New Arena Article

[Gato78]

http://www.jsonline.com/news/milwaukee/arena-construction--not-just-plans--linked-to-bucks-lease-b99346176z1-274230051.html?ipad=y

I just don't think this is going to happen. There is no way the State Legislature will approve a new tax and it is unaffordable for the County and/or City to go it alone. I am not surprised by the substance of the article or the NBA's psotion regarding the Bucks franchise. You might think the BC is just fine but it is soon to be the oldest and smallest arena in the NBA.

[MU88]

I don't think its an issue. It will happen. The debate is how many hands will feed at the public trough. Do the math, you have $200 million from current and former ownership. If you go by what Ottawa and Sacramento received for naming rights, you have debt service on another $75 million or so. A facility fee of $4 per ticket, a reasonable number, translates to over $4 million a year, maybe close to $5 million with added Bucks and event tickets sold (BC had around 1.1 million pass through its turnstyles). That, in turn, also translates into around another $75 million in debt service. So, with no public funds, we are at $350 million, for roughly $400 million building. City, of course, will donate the site and site preparations. Now, you are talking a public financing packing probably in the $35 million range, if we we just talking about an arena. The problem is, they city and public interest groups want cash for the zoo, a new PAC, park upkeep, etc. That is what the holdup will be. Money for the arena? We are almost there. Money to placate the free spending public officials? We still have a ways to go.

[Alan Bykowski, "brewcity77"]

I really think including an updated convention center should be part of the package. It will help draw events to Milwaukee and reinvigorate downtown. It might help with funding as well if the political side can see added public use benefits.

[TedBaxter]

I still favor the site north of the Bradley Center and it's close enough to Wisconsin Avenue and the convention center.

[mufan2003]

I still favor the site north of the Bradley Center and it's close enough to Wisconsin Avenue and the convention center.

Agree with this proposed location. Miller Park is state-of-the art and has provided a great social outing for those that do not even like baseball. A new state-of-the-art basketball venue in Milwaukee will do the same and keep Milwaukee headed in the right direction as a growing, vibrant city with things to do. Have to get it done.

[TedBaxter]

I really think including an updated convention center should be part of the package. It will help draw events to Milwaukee and reinvigorate downtown. It might help with funding as well if the political side can see added public use benefits.

One thing that they could do to tie the convention center together with the new arena is to continue the skywalk/skybridge that currently connects the convention center and the Hyatt and eventually to the new arena.

Run the skywalk west along Kilbourn and then cross Kilbourn going between the MECCA and the Milwaukee Theatre. There's a one story connector between the two that the skywalk would go over. The skywalk could continue over State Street diagonally so it would skirt the southwest side of the Bradley Center. It would then continue between the MATC parking ramp and the west side of the Bradley Center until it ultimately gets to the new arena. So basically, parking ramps, hotels, the convention center, the MECCA, Milwaukee Theatre, Bradley Center, MATC and the new arena could all be connected with a glass connector that could be used at times of inclement weather and it would all be accessible. This way you could link the arena project in with any improvements with the convention center.

[The Reptile]

http://www.jsonline.com/news/milwaukee/arena-construction--not-just-plans--linked-to-bucks-lease-b99346176z1-274230051.html?ipad=y

I just don't think this is going to happen. There is no way the State Legislature will approve a new tax and it is unaffordable for the County and/or City to go it alone. I am not surprised by the substance of the article or the NBA's psotion regarding the Bucks franchise. You might think the BC is just fine but it is soon to be the oldest and smallest arena in the NBA.

It's always going to be newer and larger than Madison Square Garden. Also, the new arena in Brooklyn is not all that big - 17,700 for basketball even if it is new. Somehow, I think the NBA's objections are glamour not are a size. Let's face it, Milwaukee is not sexy to the players, that is until the rap scene improves.

[BLT]

Barrett wants it on Wisconsin Ave. so then he doesn't have to pay for the utilities relo for his light rail plan which he just lost a ruling on. He wants to go east on new entertainment development, not north.

[Goose85]

If the state legislature would agree to take the money the state will need to kick into the BC over the next 10 to 15 years to fix issues and maintain the facility, and put that toward the new Arena ( assuming the state will tear down the BC), then the financing gets pretty close. I think within the last few years the state has put in over $10 million on the BC.

