Arena Deal Details Today?

[Goose85]

From the BizJournal article.

"Key players in the arena-funding talks were holding their final meeting Tuesday morning in the governor’s conference room at the state Capitol in Madison, according to an email from the office of state Assembly Speaker Rep. Robin Vos (R-Rochester). The meeting is expected to last about two hours and news could be released after that, said his spokeswoman Kit Beyer."

Should be interesting very soon.

http://www.bizjournals.com/milwaukee/news/2015/05/26/final-milwaukee-arena-funding-meeting-tuesday-deal.html

[mufansince72]

I had heard as of late last week, that Barrett finally caved and agreed to a 100 M TIF district to make up the last 100 million of the project.

[TheSultan]

I had heard as of late last week, that Barrett finally caved and agreed to a 100 M TIF district to make up the last 100 million of the project.


Seriously? Good lord. The owners and the state are basically gifting this to the City, and he had to be talked into a TIF district? Look at the deal the City is getting compared to other cities for new arenas.

[Goose85]

Seriously? Good lord. The owners and the state are basically gifting this to the City, and he had to be talked into a TIF district? Look at the deal the City is getting compared to other cities for new arenas.

Problem with the TIF district is the arena is going to be tax exempt. No property tax coming to Milwaukee from the new arena.
The only way to ensure that a new TIF would have enough property tax revenue to pay for this would be from the other development around the arena.

If there is no new development for 5 or even 10 years, then there are no new property taxes to pay for the borrowed money. What happens then?

Additionally, there would be no TIF available to help to spur development in the area. Could be risky for Milwaukee, if the city is on the hook and there is not $500 mil of additional property tax eligible development around the new facility.

[TheSultan]

Problem with the TIF district is the arena is going to be tax exempt. No property tax coming to Milwaukee from the new arena.
The only way to ensure that a new TIF would have enough property tax revenue to pay for this would be from the other development around the arena.

If there is no new development for 5 or even 10 years, then there are no new property taxes to pay for the borrowed money. What happens then?

Additionally, there would be no TIF available to help to spur development in the area. Could be risky for Milwaukee, if the city is on the hook and there is not $500 mil of additional property tax eligible development around the new facility.


Ahh....forgot about the tax exemption of the new arena. Thanks for clarifying.

[TedBaxter]

Then they would need guarantees from the Bucks owners and the other investors that the developments would be in close timeframe to the arena completion and I'm assuming that's been on the forefront of these talks. Maybe I shouldn't assume?

[mufansince72]

The 500 M arena is supposed to lead to at least another 500 M in taxable development.

[Goose85]

The 500 M arena is supposed to lead to at least another 500 M in taxable development.

I believe the new ownership is genuine in their plans to develop another $500 million, but sometimes other factors can affect initial plans. What if it ends up being $300 million and takes 10 years after the arena to complete?

Over a 5 to 10 year period the economy can change, property values can change, other factors can change. Will there still be demand for more downtown housing, office space, retail space? Will some developers choose to build elsewhere in Milwaukee where they can get TIF advantages instead of around the new arena?

I think the owners were counting on the new arena to help drive the new development, not necessarily spend the $500 million themselves on new developments. Counting on new developments being built and being successful over a long span of time to pay back 20% of the cost of the expected development could be risky.

[mufansince72]

If that moron Barrett can use TIF money to pay for part of his damn trolley project, he should be able to do it for the arena as well. Just my two cents. End of political rant.

[Goose85]

If that moron Barrett can use TIF money to pay for part of his damn trolley project, he should be able to do it for the arena as well. Just my two cents. End of political rant.

Different project. There is currently nothing around the new arena site you can take property taxes from in the form of a TIF. You need property taxes to pay for a TIF.

The BC doesn't pay property taxes so you can't take tax money from the BC. Same with the UWM Arena. The projects a few blocks north, can't imagine anything coming from there. MATC and vacant lots around the proposed new area, not much coming from there.

So basically from the new facility through the convention center there is currently no property tax money being generated to pay for a TIF. A couple bars / restaurants and the JS building and maybe the Moderne are not throwing off enough property tax revenue to cover the payments on a $100 million bond.

