Thegovernor, mayor and others are wrapping up their press conference announcingthe new deal for the Milwaukee Bucks’ new arena.
Hereare the details just released by the governor’s office. Obviously, some major questionsremain about what, exactly, will be part of the redevelopment and how it’sgoing to happen. But here’s what we’ve got now:
Cheaper to Keep Them: State and Local Arena Plan
For every dollar the state invests, statetaxpayers will get a $3 return through income tax revenue
Madison – Today,Governor Scott Walker joined state and local leaders, including Speaker RobinVos, Majority Leader Fitzgerald, Milwaukee County Executive Chris Abele, andMilwaukee Mayor Tom Barrett in announcing a plan to protect state taxpayersfrom a loss of approximately $419 million, if the NBA relocates the MilwaukeeBucks. The total state contribution will be capped at $80 million.
“We’veconsidered the financial impacts on the state should the Bucks stay or go, andquite simply, we found it’s cheaper to keep them,” Governor Walker said. “Our plan is the result of a state and local, public and private alliance, andit is developed with the goal of ensuring a good return to our statetaxpayers. Under this plan, for every dollar the state invests, statetaxpayers will get a $3 return on that investment.”
In April2014, new owners bought the Milwaukee Bucks from Herb Kohl in a deal approvedby the NBA and contingent upon the construction of a new arena by 2017. If a new arena is not constructed by 2017, the NBA will buy the Bucks back fromthe current owners and move the team to another state.
If theteam is relocated, there will be a loss to state taxpayers of at least $419million over the next 20 years due to the loss of current revenue, futuregrowth, and the ongoing costs to maintain the Bradley Center.
Currentand former team ownership committed to fund $250 million toward funding the$500 million arena project. Under this plan, state and local governmentswill also fund $250 million, or half of the total project costs, towardbuilding the new arena without tax increases or state bonding. Any costoverruns would be paid by other sources, but not the state.
Workingtogether with local leaders, Governor Walker, Speaker Vos, and Majority LeaderFitzgerald developed a plan that will cap the total state investment in theproject at $80 million over 20 years. Over a 20-year period, this planprotects $299 million in income tax revenue, including the base and projectedgrowth.
Localgovernments will fund the remainder of the investment through infrastructureinvestment, direct funding, and financing through the Wisconsin CenterDistrict.
How itworks:
· Forevery dollar the state invests, state taxpayers will get a $3 return throughincome tax revenue.
· Stateand local governments will fund $250 million, or half of the total projectcosts, toward building the new arena without tax increases or state bonding.
o Thestate puts forward $4 million per year for 20 years, with the total stateinvestment capped at $80 million.
o Thecity will contribute $47 million through the creation of a TID and paying for aparking structure in upfront cash.
o Thecounty contributes $4 million per year over 20 years through a state debtcollection agreement.
o TheWisconsin Center District uses existing revenue streams to finance roughly $93million in bonding for the plan.
- Caps state contribution at $80 million toward the arena project.
- Caps the total public contribution to the arena project at $250 million.
· Clawback provisions included to protect both the state and local governments. If the Bucks leave they will have to pay back the public investment. Thepayback will be proportional to dollars contributed.
· Anycost overruns would be paid by other sources, but not the state.
· Maintenanceand operations will be paid for by the team, not by the state or localgovernments.
- The team and its partners will contribute 50 percent of the cost of the project with local funding coming in at 39 percent and the state contribution estimated at 11 percent of the total cost.
Benefitsof the plan:
· Protectsstate taxpayers from losses that would be at least $419 million over the next20 years, including:
o Baseincome tax revenue generated by the Milwaukee Bucks and from the visiting teamsof $6.5 million per year in state income taxes, or $130 million over 20 years;
o Incometax revenue growth estimated at $169 million over 20 years due to futurecontracts and estimated NBA pay increases;
o Taxpayerliability for the Bradley Center estimated at $120 million in costs over thenext ten years.
· Forevery dollar the state invests, state taxpayers will get a $3 return throughincome tax revenue.
· Supportsa new arena without tax increases or state bonding.
· Createsor preserves roughly 15,000 permanent and temporary construction jobs.
· Protectsstate taxpayers by requiring the Bucks to reimburse the public investmentshould they leave the state.
· Thestate will benefit from a $1 billion economic development project, which isestimated to create or preserve 15,000 permanent and temporary constructionjobs.
UPDATE: Here's a statement from Milwaukee Common Council President Michael Murphy, who's just scheduled a public hearing on the plan for Friday afternoon.
For the most part, the terms of the legislative deal with the MilwaukeeBucks have been negotiated in private. With the announcement that the Governor,the legislative leadership, the Mayor and the County Executive have reached adeal, I have scheduled a special Steering and Rules Committee meeting to allowCommon Council members and the public at large to hear details of the proposalfrom the administration.
This informational meeting will take place tomorrow, Friday, June 5,at 1:30 p.m. in Room 301B of City Hall. It will be carried live on theCity Channel and at milwaukee.gov/citychannel.
However, despite today’s announcement, it is still unclear whether theGovernor has the votes in the legislature to get the plan approved. If thelegislature approves the deal, it will still require approvals from the city,the county and the Wisconsin Center District.
It is my intention that a full and transparent discussion of the detailswill be aired by the Common Council prior to any vote being taken.