[MKE_GoldenEagleFan]

Let's put it this way, I don't know exactly how, but they will somehow figure out how to get a new arena done, it will just take lots of posturing and threats before they come up with a solution in the 11th hour.

[TedBaxter]

Barrett wants it on Wisconsin Ave. so then he doesn't have to pay for the utilities relo for his light rail plan which he just lost a ruling on. He wants to go east on new entertainment development, not north.

And where on Wisconsin Avenue will it fit? Seriously, where will it go? Utilitity relocation could be a nightmare anywhere on Wisconsin Avenue and just purchasing property and construction costs could push this project well over $600 million if that was the location and that doesn't even take into account parking options.

The north location is easily the cheapest and most logical spot, but as we all know in politics, cheapest and most logical can be thrown out the window.

[Nukem2]

And where on Wisconsin Avenue will it fit? Seriously, where will it go? Utilitity relocation could be a nightmare anywhere on Wisconsin Avenue and just purchasing property and construction costs could push this project well over $600 million if that was the location and that doesn't even take into account parking options.

The north location is easily the cheapest and most logical spot, but as we all know in politics, cheapest and most logical can be thrown out the window.

I would concur. Of coourse, Barrett is the guy championing the Streetcar to Nowhere at a ridiculous cost for a scant few users.

[Halo]

And where on Wisconsin Avenue will it fit? Seriously, where will it go? Utilitity relocation could be a nightmare anywhere on Wisconsin Avenue and just purchasing property and construction costs could push this project well over $600 million if that was the location and that doesn't even take into account parking options.

The north location is easily the cheapest and most logical spot, but as we all know in politics, cheapest and most logical can be thrown out the window.

I thought I heard somewhere they floated out there tearing down Grand Ave Mall and putting it in that location? Would solve two problems for the city.

Not saying that is where it should go, but maybe that is what Barrett is thinking.

Regardless, this will get done. The local investors won't let it slip away.

[Goose85]

And where on Wisconsin Avenue will it fit? Seriously, where will it go? Utilitity relocation could be a nightmare anywhere on Wisconsin Avenue and just purchasing property and construction costs could push this project well over $600 million if that was the location and that doesn't even take into account parking options.

The north location is easily the cheapest and most logical spot, but as we all know in politics, cheapest and most logical can be thrown out the window.

The northern location would have probably been the spot had Kohls decided to move to that area.

Michigan Ave has a lot of options, which is likely where parking would be.
There is some open spots on Wisc Ave depending one how far up you would want to go, but for a new basketball facility why not get rid of most if not all of grand ave? Doesn't the city own that? Between part of the mall and all the parking, etc behind it there may be enough space there, and it would also tie in with the convention center.

[Nukem2]

Irrespective of location, this really needs to get done to promote economic growth in Milwaukee. As Tulsa Warrior points out in a post on another board, there has been no public financing of a sports venue in Milwaukee since the early 1950s given that the BC was a gift from the Bradley family. With the $200 million from Kohl and the new owners along with naming rights and ticket fees and other private investment from the new part owners, the City is really looking at a true gift in terms of re-vitalizing the City's economy.

[TheSultan]

Let's not get into that again. The economic benefits of sports arenas are at best mixed with most studies showing that they are negligible. IMO Milwaukee's economic future will look pretty much the same regardless if a new arena is built.

[Goose85]

The local 0.1% sales tax for Miller Park still irritates people. I think many people hear that they are taxed for a stadium and don't think of the positives or the relatively small amount they are paying. That is $1 for a $1,000 purchase. Yet I'd guess many didn't realize the state gave the BC $5 mil (the second $5 mil contribution in past few years), which amounts to close to $1 for ever resident of Wisconsin.

The state of Wisconsin gives tax breaks to corporations to move or expand operations all the time. Well if the normal course of business is to give tax breaks to corporations, why not here?

If taxpayers are ok with the Bucks and Brewers moving on as opposed to puting up public funds, then I'm sure they would be willing to forego the tax proceeds these businesses generate.

Have the state put of a $100 million bond for the stadium, and add to it whatever is due on Miller Park. Retire the sales tax (which would be a positive), and put all tax proceeds from the Brewers, Bucks and jock related taxes (player taxes) toward paying down the debt.