So if that is the case and Milwaukee is being asked to pay with a TIF, that could be very risky if there are delays in the developments near the stadium.
Milwaukee is not like the State, Milwaukee can't divert increases in income tax (the jock tax) to pay for a bond. It would have to come from property taxes.

[mufansince72]

Different project. There is currently nothing around the new arena site you can take property taxes from in the form of a TIF. You need property taxes to pay for a TIF.

The BC doesn't pay property taxes so you can't take tax money from the BC. Same with the UWM Arena. The projects a few blocks north, can't imagine anything coming from there. MATC and vacant lots around the proposed new area, not much coming from there.

So basically from the new facility through the convention center there is currently no property tax money being generated to pay for a TIF. A couple bars / restaurants and the JS building and maybe the Moderne are not throwing off enough property tax revenue to cover the payments on a $100 million bond.

So if that is the case and Milwaukee is being asked to pay with a TIF, that could be very risky if there are delays in the developments near the stadium.
Milwaukee is not like the State, Milwaukee can't divert increases in income tax (the jock tax) to pay for a bond. It would have to come from property taxes.

I thought they were going to tear the Bradley Center down and build something there.

[MU/Panther]

They will.

[Goose85]

But who is going to buy the land and when will it be a property tax producing parcel? That is the question, because if you are borrowing money to build the new facility, you have to begin paying that money back.

You can't say we will have to wait to begin paying back that bond on the new facility until the State decides to sell the Bradley Center, someone buys it, tears it down, and builds a hotel or parking garage or office building. That process won't begin until the new stadium is done and ready to start hosting basketball events.

[Halo]

But who is going to buy the land and when will it be a property tax producing parcel? That is the question, because if you are borrowing money to build the new facility, you have to begin paying that money back.

You can't say we will have to wait to begin paying back that bond on the new facility until the State decides to sell the Bradley Center, someone buys it, tears it down, and builds a hotel or parking garage or office building. That process won't begin until the new stadium is done and ready to start hosting basketball events.

Goose-are you Mayor Barrett? Kidding.

Hoping this goes through yet despite his pushback.

[Goose85]

Goose-are you Mayor Barrett? Kidding.

Hoping this goes through yet despite his pushback.

Ha. No, but the TIF thing for this arena project is gambling that there will be new development and quickly and enough to pay back a huge bond. If that development takes longer, then the Milwaukee property tax owners will have to pick up a pretty big tab.

I'm in the camp that thinks the state bonding to be paid for by the increase in jock tax is the best way to go.
The stadium would be paid for by the expected increase in the NBA income, and the income tax paid by Bucks employees. No hit to current state income, no impact to property taxes in Milwaukee, no sales tax like Miller Park, no hit to the pocket book of normal Wisconsin tax payers, and no using current state funds that could go elsewhere to an arena. Basically a stadium paid for by those making a living by using the facility.

That's my two cents, but I'm sure the politicians will have other interests and thoughts.

[TheSultan]

From the BizJournal article.

"Key players in the arena-funding talks were holding their final meeting Tuesday morning in the governor’s conference room at the state Capitol in Madison, according to an email from the office of state Assembly Speaker Rep. Robin Vos (R-Rochester). The meeting is expected to last about two hours and news could be released after that, said his spokeswoman Kit Beyer."

Should be interesting very soon.

http://www.bizjournals.com/milwaukee/news/2015/05/26/final-milwaukee-arena-funding-meeting-tuesday-deal.html


BTW, from what I understand, the meeting only lasted 40 minutes. I interpret that to be a good thing.

[TheSultan]

Here are some of the broad details.

http://www.jsonline.com/news/statepolitics/arena-negotiations-continue-no-deal-imminent-b99508223z1-305192861.html

[TheSultan]

"The state would be responsible for bonds worth more than $55 million.

That figure covers only the amount of the initial bonds, but not interest costs. The state would commit $4 million a year over 20 years, or $80 million total, to cover its shares of principal and interest costs.

The Wisconsin Center District would add $93 million.

The City of Milwaukee would spend $35 million on a new 1,240-vehicle parking structure and provide $12 million in tax incremental financing.

In the most unusual feature of the deal, Milwaukee County would "certify" tens of millions of dollars in uncollected county debt. The county, in effect, would then count on the state to recover at least $4 million of that debt a year for 20 years, a total of $80 million that would then be funneled to the arena project."


