fund. And while 2039 is past the time that the Brewers’ lease expires in 2030, the team has a 10-year lease extension option in its pocket — so rather than having to negotiate for fresh subsidies in exchange for extending their lease, the team owners can just re-up for a decade and say, “Keep the taxpayer checks flowing, please.”

The lesson, as always: If you are a public official working on a stadium deal, do not sign state-of-the-art clauses, they are a recipe for having to throw good money after bad. You have to wonder why Wisconsin officials agreed to this deal in the first place — though given that the deal was struck at 5 a.m. when Gov. Tommy Thompson personally arm-twisted a state senator into changing his vote, maybe you don’t have to wonder all that hard.