[Nukem2]

Let's not get into that again. The economic benefits of sports arenas are at best mixed with most studies showing that they are negligible. IMO Milwaukee's economic future will look pretty much the same regardless if a new arena is built.Need to look at the flip side of the coin for the city. Without attractions the City loses "destination" status and the downtown area continues to denigrate. It can't just be a sports facility. Needs to have connectivity to the convention center, etc. The economic future will denigrate without this as more and more of Downtown just crumbles away. Less and less reason to go there.

[Alan Bykowski, "brewcity77"]

I do think this makes a big difference for the downtown area. I won't go so far as to say it will revitalize the city, but if the Bucks leave, what is there to draw people to that part of the city? Marquette 16-18 times per year? The Admirals? The Museum? If the Bucks go, the BC isn't going to get the support it does now financially. It's a fine arena for our purposes, but when we are the chief tenant that could very well change. There will be less bar traffic as the lack of major sports will push people towards Water and Brady. Grand Avenue is already a second-tier mall at best. Take away the Bucks and I could easily see that area of the city withering. It's not exactly far from some of the higher crime areas of the city and there are no geographical boundaries.

What the Bucks do will only really affect the downtown part of the city, but they could make a very big difference. Give us a new arena that is able to draw not only sports fans but also concerts and conventions and there will be reasons to go downtown. New restaurants, shopping, and bars all tied into the arena will further enhance that. And having both District 1 and the Milwaukee Fire Department HQ within a block of each other on James Lovell gives the appearance of safety and security, even though what will really keep things safe would be a present public (Does anyone feel safe on MLK & Locust or 36th and Fond du Lac, where MPD also has District stations?).

With the passage of anti-residency legislation, the city has a huge fear of a "white flight", though the true fear is losing not just middle-class white city workers but losing their city workers in general (I know people of all different races ready to move out). The arena may be a small part of the equation, but it's an important one to give people a reason to be downtown. I think it would be a positive for that area, but even if it was a break-even, that would be better than what we would see if the Bucks left, which would be a minimum of 41 fewer reasons for people to spend their money downtown.

[Goose85]

Let's not get into that again. The economic benefits of sports arenas are at best mixed with most studies showing that they are negligible. IMO Milwaukee's economic future will look pretty much the same regardless if a new arena is built.

There are many things that go into the benefits of having pro sports teams, just like the benefits for MU having a basketball team.

Would the education level of MU change if we did not have a D1 team? Probably negligible. Would we see a drop in student population? Maybe a little, or at least the number of applications. Would MU get national exposure without hoops, probably not. So is MU still MU without a basketball team - no way in my opinion. Similar with cities and their pro sports teams.

Now, if the Bucks were to leave, and 5 years later the state decided maintaining the BC is more cost than it is worth and decided to remove it, what would happen to MU? Go back to playing at the arena?

[TedBaxter]

Someone mentioned a new arena at the Grand Avenue site. Well, if I use finger measurements on Google maps and try to put the Bradley Center between Wisconsin and Michigan Avenue's and even in the east west direction, it won't fit and that doesn't include drives, sidewalks, etc..

[KMWTRUCKS]

I also thought I read that the NBA has the option to buy back the team if a new arena does not happen. IE if the Bucks get moved the NBA wants to control and profit from the move. This was a smart part of the deal for KOHL and the NBA. So the New owners have a huge interest in getting a new stadium done. My guess is they end up kicking in 200 million plus 100 Million from kohl. I think the Clipper sale cemented that we get a new stadium. Do you think the new owners would let the NBA buy them back at 550 million when another franchise sold for 2 billion over 100 million or so in stadium money?

[Gato78]

NBA won't buy back the team. That would likely be a taxable event. I am sure they would allow the current owners to remain in place and use the buy-back option as a way to direct where the franchise is to be relocated. BTW, Edens and Lasry may well have good intentions but at the end of the day they are tough businessmen. The firing of Larry Drew and hiring of Jason Kidd is Exhibit A. I do not trust the politicians to get this right. The politicians actually looked Lloyd and Jane's gift horse in the mouth. It was infuriating how the politicians, at that time, tried to impact the decision making for a free arena. Now, with the anti-tax sentiment enveloping Madison, I am not optimistic. I really hope I am proven wrong.