Can someone explain the final item?

[Goose85]

"The state would be responsible for bonds worth more than $55 million.

That figure covers only the amount of the initial bonds, but not interest costs. The state would commit $4 million a year over 20 years, or $80 million total, to cover its shares of principal and interest costs.

The Wisconsin Center District would add $93 million.

The City of Milwaukee would spend $35 million on a new 1,240-vehicle parking structure and provide $12 million in tax incremental financing.

In the most unusual feature of the deal, Milwaukee County would "certify" tens of millions of dollars in uncollected county debt. The county, in effect, would then count on the state to recover at least $4 million of that debt a year for 20 years, a total of $80 million that would then be funneled to the arena project."


Can someone explain the final item?

I'm with you on that one Sultan. Not sure how that one works.

I like the expansion of the WCD to become a more encompassing entertainment board. Same level of funding though, so it will be interesting to see what happens there.

I like that there will be more synergy with the Theatre and Performing Arts Center / Arena and new facility. Might eliminate the Arena and BC being played against each other for events.

So the big question I have, who sells the naming rights? Is it the new WCD? I'd think those funds should go a long way to pay for ongoing maintenance and even helping to pay off the $93 million.

[IWB]

The WCD & BC Board should have merged long ago.

So with the WCD in control, I guess that means the state owns the facility and not the Bucks' owners?

[Nukem2]

The WCD & BC Board should have merged long ago.

So with the WCD in control, I guess that means the state owns the facility and not the Bucks' owners?Thought all along that the Bucks would not own the arena. That's why their investment is limited.

[Gato78]

I believe that makes the owners' contributions tax deductible which makes it sting a lot less. If WCD is running things, that means Frank Gimbel is still running the show. I have to think they will revamp that board to weaken Frank's hand.

[Goose85]

I would like to see some numbers on this, but the headlines all read taxpayers paying $250 million.

Yes, but what are the tax payers getting?
So if the payments are over 20 years, what are expected income tax revenues over the next 20 years for the Bucks and their employees? With the expected rise in salary cap, and the expanded staff the Bucks owners now have I'd bet that will be well over $300 million.

What does the future facility expect to generate as far as state sales tax revenue? Current Rate is 5% (arena district may be a bit more).

What is the expected employment numbers associated with the new facility (building and working at the facility)? Thousands
That is it worth to the state to have upwards of $1 billion in investment in a concentrated area of Milwaukee?

People keep complaining the tax payers are getting screwed having to pay for NBA facility. Well, I think if someone runs the numbers, the tax payers are making out pretty good on their investment. And they get a great facility that is sure to bring in quality entertainment for years to come (not just the 41 home games the Bucks play).

[MayorBeluga]

If WCD is running things, that means Frank Gimbel is still running the show. I have to think they will revamp that board to weaken Frank's hand.

And this is huge. Given the toxic mixture of arrogance and incompetence that Gimbel and the board have shown, the board needs to be completely replaced.

[IWB]

I think this is where the loss of Marc Marotta really hurts. To a degree, Marotta was driving the bus on the new project. Many said that he was the one guy that could successfully work with both political parties.

Will members of the WCD board merge with the members of the Bradley Center board? Should be interesting.

[MUfan12]

And this is huge. Given the toxic mixture of arrogance and incompetence that Gimbel and the board have shown, the board needs to be completely replaced.

I don't know if it will be entirely replaced, but I've been told that the plan is to retool the board, and have new leadership. No one wants Gimbel overseeing the new facility.

[Mucrisco]

I don't know if it will be entirely replaced, but I've been told that the plan is to retool the board, and have new leadership. No one wants Gimbel overseeing the new facility.

I nominate Goose85.

[Nukem2]

I don't know if it will be entirely replaced, but I've been told that the plan is to retool the board, and have new leadership. No one wants Gimbel overseeing the new facility.Time to put this old fart out to pasture and get some forward thinking. Given that he graduated from UW in 1958, he is probably 78 or 79 years old.

[Goose85]

I nominate Goose85.

Count me in Crisco. As Bill Murray (Peter Venkman) said in Ghostbusters - No job is too big, no fee is too big.