[Goose85]

NBA won't buy back the team. That would likely be a taxable event. I am sure they would allow the current owners to remain in place and use the buy-back option as a way to direct where the franchise is to be relocated. BTW, Edens and Lasry may well have good intentions but at the end of the day they are tough businessmen. The firing of Larry Drew and hiring of Jason Kidd is Exhibit A. I do not trust the politicians to get this right. The politicians actually looked Lloyd and Jane's gift horse in the mouth. It was infuriating how the politicians, at that time, tried to impact the decision making for a free arena. Now, with the anti-tax sentiment enveloping Madison, I am not optimistic. I really hope I am proven wrong.

I do know one avenue to obtain public funding that has been discussed, and the one that may gain footing and actually get this thing done, is a type of jock tax. I'd like to see that extended to the Brewers as well to take the place of the .1% sales tax.

This type of tax should be attractive to the state residents that don't care if we have the Bucks too. If the Bucks leave so does that tax income so why should they care if that tax goes to pay for the public portion of a new arena?

Basically, the state provides funding, and that funding is paid back with the income tax of the players who play games in Milw (extends to coaches, staff, etc but the big money comes from the athletes). Add in the Brewers, and now you are talking about at least $160 million in taxable income at the highest income rate.

You could also take it a step further to incorporate state sales tax on sales generated by the new arena as well.

I personally think this is how the state / governor explains why tax payer money is being used. It is tax money that won't be here without a new stadium / team, so why would the people against the stadium object?

[KMWTRUCKS]

Buying the team back at 550 million would not be a taxable event, selling it to an owner in what ever city they pick for 750 Million, would be a taxable event to the tune of 200 million in profits to the 30 owners or 6.66 million each. Why would the NBA pass up that money?

[Goose85]

It sounds like there may be another franchise or two for sale, starting with Atlanta.

[Gato78]

It would be taxable if the NBA bought the franchise back at market--which they would have to do. That "market" has a team purchased for $2 billion, just recently. I am not saying the Bucks are worth $2 billion but Lasry and Edens would turn a nice profit based on the Clippers sale alone dragging up the value of franchises. There would also be some issues with franchise laws if there was a "taking" by the NBA at less than market value.


Buying the team back at 550 million would not be a taxable event, selling it to an owner in what ever city they pick for 750 Million, would be a taxable event to the tune of 200 million in profits to the 30 owners or 6.66 million each. Why would the NBA pass up that money?

[KMWTRUCKS]

My understanding is the buy it back at cost if a new arena is not
Approved in the next 3 years so the new owners have a huge $$ interest to get
The new stadium done. That is why I said they would kick in more then 100 million.

[Gato78]

I do not have any information on this, pure speculation. What if the $100 million pledged by Edens and Lasry is actually money that has to be paid to Kohl if it does not go the the arena? It would be deductible to Edens and Lasry if paid to the new arena so it is some incentive to have the $100 million contribution vs additional purchase price. Otherwise it is payable to Herb. I have tried to figure out why they would make the offer up front rather than let the politicians and Herb thrash it out. They could have made the same offer to push it over the top with the legislature later possibly without having to pay anything. Why are they "invested" in Milwaukee, a place they had seldom visited? Is it a $100million goodwill gesture? I have not been able to answer that unless Herb gave them the incentive to do it. Herb is invested in Milwaukee. BTW, the arena, if it is built, should be named after The Senator, somehow.

[dw3dw3dw3]

http://www.jsonline.com/blogs/sports/274544211.html

Lovell speaks:

"Is Marquette prepared to make a financial commitment toward a new arena?

Said Lovell: "We are more than willing to do that once we know and understand the finances. We don't know the profit and loss. One of the things that we struggle with at the Bradley Center is we just get gate revenue. We don't get parking and concessions."
"I don't want to overcommit the university if there are not revenue streams coming back."
"

[MU88]

I do know one avenue to obtain public funding that has been discussed, and the one that may gain footing and actually get this thing done, is a type of jock tax. I'd like to see that extended to the Brewers as well to take the place of the .1% sales tax.

This type of tax should be attractive to the state residents that don't care if we have the Bucks too. If the Bucks leave so does that tax income so why should they care if that tax goes to pay for the public portion of a new arena?

Basically, the state provides funding, and that funding is paid back with the income tax of the players who play games in Milw (extends to coaches, staff, etc but the big money comes from the athletes). Add in the Brewers, and now you are talking about at least $160 million in taxable income at the highest income rate.

You could also take it a step further to incorporate state sales tax on sales generated by the new arena as well.

I personally think this is how the state / governor explains why tax payer money is being used. It is tax money that won't be here without a new stadium / team, so why would the people against the stadium object?

I assume your are saying that athletes will earn $160 million in the state of Wisconsin. That is possible, but is probably a stretch. Brewers and Bucks combined payroll is probably closer to $130 million. There are also issues about where the taxes are due, Wisconsin or where you earn the money, but let's ignore this for the sake of argument. But, using the $160 taxable figure, that leaves around $150 million taxed at 7.65%, assuming no deductions (which, of course you would have for e.g. federal income taxes paid), giving you a revenue stream of roughly $11 million or debt service on $200 million. However, probably $7 million of the stream comes from the Brewers, which would be taken off the regular income tax income of the State. This would cause a huge fight in Madison. I think the best you can hope for is around a $1.75 million revenue stream. Now, this will provide debt service on $30+ million. Not a huge amount of money, but maybe enough with the ownership contributions, naming rights, and a possible facility fee on each ticket.

As I said before, I don't think paying for the Arena is that big of an issue. Very little tax dollars will be needed. $200 million from ownership, $75 million debt service from naming rights (roughly the same as Ottawa and Sacramento) and let's say $75 million debt service from a facility fee ($4 per ticket). Its the side projects everyone wants tack onto this project that will be the biggest obstacle to the Arena. People want to tie this project to an expanded convention center, a new PAC, updates at the zoo, park maintenance, etc. etc. etc.

BTW, the buyback is at cost plus $50 million. Its a fixed price, already negotiated. The Clippers sale has no bearing on the buyback. So, ownership would have a $50 million capital gain if the team is sold back to the league. The leagues taxable event would be upon the sale of the franchise to a third party.

[IWB]

This year the Brewers salaries total $107 million (not including coaches).
This year the Bucks salaries are listed at over $51 million. (not including coaches)

Total - $158 million

Add Packers to it and that is an additional $133 million.

[pbiflyer]

This year the Brewers salaries total $107 million (not including coaches).
This year the Bucks salaries are listed at over $51 million. (not including coaches)

Total - $158 million

Add Packers to it and that is an additional $133 million.

Don't they only get taxed for home games? Don't visiting players get taxed for games played in Wisconsin?

[MU88]

This year the Brewers salaries total $107 million (not including coaches).
This year the Bucks salaries are listed at over $51 million. (not including coaches)

Total - $158 million

Add Packers to it and that is an additional $133 million.

Even so, taxable income, assuming all Brewers and Bucks income is taxable in Wisconsin, is around $100 million. You have to deduct federal income taxes of the top because you don't pay tax on monies paid to the feds as tax (let's use 35 % because $18 million is going to be taxed at less than the 39.6 highest bracket). So, you are down to just over a $100 million in taxable income, which will translate to around $7 million (again, only a portion is taxed at the 7.65 rate), of which only 1/3 can be attributed to the Bucks. So, the State earns $2.3 in taxes from the Bucks, maybe. Trade the garbage on the team (Sanders and Mayo) which will happen if at all possible and you are down to well under $2 million.

Taking the income from the Packers or Brewers taxes to pay for the Bucks stadium will not fly. No way.

[Litehouse]

Don't they only get taxed for home games? Don't visiting players get taxed for games played in Wisconsin?

Yes, but WI probably comes out a little ahead when that's factored in because of the Bucks.
The Bucks are near the bottom of the NBA in payroll so WI comes out ahead on taxes with higher paid visiting teams.
http://www.spotrac.com/cap-tracker/nba/2014/

The Brewers are about average for MLB payrolls, so it's probably a wash.
http://www.spotrac.com/cap-tracker/mlb/

NFL teams are all pretty close with their salary cap, so it's probably a wash for the Packers too.
http://www.spotrac.com/cap-tracker/nfl/

[Goose85]

One thing to note with respect to the jock tax. It assumes that with no stadium no Bucks, so it would include all sales tax related to the stadium events and the Bucks. Never looked, but I would Bucks tickets carry a sales tax?