Anyone would be better than Gimbel. As IWB said, really too bad about Marotta as he would have been a pretty good fit for this position.

This is Milwaukee's chance. This had to be done right and for the right reasons. Need the board to represent the best interests of the city from an entertainment and quality of life standpoint, but also set this up for long term future success. No more throwing crazy money at losing propositions (like the Theatre).

I really hope we get this right as it could be absolutely huge for Milwaukee and the state. Oh, and it should work out pretty well for MU too!

[MU/Panther]

It's funny at one point Gimbel was fighting for his building and now he might be getting more.

[Nukem2]

It's funny at one point Gimbel was fighting for his building and now he might be getting more.Hopefully that is retirement from the board.

[TheSultan]

I think they will let him save face, but that the path to his departure is set. Remember this?

http://www.bizjournals.com/milwaukee/blog/2014/12/frank-gimbel-remains-wisconsin-center.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+bizj_milwaukee+%28Milwaukee+B usiness+Journal%29&utm_content=Google+Feedfetcher

"Frank Gimbel will remain chairman of the Wisconsin Center District, likely until at least June 2015, while the district board reviews its bylaws for nominating board leaders."

[mufan2003]

Time to put this old fart out to pasture and get some forward thinking. Given that he graduated from UW in 1958, he is probably 78 or 79 years old.

Maybe Gimbel and Sep Blatter (FIFA president) could retire together??

[TrevorCandelino]

I see now the city will be building a new 1200 stall parking structure north of new arena, across Juneau.

The street will remain open and there will be no skywalk.

In addition, the parking garage east of the new arena (where bars go to die) may no longer be on the table.

From a design/urban planning perspective, I dont understand these choices if indeed true.

[TrevorCandelino]

http://saveourbucks.com/the-elements-of-the-deal/

[Goose85]

Looks like the Governor will be hosting the announcement today at 3:15 from the state capital.
Should be interesting. Fingers crossed the presentation of the funding deal works out for all to get on board and get this project rolling.


http://www.bizjournals.com/milwaukee/news/2015/06/04/arena-funding-announcement-confirmed-for-thursday.html

[MUMac]

Looks like the Governor will be hosting the announcement today at 3:15 from the state capital.
Should be interesting. Fingers crossed the presentation of the funding deal works out for all to get on board and get this project rolling.


http://www.bizjournals.com/milwaukee/news/2015/06/04/arena-funding-announcement-confirmed-for-thursday.html

I would guess that if the Governor is hosting and announcing, that it is a done deal.

[mufansince72]

I think the gov wants to run for president, and he can't officially announce until the budget deal gets done.

[MUMac]

I think the gov wants to run for president, and he can't officially announce until the budget deal gets done.

I'm hearing that he may not run. Likely looking for a VP spot or Cabinet spot right now.

[Markedman]

@DavidAdeCBS58: @SenFitzgerald's office tells me today's arena announcement is being made with the intention it will be taken up in the budget.

[Halo]

I'm hearing that he may not run. Likely looking for a VP spot or Cabinet spot right now.

Hearing the same that he would be a good fit for the VP role. Heard he is the one candidate that can cross between the Far Right and Tea Party and possibly balance the ticket either way.

[Goose85]

Walker explained why it is cheaper to keep the Bucks and indicated there would be a return of $3 on every $1 the state would invest.

Bucks control naming rights, and get those funds. Bucks are on the hook for cost overruns and maintenance / operating costs.

Wisconsin Center District maintains the 15 members, but the Milwaukee County's representation goes from 3 to 6 and the state goes from 6 to 3 while the city maintains 6.

http://www.bizjournals.com/milwaukee/news/2015/06/04/arena-deal-announced-walker-says-its-cheaper-to.html

[Markedman]

Great job by Walker, Abele, and Barrett at the PC. When you have 3 guys with different views on many things all make the case as to why this is a good deal for the the state,city, and county it makes a powerful argument.

I thought they were all very professional and made the case with facts and not spin.

[Cooby Snacks]

Their slogan, "Cheaper to keep them" might be the Milwaukeest thing I've ever heard.

[TheSultan]

Their slogan, "Cheaper to keep them" might be the Milwaukeest thing I've ever heard.


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